If you're seriously considering buying a home, you'll probably be looking into communities,
schools for the kids, places to live, financing options, insurance, and a number of other things.
Nevertheless, if you're trying to get a mortgage, you might not be familiar with the procedure.
In reality, there are a lot of things you will be learning for the first time if you have never
participated in a home sale.

Here is a helpful basic glossary of some of the major words that each party to a real estate
transaction should be familiar with.

1-Appraisal: The written analysis of the estimated value of a property, as prepared by a
qualified appraiser, which often determines if you will qualify for the loan.

2-Closing: One of the last steps of any sale. This is the meeting where the lender, buyer and
seller complete the sale and mortgage process. Once the home closes, the home officially
belongs to the new buyer.

3-Closing costs: This term refers to the money paid at closing to the lender and consists of a
loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed
recording fee, credit report charge and other costs assessed at settlement. Closing costs
usually average between 2 – 6 percent of the total mortgage amount.

4-Credit report: Simply a report of your credit history that a lender will use to determine if you
are a good risk for a loan.

5-Interest-only mortgage: A loan whereby you only pay the interest portion of the mortgage
payment each month.

6-Interest rate: The annual interest on a loan. The lower your interest rate, the lower your
monthly payment will be.

7-Lock-in: The lender’s guarantee that you will be granted a certain interest rate for a specific
time period, such as 30 days before closing.

8-Origination fee: The fee charged by a lender for processing a loan.

9-Points: The amount that can be paid to a lender to lower the interest rate on your loan at
closing. Each point is equal to 1 percent of the loan amount.

10-Private mortgage insurance (PMI): For those buyers who put less than 20 percent down on
a home, lenders will require you to take out PMI, which is then added to your monthly
mortgage payment. This protects the lender in the event that you default on the loan.

11-Title: The home document that proves ownership of the property.

Like this update? As your local real estate professional, I can provide more great tips like this and
answer any real estate information questions you may have. Contact me today!

JUAN MESTRE
REALTOR ASSOCIATE

RAISING THE BAR FOR REAL ESTATE SERVICES

CONSIDER: Since I'm not a lawyer but your neighbor Realtor Associate, you should consult an
attorney and your CPA before making any decisions.
If you wish to find your Home or to start your journey towards Home Ownership,
Let’s start working together reach me at 305-776-5677 or register at www.juanmestre.com or email
mestre.j@ewm.com.
Sourced and digested from several locations including but not limited to:
RisMedia for BHHS.com/blog, EWM Realty & my knowledge