If you are in the process of buying a property for your family, then it is very important that you have at the very least, a basic understanding of some key real estate concepts. This will give you the peace of mind because you would know what you are getting into. In most instances, this knowledge could save you in the future.
Before you start looking for a home, it would be helpful to familiarize yourself with these terms:
Fixed and Adjustable Rates
When dealing with your mortgage, you would encounter the words “fixed” and “adjustable”. To say it simply, a fixed rate’s interest will not change throughout the span of the loan. As the name suggests, an adjustable rate mortgage’s rate can change.
You would definitely hear this lots of times. Listings simply refer to the homes that are currently up for sale. Although you can find listings online, your agent will have access to updated and accurate ones. You might miss some good ones if you’d just rely on online listings. Either that, or you’d waste a lot of time going through properties that you need not see.
After making an offer, a home inspection is in order. This will include a thorough check by a trained home inspector of the plumbing, heating, roofing, walls, windows, electrical, attic, and just about everywhere else in the home.
When applying for a mortgage, your financial institution may require an appraisal to be done on the property you wish to purchase. This is not a report on the market value of the property, which is what a buyer is willing to pay, but rather is based on many factors and solid comparables from your neighbourhood. This appraisal will be done by a professional, who will provide a report to your bank to ensure that the home you want is worth what you have paid.
These are only 4 of the terminologies that you need to understand before you join the house-hunting team. If you need more clarifications about any of these, or any other real estate jargon, your agent should be able to discuss them with you clearly.