Despite how HGTV makes it look, house hunting isn’t as easy as sitting at a hip coffee shop with a trendy real estate agent with three almost perfect options. In fact, the process is a lot more involved. You must determine your budget, find out how you’re going to get funding, do your research, and double check all that work before you even tour a home. Then once you think you’ve found your dream home then the offer process begins. Needless to say, it can be confusing.
That’s why your friends at Greenville Federal Credit Union have put together a list of 10 terms you need to know before you go house hunting. While this list isn’t comprehensive, it’ll leave you feeling a little more prepared than you were to begin with.
1. Zoning – what your city will allow you to do with your property (additions, pools, fences, or any other projects). For instance, the zoning laws might be a little stricter in a historic downtown neighborhood than in the suburbs of Simpsonville or Mauldin.
2. Mortgage – a loan used to purchase a home or other real estate. To secure a mortgage, visit a trusted financial institution. For example, as Greenville’s Credit Union, Greenville Federal Credit Union knows the local market and can help you fund your dream home.
3. Adjustable-Rate Mortgage (ARM) – a mortgage with an interest rate that can fluctuate throughout the life of the loan. Think of it like a hot air balloon (shoutout to Freedom Weekend Aloft). As things heat up, your balloon inflates, and your rates rise. When they cool down, the balloon deflates, and your rates fall.
4. Fixed-Rate Mortgage – a mortgage with a fixed rate of interest. Like a plane, once you’ve departed from GSP, you’re at a cruising altitude until you land. Your rate stays constant.
5. Pre-Approval – a document from your lender outlining how much you can borrow based on several factors. When you talk to a mortgage lender, like the staff at Greenville Federal Credit Union, they will work with you to determine how much you can borrow to fund your new home. This will help you develop your budget.
6. Appraisal – the estimated value of the home or property you want to purchase. If you’ve seen Antiques Roadshow, you should be familiar with this concept. Instead of telling you the price of family heirlooms, they’ll tell you the value of real estate.
7. Down-Payment – your upfront payment towards the purchase of your new home. This payment gets you in the door, literally.
8. Home Inspection – a professional examination of a home to outline and detail its current condition. Imagine this as your house getting a physical. They’ll check the heartbeat, blood pressure, and bones of the house all so you know it’s safe to live there.
9. Escrow – a neutral account not related to the buyer or seller that will hold the funds until the end of the transaction. The Switzerland of bank accounts.
10. Closing Costs – fees that are associated with the purchase of your home for things such as the appraisal and inspection. A list of closing costs could be its own article. This is a nice way to bundle things like the underwriting fee, appraisal, processing fee, and your credit report.
This is just a selection of terms that you should know whether you’re hunting for a starter home or your forever home. Ready to start your journey? We’re ready to help. Please stop by any of our convenient branch locations or call 800.336.6309 to speak with a lending team member today.
Each individual’s financial situation is unique, and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed.