Most Common Homebuyer Terms

The homebuying process can be confusing regardless if you are a first-time homebuyer or have bought multiple homes before. So, to help provide some insight, your local Clay County real estate agents with Marla Newman Group have listed some of the most common home buyer terms to help alleviate some confusion.

Adjustable Rate Mortgage: This is a type of loan that has an interest rate that fluctuates with the market, meaning, your rate could increase or decrease throughout your home’s amortization period. An ARM is a popular choice for first-time homebuyers due to the lower initial interest rate, however, an ARM makes it more difficult to accurately budget your finances.

Annual Percentage Rate (APR): A yearly interest rate that includes all the additional fees and upfront costs, which is calculated by taking the average of the compound interest of the loan throughout the entire amortization period.

Appraisal: The value of the property you are looking to purchase.

Appreciation: The increase in the value of your property over time.

Closing Costs: Additional fees charged by your lender that is due before you can close on your home. These costs include, but are not limited to, title insurance, lawyer fees, mortgage origination fee, appraisal fees, realtor fees, discount points, and your down payment.

Escrow: When your funds are being held by a third party before you close on your home.

Fixed-Rate Mortgage: A type of loan that has a fixed interest rate, meaning your rates will not change throughout the term of your loan. This mortgage typically has a higher interest rate than an ARM, however, your rates will never fluctuate, which allows you to budget your finances accurately.

Multiple Listing Service (MLS): A professional real estate site that shares detailed and current real estate listings in the area.

Private Mortgage Insurance (PMI): A fee charged by your Clay County mortgage lender if you pay less than 20% of your down payment. This amount can be charged as a one-time upfront cost or it can be added on to your monthly mortgage payments. PMI is paid for by the borrower, however, it only protects the lender in case the borrower were to default on their payments.

Real Estate Agent: A real estate professional who can help you find your dream home and will negotiate on your behalf to give you find the best deals out there.

Title: The ownership of a piece of property.

Contact Us

If you would like to learn more common homebuyer terms or if you are ready to find your dream home, then please contact your local Clay County realtor with Marla Newman Group at 904.874.8299 or email us at Marla@MarlaNewmanGroup.com.