While you are looking for homes for sale in Estes Park, you will hear a legion of real estate terms that can make your head spin. People in the industry are so accustomed to real estate vernacular that they tend to throw terms around without a second thought. Keep this alphabetized list handy when you are shown homes for sale in Estes Park, especially if you are a first-time buyer.
Adjustable-rate Mortgage
This type of mortgage, known as ARM, allows your lender to periodically adjust interest rates up or down. Some buyers who plan to sell in a few years strategize that they can get a low rate now and sell before the rate increases.
Annual Percentage Rate
Commonly referred to as APR, this rate is the actual finance charge for your loan. It includes points, loan fees, and the stated interest rate.
Closing
You may hear phrases like “closing the deal.” A closing is the meeting where the deed to the property is legally passed to the buyer from the seller. The seller and buyer usually attend the closing.
Closing Costs
With the closing comes closing costs, also known as settlement. All the financial transactions required to finalize the contract are completed during the closing. Average closing costs run about 2% of the purchase price but vary based on location.
Contingency
When you have a condition in your contract that must be met for the contract to be binding, it is known as a contingency. An example is if the purchase is contingent upon you selling your current home. In a competitive market, people try to avoid contingencies in contracts.
Escrow
The fund or account held by a third-party custodian is called an escrow account. Your down payment would sit in an escrow account. The money remains in escrow until the contract conditions are satisfied.
Fixed-rate Mortgage
With this type of mortgage, the interest rate remains the same throughout the life of the loan. This is common with a conventional 30-year loan. This does not preclude your ability to refinance if the interest rates drop.
Private Mortgage Insurance
Known as PMI, this is insurance to protect the lender, not the buyer. The PMI charge is added to your mortgage payment. If your deposit is less than 20% of the purchase price, the lender typically charges PMI to reduce the lender’s risk in the event you default on the loan. As you make timely mortgage payments and your home value increases, you can apply to the lender to discontinue PMI charges.
Title
The title is a document that reflects ownership of the property. A title search will be conducted to examine the document history of the property title. This is done to ensure no legal encumbrance exists that disallows the sale.
Armed with these common real estate terms, you are now ready to start searching for homes for sale in Estes Park.
