Glossary
- Mortgage: A loan you obtain from a bank or lender to purchase a home.
- Interest rate: The percentage of additional money you pay the bank to lend you money
for your house. - Down Payment: The money you pay up front to buy the home. Generally, it is expressed
as a percentage of the purchase price. - Loan term: The time during which you must repay the loan. It can be 15, 20
or 30 years. - Fixed interest rate: An interest rate that does not change during the entire term of the
loan. - Variable interest rate: An interest rate that can change during the term of the
loan. - Closing costs: The charges you pay when buying a home, such as attorney fees, taxes, and lender fees.
- Mortgage insurance (PMI): Insurance you pay if you make a down payment of less than 20% of the purchase price of the home.
- Pre-approval: A process in which the lender reviews your financial situation and tells you how much money you can borrow to buy a home.
- Deed: A legal document that shows you own the house.
- Contingency: A condition in the purchase contract that must be met for the sale of the home to be completed, such as a satisfactory inspection.
- Title deed: A legal document that shows that you have the right to own the house.
- Closing: The final step in the home buying process, where you sign the paperwork and pay closing costs to complete the purchase.
