Common Homebuying Terms Every Buyer Should Know
Buying a home is one of the most exciting — and potentially overwhelming — milestones in life. With so many moving parts, it’s easy to feel like you’re learning a brand-new language. That’s why understanding the most commonly used real estate terms is key to making informed decisions and feeling confident throughout your homebuying journey. Here are some essential homebuying terms every buyer should know:
Pre-Approval: A more in-depth process that verifies your income, credit, and financials to give you a firm loan amount and interest rate.
Pre-Qualification: A quick estimate of how much you might be able to borrow based on unverified financial information.
Why it matters: Pre-approval gives you a stronger standing when making an offer, especially in a competitive market.
Adjustable-Rate Mortgage (ARM): Interest rate can change periodically, often after an initial fixed period.
Fixed-Rate Mortgage: Interest rate remains the same for the life of the loan.
Why it matters: Your choice impacts your long-term payment stability and affordability.
This is a deposit made to show a seller you're serious about buying the home. It’s credited toward your closing costs if the sale goes through.
Why it matters: It gives sellers confidence in your commitment and can make your offer more attractive.
When a seller doesn’t accept your original offer, they may issue a counter offer with new terms (like price or contingencies).
Why it matters: It opens the door for negotiation, so be prepared to respond strategically.
These are specific conditions written into a contract that must be met for the deal to go through (e.g., financing, inspections, appraisal).
Why it matters: Contingencies protect you, the buyer, from unexpected surprises that could affect your purchase.
These are the total fees associated with finalizing a home purchase, including lender fees, title insurance, and taxes.
Why it matters: They typically range from 2–5% of the home's purchase price, so budgeting for them is essential.
Buying a home is a major financial and emotional investment. By familiarizing yourself with key terms like these, you’ll not only feel more empowered but also better equipped to navigate each step of the process. Have questions or need help getting started? I’d love to walk you through it — no pressure, just real advice from someone who cares.
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