Words Wednesday | Part 4

Words Wednesday

Part 3

It is very important to understand the terminology used during a real estate transaction whether you are buying or selling.  I will post a blog each Wednesday (Words Wednesday) with a few real estate terms.  If you have any questions or are ready to buy or sell, please do not hesitate to call or email me. Cheryl Clossick (734)709-1683 or cheryl@cherylclossick.com.

Fixed Rate Mortgage:

Interest rate is fixed for the life of the loan.  30 years is most common but you can also do 20, 15 or 10 year mortgages.

Adjustable Rate Mortgage:

Interest rate is fixed for a predetermined amount of time.  Once that time is up, the interest rate adjusts to the current Prime rate plus a predetermined amount (usually 1%).  3, 5, 7 or 10 years are most common.  The loan term is still 30 years.

Pre-approval Letter:

Estimate from a mortgage lender that tells how much a buyer can afford.  This is based on a credit report they will pull and only the information told to them regarding income.  This pre-approval letter is necessary when writing an offer on a home.

Closing Costs:

Fees add up fast when buying or selling a home.  Typically, closing costs will be 2-5% of the purchase price plus the down payment amount.

Title Insurance:

Title insurers search the public records to make sure the home seller actually had rights to the title and that there are no undisclosed liens on the property (unpaid taxes or unpaid contractors, etc).

Stay Tuned.  Next Wednesday we will go over Commission, Realtor®, Real Estate Agent, Code of Ethics, ABR® (Accredited Buyers Representative) .

Please feel free to contact me about any of these terms or about your personal real estate needs.

Cheryl Clossick, REALTOR

Associate Broker, GRI, ABR, SRES, ePro, CRS, RCC, RSC, SFR

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