Home Seekers – Terminology You Need To Know

There will be times during the home buying process that you will need to know all kinds of terminology. Here are some of the uncommon terms that you may need to be familiar with.

Amortization
This is where the borrower of a home loan will reduce the debt they owe by participating in a plan that is lower on monthly interest and principal payments.

Balloon
This is a type of loan that has payments that are a little bit higher than the average conventional loans. At the end of this loan period, the borrower would pay one large sum to finish off the loan debt. A loan of this type will often come with a pay period that is about 5 years or it can be less in some instances. Certificate of Occupancy. This is an official document from an agency that simply states that the requirements for regulations, local codes, and ordinances have been met completely.

Closing Costs
These are the costs that come at the end of the home buying process. Types of costs can include property taxes, agent fees, several different types of insurance, and any types of costs that are left over from the different providers who you gain services through.

Convertibility
This refers to a particular type of change in loans. Usually, this will involve changing an adjustable-rate loan over to a fixed-rate loan. Due-on-sale - This is particularly important during the closing process of a home. It is a document which simply states what the borrower will have to pay at the moment of sale on a home.

As you can see, there are some unusual words that you will learn as you go through the home buying process. These terms are used daily by real estate agents, realtors, lenders, and brokers, so when you hear or read a word you don't know, don't hesitate to ask.