We know that when you are buying your first home or just haven’t bought in awhile, there is a TON of information that gets thrown at you. Especially when it comes to mortgages, terms and more. We want to help you understand some of the mortgage lingo that can come up during the home buying/selling process!
- Annual Percentage Rate (APR): This number reflects the total annual cost of taking out your mortgage loan. It’s different from your mortgage interest rate and includes a few extra fees.
- Underwriting: This is all the “behind the scenes” part! When a loan professional evaluates your application and verifies all your financial details, that’s underwriting. It’s important to ensure that you are in a good financial position to manage your new monthly payment.
- Escrow: An escrow account is used to hold funds prior to closing, including your earnest money deposit and option money. You might also pay into an escrow account to cover property taxes, homeowners insurance and private mortgage insurance (if applicable).
- Closing Disclosure: This is a document that you’ll be given at least three days before your closing date. It should explain in detail all of the final costs of your loan, as well as what you’ll be expected to pay on closing day. Make sure to look over it carefully!
- Mortgage Note: You’ll sign this document at closing. It outlines the terms of your home loan and includes how much you’re borrowing, whether it’s a fixed-rate or adjustable-rate mortgage and should accurately reflect all the terms you agreed upon with your mortgage broker.
- Prepaid Costs: These are prepaid costs and fees paid by you up front at closing! They usually cover mortgage interest, property taxes and homeowners insurance expenses that occur between your closing date and the date your first mortgage payment is due.
Are you looking to buy or sell soon and what more advice and help as you go through the process? Call the #1 Team in Brazoria County: The Christy Buck Team! 832-264-8934!