This is What You Need to Know When Buying a Home
There is descriptive terminology that you may not be aware of as a first time home buyer. These are uncommon terms, but still just as important as any other. If you need to, you can write them down or make notes so that you can remember them during your home buying process.
- Additional principal payment - Money that is paid as an extra payment on your monthly mortgage. When this is allowed, it increases your overall monthly payment, but decreases your remaining balance on a loan faster.
- Assumption - This is when a buyer decides to forego applying for a new home loan and instead will purchase a home loan from the current seller. The buyer would assume the payments and fees that are carried with it.
- Appreciation - When the value of a specific piece of property grows in value.
- Density - This refers to a specific area of land and the number of homes that have been built upon it. Local jurisdictions will be in charge of the allowable number.
- Index - Refers to an adjustable rate loan. These are the detailed guidelines for the loan that explain the amount of interest and any adjustments that are involved with that particular loan.
- Note - This is simply a form that shows that there is a home loan that is currently in place. Also, this will list any and all terms that are associated with the loan.
As you can see, there are many home buying terms that you may not know. The good news is that your real estate agent and lender are quite familiar with these terms. They will guide you through the process and inform you of the meanings of these words as well as other important words in the industry. Rest assured that most people aren't using these words on a daily basis, as they are directly related to real estate and lending. However, by the time you buy your new home, you'll feel like a pro with a great new vocabulary.