Buying a home can sometimes feel like learning a new language. Before you ever meet with your builder or lender, arm yourself with knowledge of the terms and definitions so you can begin the homebuying process with confidence.
Here are a few key terms that you need to know to get yourself through the homebuying process:
- Closing Costs – Expenses incurred by buyers and sellers in transferring ownership of property, such as an origination fee, taxes, title insurance, transfer fees, points, title charges, credit report fee, document preparation fee, mortgage insurance premium, inspections, appraisals, prepayments for property taxes, deed recording fee and homeowners insurance.
- Escrow – Funds that are set aside and held in trust by the lender/servicer. Usually used for payment of taxes, insurance, etc.
- Home Inspection – A complete and thorough inspection of the physical condition of a property, including all major systems and structural elements, conducted by someone who knows what to look for and who will disclose the findings to you.
- Pre-Settlement Walk-Through – Final inspection of house prior to closing, conducted by builder and buyer.
- Walk-Through Inspection – A final walk-through immediately prior to closing to verify that no changes have taken place and no new damage has occurred.
Now that you’ve got a headstart, you’re ready to dive into the full glossary of terms that will help guide you through every step of homeownership.