Looking at buying a new home? Feeling somewhat overwhelmed in the process? Well you are not alone. There are so many factors attached to buying a home that it can become a cause of stress. As your premier Vernon real estate agent, here is a follow up to last month’s blog of key terms that you are going to encounter during the home buying process. Understanding these terms will reduce any feelings of stress and allow you to gain a better understanding of each stage.
Key Real Estate Terms
Home Inspection – A visual look that inspects the various systems of a property (electrical, piping, roof etc.). This usually happens during the period that a home is in escrow.
Homeowners’ Insurance – A policy that protects the homeowner’s belongings, the structure of the property and covers injury to 3rd parties should damage, or injuries occur on the property.
Interest Rate – The cost attached to borrowing money (a mortgage). The interest rate of a mortgage is set by the lender and can either be fixed for a specified time period or it can float, meaning that the rate may vary depending upon the interest rate set by the Bank of Canada.
Listing Price – The price of the property that is set by the seller.
Mortgage – A type of loan obtained by the buyer that is used to secure a property. This type of loan is typically paid off over several years through monthly or biweekly payments.
Mortgage Broker – A lender who works on behalf of the buyer to secure a loan (mortgage) through a bank or another lending institution.
Multiple Listing Service (MLS) – A database used by real estate agents to list properties that are for sale.
Pre-Approval – The amount of money that the lender has decided you will be approved for (Your mortgage amount). This number is based upon the borrower’s income, credit score and assets. A pre-approval is recommended before a real estate agent will show you a home.
Principal – The outstanding balance of your mortgage. As monthly mortgage payments are made, the outstanding principal is reduced.
Property Taxes – A tax based upon the value of your property that is paid by the homeowner. This tax funds municipal services such as garbage collection, sewer, water, parks etc.
Sellers’ Market – A real estate market condition that exists when the number of prospective buyers outnumber the amount of homes on the market. In this type of market, bidding wars are common.
Walkthrough – The home buyer’s final inspection of the property before closing.
These important real estate terms are going to make the home buying process much easier. By understanding the language associated with buying a home, you should be more of an active agent in the process. If any of these terms are not clear or you would like a more thorough explanation, please call or stop by today.
I would love to show you some of the new and exciting real estate properties that are available in the Vernon area and help you find your perfect home today. I look forward to working with you soon.