Key Terms to Know When Buying a Home

Thinking of buying a home?  Here are some terms to help you feel comfortable with the home buying process:

Appraisal: A report highlighting the estimated value of the property completed by a qualified third party. Lenders rely on appraisals to validate a home’s value and ensure they’re not lending more than the home is worth.

Closing Costs:  The fee required to complete the real estate transaction.  Paid at closing.  Ask your lender for a complete list of closing cost items, including points, taxes, title insurance and more.

Credit Score: A number ranging from 300-850 that’s based on an analysis of your credit history.  This helps lenders determine the likelihood you’ll repay future debts.

Down Payment:  Down Payments are typically 3.5 – 20% of the purchase price of the home.  Some 0% down programs are also available.  Ask your lender for more information about what you may qualify for.

Pre-Approval Letter:  A letter from a lender that shows what they’re willing to loan you for your home loan.  This, plus an understanding of your savings, can help you decide on your target price range.

Due Diligence:  A negotiated timeline in which any and all inspections and repair negotiations are to be completed.  All South Carolina residential real estate contracts use Due Diligence to negotiate repairs.

Affordability:  A measure of whether someone earns enough to qualify for a loan on a typical home based on the most recent price, income and mortgage rate data.  When home prices and mortgage rates are higher, it can impact affordability.

Equity: The value of your home against the total amount of liens against your home.  Many homeowners are realizing they have more equity than they thought and they’re using it to move.

What would you like to know about the home buying process?  Reach out with your questions!  We’d love to help!


Lauren | Lauren Zurilla & Associates