Back to Basics
By Alejandra Zamora
As with anything in life, you’ve got to get to know the basics before you can get down to the nitty gritty. When it comes to being involved in real estate, such as when becoming a new homeowner or first-time investor, knowing the basics essentially means learning the lingo- and there’s a lot of terminology in this industry. Whether you’re new to the real estate game or an old pro, it’s always necessary to brush up or learn new terms. In this week’s blog, we’ve outlined what we have found to be the most frequently used terms in the real estate world, so tackling this industry can be a piece of cake for you.
Appraisal: When buying a home or applying for a mortgage, a licensed practitioner will schedule an appraisal to estimate the value of your home, usually comparing it with prior knowledge or to the surrounding area’s data.
Buyer’s Agent: Works with the buyer in the home searching process, and helps negotiate and evaluate the pricing of that purchase. Essentially, the buyer’s agent represents you and your home (not to be confused with a listing agent, who represents the home’s seller).
Collateral: When a loan is being negotiated, the borrower will appoint his or her property as collateral, meaning he or she will risk losing that property if the loan is not repaid.
Contingency: Certain qualifications or standards you as the buyer can ask for, such as making sure the home sellers have completed a thorough home inspection, before becoming involved with a legally binding contract.
Cap: As interest rates may fluctuate, a cap is the limit to how much those rates can increase.
Closing Costs: The added fees that come with officially purchasing a home, such as insurance, taxes, and loan-processing costs.
Fixed-rate mortgage: An established mortgage that the buyer has set up to which the interest rate will not change or fluctuate over the amount of time a loan is in place.
Line of Credit: An arrangement between an individual and a bank establishing the type of loan balance the individual can have to access or maintain.
Margin: A percentage added to an index value to determine the interest rate on an adjustable mortgage rate.
Trustee: An individual or entity given the permission to hold the property of another. This is a fiduciary role.
Don’t understand or feel like studying these terms? Don’t worry- you don’t have to! Leave it to us here at Collins & Company, where our variety of services will take on all your realty-related tasks. Contact us today for a free consultation!