Home Buying Terminology
Here are some home-buying terms that are good to get familiar with in alphabetical order.
Closing Attorney- The attorney will perform a title examination, prepare all documents, provide communication between buyer and seller, and record documents and disburse money.
Deed & Lien Waiver- A deed is a legal document showing ownership of the property. A lien waiver is a document stating all past liens have been released and hold no claim on the property.
Due Diligence Fee- a fee that is paid by the buyer to the seller. The seller keeps this fee regardless if the deal closes. If the deal does close, the buyer will have that amount credited back to them at closing.
Due Diligence Time- An analysis period that allows the buyer to inspect the property and to determine the feasibility of buying the property. During this time a buyer can terminate the contract if unsatisfactory results are found.
Earnest Money- Money paid by the buyer to show that their offer is serious and made in good faith.
Escrow- An escrow account is set up for funds such as earnest money. This account keeps money separate and specified.
FHA Loan– A mortgage that is provided by the Federal Housing Administration to enable qualifying Americans to borrow money to purchase a home. Typically, this loan is used for buyers with little or no money for a down payment.
Fixed mortgage– A mortgage where the interest rate remains the same for the entire life of the loan.
HOA & Their Dues- Some neighborhoods offer a Home Owner’s Association which regulates neighborhood rules and also may provide amenities such as a swimming pool, tennis courts, etc. Fees are often collected for the upkeep of common areas and amenities.
Home Inspection- An examination of the condition of a home, performed by a licensed home inspector.
Homeowner’s Insurance- This covers not only damage to your property, but any liability for damage or injuries occurred while on your property.
Interest– A percentage of money deducted from your monthly mortgage payments for the use of the money borrowed from the financial institution.
Lender– Check out some lenders that have offered great customer service and loan programs. Select the one that best meets your needs!
Mortgage- A loan by a bank or mortgage lender to help you finance your home.
Offer to Purchase Agreement– a contract between you and the seller that provides the terms of the sale of the property.
Pre-Qualification– The process that the lender uses to determine what sales price you can afford to pay when buying a home.
Principal– The money used to pay off the loan balance.
PITI– Principal Interest Taxes and Insurance, together they comprise your monthly mortgage commitment.
Recording the Closing & Settlement- This is noted as the closing date on your executed purchase agreement and is when the attorney reviews all loan and property-related documents with you before you sign them. Once completed the attorney will record your purchase at the County Register of Deed’s office. When that is complete you legally own your new home!
Sale Price- The purchase price agreed upon by the buyer and seller.
Title Insurance- This insures against financial loss from defects in the title to the property. This protects both the buyer and the lender.
Contact Masha today to start your home buying journey in Durham, Chapel Hill, and surrounding areas!