The traditional secondary education system taught us many valuable skills like math, English, social studies etc.
but it lack the ability to teach us how to buy a house.
There are many parts in the whole involved in the process to buy a house.
If you don't have very deep pockets one of the things that you will have to do to be able to raise the money to purchase your dream house is to contact your favorite bank and get a Loan.
One of the most important lessons that everyone should learn is to never sign any document without knowing the terminology and what each term means.
This can be very damaging to your finances so make sure that you know the terms below and know how they apply to you.
1.
Interest rate: The interest rate is the amount that you pay to the bank for the use of the money that they lend you.
The interest rate is normally a percent of the principal amount.
In real estate the interest is usually paid on your monthly payment and it will make a difference in your payments.
2.
Fixed Rate Mortgage: Fixed rate mortgages are mortgage loans where the interest rate stays the same during the entire period of the loan and the payment amount and the duration of the loans are fixed.
3.
Variable Rate Mortgage: A variable rate mortgage is a mortgage that does not have a fixed interest rate.
Instead the interest rate fluctuates over time based on the economy and different benchmarks like the demand and supply of money and other benchmarks.
The interest rates change periodically.
4.
Principal: A principal is the amount still owed on a loan, separate from interest.
5.
Escrow: An escrow account is a trusted third party service that acts as the middle man between two parties involved in a transaction.
In real estate the escrow service will hold the funds given by a buyer for the seller of a particular piece of real estate until it receives the appropriate written or oral instructions based upon the fulfillment of the agreed conditions by the transacting parties.
6.
Title: A title is the formal document that serves as evidence of ownership.
7.
Deed: A deed is a legal document in writing that grants the bearer a right or privilege especially relating to property and is signed, attested, delivered, and in some jurisdictions sealed.
8.
Home Equity: Home equity is the current market value of a homeowner's interest in their real property minus any outstanding balance.
Home equity is essentially the actual amount of the property that you own.
This amount has been built up by making the mortgage payments over time and appreciation.
9.
Appraisal: An appraisal is the estimated value of what real property is worth.
The value usually searched for is the property's Market Value.
As you already know, it is very important to know these basic terms if you are looking to get a loan.
These basic definitions will help you to expand your knowledge and it will help you make an educated decision when trying to find the exact loan that will suit your own personal needs.
but it lack the ability to teach us how to buy a house.
There are many parts in the whole involved in the process to buy a house.
If you don't have very deep pockets one of the things that you will have to do to be able to raise the money to purchase your dream house is to contact your favorite bank and get a Loan.
One of the most important lessons that everyone should learn is to never sign any document without knowing the terminology and what each term means.
This can be very damaging to your finances so make sure that you know the terms below and know how they apply to you.
1.
Interest rate: The interest rate is the amount that you pay to the bank for the use of the money that they lend you.
The interest rate is normally a percent of the principal amount.
In real estate the interest is usually paid on your monthly payment and it will make a difference in your payments.
2.
Fixed Rate Mortgage: Fixed rate mortgages are mortgage loans where the interest rate stays the same during the entire period of the loan and the payment amount and the duration of the loans are fixed.
3.
Variable Rate Mortgage: A variable rate mortgage is a mortgage that does not have a fixed interest rate.
Instead the interest rate fluctuates over time based on the economy and different benchmarks like the demand and supply of money and other benchmarks.
The interest rates change periodically.
4.
Principal: A principal is the amount still owed on a loan, separate from interest.
5.
Escrow: An escrow account is a trusted third party service that acts as the middle man between two parties involved in a transaction.
In real estate the escrow service will hold the funds given by a buyer for the seller of a particular piece of real estate until it receives the appropriate written or oral instructions based upon the fulfillment of the agreed conditions by the transacting parties.
6.
Title: A title is the formal document that serves as evidence of ownership.
7.
Deed: A deed is a legal document in writing that grants the bearer a right or privilege especially relating to property and is signed, attested, delivered, and in some jurisdictions sealed.
8.
Home Equity: Home equity is the current market value of a homeowner's interest in their real property minus any outstanding balance.
Home equity is essentially the actual amount of the property that you own.
This amount has been built up by making the mortgage payments over time and appreciation.
9.
Appraisal: An appraisal is the estimated value of what real property is worth.
The value usually searched for is the property's Market Value.
As you already know, it is very important to know these basic terms if you are looking to get a loan.
These basic definitions will help you to expand your knowledge and it will help you make an educated decision when trying to find the exact loan that will suit your own personal needs.
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