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.
Escrow, of course, is a word with which you soon will be familiar. People will often state that a property is "in escrow," making it seem like this a specific period of time. Actually, escrow is a special account that is set up by a third party to handle the transfer of money between the buyer and seller. For about 30 days (or perhaps longer) this account will be opened and once your loan is funded, the account will be closed and you will be the new owner.
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.
Closing costs are yet another interesting term you will hear. These are the expenses relating to the closing of an escrow account. There are quite a few items that must be paid for during the escrow process and this includes appraisals, title insurance, recording fees, notary fees and commissions to the realtors. Typically, the sellers pay the real estate commission, which is the biggest chunk of closing costs, but buyers are responsible for paying for many of these expenses.
You might be wondering about the difference between appraisals and inspections. In order to get a loan, the bank or lender will make you pay to have the home appraised. The selling price of the home cannot be more than the value set forth in the appraisal. A bank won't lend money if you are paying more than you should for a home. Inspections are not always required, but definitely crucial, and you will want to pay for a quality home inspection and possibly other inspections such as termite inspections, geological inspections, roof inspections and anything that you might need based upon the age, location and general condition of the property.
These are just a few of the words that you will hear during your home-buying experience. If you are purchasing real estate in Texas Hill Country, the staff at Nixon Real Estate can explain just about any typical real estate term and help throughout the escrow process. You can find great homes for sale in Fredericksburg, Kerrville, San Antonio and other nearby towns, so call Nixon Real Estate and get started.
Escrow, of course, is a word with which you soon will be familiar. People will often state that a property is "in escrow," making it seem like this a specific period of time. Actually, escrow is a special account that is set up by a third party to handle the transfer of money between the buyer and seller. For about 30 days (or perhaps longer) this account will be opened and once your loan is funded, the account will be closed and you will be the new owner.
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.
Closing costs are yet another interesting term you will hear. These are the expenses relating to the closing of an escrow account. There are quite a few items that must be paid for during the escrow process and this includes appraisals, title insurance, recording fees, notary fees and commissions to the realtors. Typically, the sellers pay the real estate commission, which is the biggest chunk of closing costs, but buyers are responsible for paying for many of these expenses.
You might be wondering about the difference between appraisals and inspections. In order to get a loan, the bank or lender will make you pay to have the home appraised. The selling price of the home cannot be more than the value set forth in the appraisal. A bank won't lend money if you are paying more than you should for a home. Inspections are not always required, but definitely crucial, and you will want to pay for a quality home inspection and possibly other inspections such as termite inspections, geological inspections, roof inspections and anything that you might need based upon the age, location and general condition of the property.
These are just a few of the words that you will hear during your home-buying experience. If you are purchasing real estate in Texas Hill Country, the staff at Nixon Real Estate can explain just about any typical real estate term and help throughout the escrow process. You can find great homes for sale in Fredericksburg, Kerrville, San Antonio and other nearby towns, so call Nixon Real Estate and get started.
About the Author:
Pammy McGrath loves reading real estate blogs. If you are looking for licensed Texas Hill Country real estate agents, or to find homes for sale in Fredericksburg TX, please check out the Nixon Real Estate site now.
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