Wednesday, July 1, 2015

Idiot's Guide To Understanding Real Estate Terms

Closing costs, appraisals, contingencies, earnest money... The real estate world definitely has its own language! If you're new to real estate at the Lake of the Ozarks or if you've been out of the market for a few years, you might feel a little overwhelmed by all of the terminology being tossed around - and understandably so. But never fear! The team at The Property Shop At The Lake is here to help you make sense of all of these confusing terms with this glossary of a few common real estate terms.

The official valuation of a property that determines the home's current market value. The appraisal takes into account several different factors, including the home's condition, finished and unfinished square footage, and the actual sale prices of comparable properties.

Closing Costs
The one-time costs associated with the purchase of your new home at the Lake of the Ozarks, such as title search costs, underwriting fees, and title insurance. Your mortgage lender will attempt to provide a realistic estimate of these costs in your good faith estimate.

A requirement or condition that must be satisfied before the contract can be considered legally binding. For example, many buyers make their offers contingent on financing, meaning they must be approved for a home loan before they will follow through on their offer to purchase the home.

Conventional Loans
Mortgage loans that are not backed by any government organization.

Debt-To-Income Ratio
The ratio that compares your outstanding debts to your current income. This information will be used to determine the loan amount you can qualify for. The debts and incomes will be evaluated for every person whose name is on the loan application.

Earnest Money
The money that the buyers include with their offer to show that they are serious about the purchase of the home. Generally, the earnest money amount ranges from 1-3% of the home's purchase price.

Good Faith Estimate
The document that outlines the estimated cost of your mortgage loan. This estimate should include the closing costs, interest rates, and total amount of money that will be required to pay back your mortgage loan.

A thorough evaluation of the condition in everything in and around the property. The inspection is intended to warn buyers and lenders of potential hazards with the property before the sale of the home is complete.

Market Value
The amount that a home will actually sell for in the current local real estate market.

Multiple Listing Service - the service that encompasses all local real estate listings.

The process by which a buyer is preapproved for a mortgage loan. The lender must evaluate all the documents the buyer submits (tax returns, bank statements, pay stubs, etc) to provide a valid estimate of the loan the buyer can be approved for.

A rough estimate of what type and how big of a loan a buyer will qualify for, based on the information the buyer gives the lender.

Unconventional Loan
Mortgage loans that are backed by some sort of government association, such as USDA loans or VA loans.

A mortgage loan backed by the U.S. Department of Agriculture. These loans are reserved for below-average income families in designated rural counties. (Camden, Miller, and Morgan counties should qualify!)

VA Loan
A mortgage loan that is backed by the Veterans Administration. These loans are only available to military veterans, active duty personnel, and (in some cases) their surviving spouses. These types of loans have a unique benefit in that they are sometimes available for 100% financing.

Happy House Hunting!
If you're ready to buy a house at the Lake of the Ozarks or simply want to peruse some of the waterfront properties for sale, give us a call! Our team of real estate agents at the Lake of the Ozarks will be working all weekend to help you find the home of your dreams. We look forward to working with you!

The Property Shop at the Lake
2086 Horseshoe Bend Parkway
Lake Ozark, MO 65049
(573) 693-1100
(573) 480-7760

No comments:

Post a Comment