First-Time Homebuyer Tips: Home Buying Terms to Learn

As a first-time home buyer, the entire home buying process can be confusing, frustrating and overwhelming. This is because, as a first-time home buyer, you are constantly being bombarded with real estate lingo and terms which are completely foreign to you.

To make the process run more smoothly, and to take the uncertainty and confusion out of buying a Jacksonville home, the first thing you need to do is familiarize yourself with common real estate terms.

Your knowledge of real estate basics will allow you to be better prepared to handle the home buying process and the many challenges that come along with it.

The following terms are commonly used during the home buying process:

Adjustable-Rate Mortgage – Often referred to as ARM, adjustable-rate mortgages are home loans which change periodically according to fluctuating interest rates. Interest rates for ARMs are often tied to a particular index.

Amortization Schedule – An amortization schedule is a table of your payments, which are typically showed to you at closing, which detail each payment and how much of it will go towards the loan’s principal and how much will go towards interest. An amortization schedule details these numbers for the life of the loan.

Appraised Value – The appraised value on your home is typically reflective of the home’s fair market value, according to a professional property appraiser.

Closing Costs – Closing costs are expenses which are incurred as a result of transferring ownership from the seller to you, the buyer. Typical closing costs include attorneys’ fees, taxes, the origination fee, and costs associated with the title insurance and survey.

Escrow Account – Your lender may set up an escrow account in conjunction with your home loan. An escrow account holds additional money you pay each month on your mortgage (above what the loan amount and interest totals) for the payment of property taxes and homeowner’s insurance.

Fixed-Rate Mortgage – A fixed-rate mortgage is a home loan in which the interest amount remains intact throughout the life of the loan.

FHA Mortgage – An FHA mortgage is a home loan which is insured by the Federal Housing Administration (FHA).

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