Understanding Mortgage Terminology
There are so many things to consider when researching your first home. It’s easy to feel overwhelmed when you don’t understand all the terms being thrown around. Don’t let mortgage terminology keep you in the dark. Here are the ABCs of a few keywords.
Mortgage Terminology: Appraisal, Broker, Closing
Appraisal – An appraisal is an assessment of the home’s value completed by a third party. This is an important part of the buying and selling process to ensure a fair home-buying transaction. This should be completed by a third party with no real skin in the game for a true and honest assessment. Most mortgage companies will require a buyer to receive an appraisal prior to closing to make sure the home buyer doesn’t owe the lender more than the home is worth. A seller will also want to do their own appraisal prior to listing the home to ensure they are listing the property at the right price point for the value.
Mortgage Broker – A mortgage broker is one of the many resources available to home buyers. They are educated beyond what is required for a typical realtor. They are well-versed in all the complexities of a mortgage loan and can help guide a buyer through the complicated process of buying a new home. A broker remains aware of all the latest market trends and current real-estate laws and can be a valuable asset to your home-buying team.
Closing – This is what people refer to as the day all the documents are signed and the transfer of ownership is complete. The closing date is negotiated during the terms of the initial purchase agreement. This date should be agreed upon by both buyer and seller and can be costly to change after you sign your purchase contract. When selecting a closing date, consider all the many things you need to do before you can close on the new home. This is the final step in the transfer of the sale of a home, and it’s important to come prepared.
Pro tip: Make sure your pen is full of ink because there are going to be several papers to sign.