Terminology Every Homebuyer Should Know – Part 1

Affordability

Refers to the financial feasibility of a potential home buyer to purchase a home. It primarily takes into account the buyer’s income, down payment, and monthly debts.


Appraisal

An appraisal is an unbiased professional opinion of a home’s value. It is the estimation of a home’s current market value. This valuation is typically calculated by comparing the recent sales of homes in the area to the property that is being appraised.


Closing Costs

Real estate, closing costs are the expenses, over and above the property’s price, that buyers and sellers incur to complete a real estate transaction. These costs may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed recording fees, and credit report charges.


Credit Score

A three-digit number that rates your creditworthiness. It typically ranges from 300 to 850. The higher the score, the more likely you are to get approved for loans and for better rates. Credit scores are based on your credit history, which includes information like the number of accounts, total levels of debt, repayment history, and other factors. Lenders use credit scores to evaluate your creditworthiness, or the likelihood that you will repay loans in a timely manner.


Down Payment

A down payment in real estate is the money a buyer pays upfront to complete the real estate transaction. It is usually expressed as a percentage of the home’s purchase price and typically ranges from 3% to 20% for a primary residence.


Thinking about buying or selling a home? Are you wondering if now is the right time for you? Contact me, because it’s more important than ever to have someone on your side that can help you navigate the changing marketplace. 📱🤙📧

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