When you are ready to purchase your first home, you are probably excited about actually getting out there and seeing what's for sale in your preferred area. You also might be a bit confused by all the weird real estate terminology that you keep hearing. Realtors and other related professionals tend to use some of the following terms, and this is what they really mean.
You always hear people say they are "in escrow," but what does this actually mean? Escrow is actually an account and not technically a period of time. The buyer writes a check to an escrow company and this company holds the check until your loan is funded and the home belongs to you. From the time you write the check to the time your loan funds takes about 30 days or more, and during this time you have inspections, appraisal and tons of paperwork to sign.
Once you get a loan and close escrow and take possession, now your main focus will be paying off your mortgage and caring for your home. There are quite a few types of mortgages, and you will hear the words "fixed," "ARM" and "adjustable" thrown around. A fixed mortgage just means that the percentage of interest you pay will never change. An adjustable-rate mortgage or ARM usually is fixed for a few years, and then the level of interest can go up or down. This means your monthly payments can go up or down and sometimes substantially.
The words "closing costs" can strike terror in the minds of a first-time home buyer. There are many costs associated with the closing of an escrow account and the buyer does have to pay quite a few, such as appraisals and title insurance, as well as a host of other expenses. The good news is that the seller generally pays the largest part of closing costs, which is the commission that is paid to the real estate agents.
The appraisal is a closing cost that the seller pays, and this is something you have done in order to secure your loan. An appraiser comes and looks at the home and decides what the house is worth based upon the home's condition and local comps. If your appraiser says that the house is worth less than the purchase price, it is possible that the bank will not lend you the money. The inspections also generally are paid for by the buyer, and you absolutely want to hire a great inspector and have a very thorough inspection done on the property. Even if you are buying a home that has just been built, you need to have it inspected.
Of course there are plenty of other confusing terms you will hear, and that's why it's great to have an experienced real estate agent on your side. The realtors at Nixon Real Estate, for instance, not only can help you find a great piece of Fredericksburg real estate or Texas Hill Country real estate, they can also clear up many of the mysteries that accompany the process of buying your first home.
You always hear people say they are "in escrow," but what does this actually mean? Escrow is actually an account and not technically a period of time. The buyer writes a check to an escrow company and this company holds the check until your loan is funded and the home belongs to you. From the time you write the check to the time your loan funds takes about 30 days or more, and during this time you have inspections, appraisal and tons of paperwork to sign.
Once you get a loan and close escrow and take possession, now your main focus will be paying off your mortgage and caring for your home. There are quite a few types of mortgages, and you will hear the words "fixed," "ARM" and "adjustable" thrown around. A fixed mortgage just means that the percentage of interest you pay will never change. An adjustable-rate mortgage or ARM usually is fixed for a few years, and then the level of interest can go up or down. This means your monthly payments can go up or down and sometimes substantially.
The words "closing costs" can strike terror in the minds of a first-time home buyer. There are many costs associated with the closing of an escrow account and the buyer does have to pay quite a few, such as appraisals and title insurance, as well as a host of other expenses. The good news is that the seller generally pays the largest part of closing costs, which is the commission that is paid to the real estate agents.
The appraisal is a closing cost that the seller pays, and this is something you have done in order to secure your loan. An appraiser comes and looks at the home and decides what the house is worth based upon the home's condition and local comps. If your appraiser says that the house is worth less than the purchase price, it is possible that the bank will not lend you the money. The inspections also generally are paid for by the buyer, and you absolutely want to hire a great inspector and have a very thorough inspection done on the property. Even if you are buying a home that has just been built, you need to have it inspected.
Of course there are plenty of other confusing terms you will hear, and that's why it's great to have an experienced real estate agent on your side. The realtors at Nixon Real Estate, for instance, not only can help you find a great piece of Fredericksburg real estate or Texas Hill Country real estate, they can also clear up many of the mysteries that accompany the process of buying your first home.
About the Author:
Pammy McGrath loves reading real estate blogs. If you are searching for licensed Texas Hill Country real estate agents, or to discover homes for sale in Fredericksburg TX, please check out the Nixon Real Estate website today.
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