How do I know what my lender is talking about?
Does real estate vocabulary leave you wondering? Check out this cheat sheet for First Time Home Buyers terms to make it easier for you!
Pre-approval: An evaluation by a lender that determines whether the borrower qualifies for a loan and the maximum amount that is qualified for.
Adjustable Rate Mortgage (ARM): Interest rates are periodically updated to coincide with the current market interest rates.
Annual Percentage Rate (APR): The cost of a mortgage stated as a yearly rate, with all financial costs; including interest, mortgage insurance and loan organization fee.
Back End Ratio: The ratio of all fixed debt, including housing expenses to gross income.
Escrow: The mortgage company establishes an escrow account to pay property taxes and insurance during the term of the mortgage.
Private Mortgage Insurance (PMI): With a down payment of less than 20%, the lender requires PMI. This protects the lender from losing money if you end up in foreclosure.
Home Owner’s Insurance: Combined property and liability insurance designed for residential property owners.
Lien: A form of encumbrance that holds property as security for the payment of a debt.
At RE/MAX Capitol Properties helping people is our business and we look forward to helping you realize your homeownership dreams. Connect with us today to answer any questions you have, direct you to a lender or to get started on the steps to buying your first home! Call us at 307-635-0303 or visit us online at cheyennehomestore.com.
