Key Terms to Know when Buying a Home

Southern Oregon Real Estate Market: Key Terms to Know when Buying a Home

Buying a home is a significant transaction that can seem even more complex when you need help understanding the terms used throughout the process. As a market expert in Southern Oregon, I want to provide you with some key terms to know when buying a home in the area.

Understanding Appraisals in the Southern Oregon Real Estate Market

First and foremost, it’s essential to understand the concept of an appraisal. An appraisal is a report highlighting the estimated value of the property completed by a qualified third party. Lenders rely on appraisals to validate a home’s value and ensure they’re lending only what the home is worth.

Navigating Closing Costs in Southern Oregon

Another important term to know is closing costs. These are the fees required to complete the real estate transaction and are paid at closing. Be sure to ask your lender for a complete list of closing cost terms, including points, taxes, title insurance, and more.

The Importance of Credit Scores in the Southern Oregon Real Estate Market

Your credit score is also a crucial aspect of the home-buying process. A credit score is a number ranging from 300-850 based on an analysis of your credit history. This helps lenders determine the likelihood you’ll repay future debts.

Financing Your Southern Oregon Home: Down Payments and Mortgage Rates

When it comes to financing, it’s important to understand the concept of a down payment. Down payments are typically 3.5-20% of the home’s purchase price. However, there are some 0% down programs available. Ask your lender for more information about what you may qualify for.

The Importance of Pre-Approval Letters and Inspection Contingencies

Another important term is the mortgage rate. This is the interest rate you pay to borrow money when buying a home. As mortgage rates fluctuate, it’s important to consult with a lender to know how it can impact your monthly mortgage payment.

A pre-approval letter is another important document to have during the home-buying process. A pre-approval letter is a letter from a lender that shows what they’re willing to lend you for your home loan. This, plus understanding your savings, can help you decide on your target price range.

An inspection contingency is a provision in a contract requiring an inspection to be completed. This essential step gives you information on the home’s condition and potential repairs.

Affordability in the Southern Oregon Real Estate Market

Affordability is another term that plays a significant role in the home-buying process. It is a measure of whether someone earns enough to qualify for a loan on a typical home based on the most recent price, income, and mortgage rate data. When home prices and mortgage rates are higher, it can impact affordability.

Understanding Equity in Southern Oregon

Finally, it’s important to understand the concept of equity. Equity is the value of your home above the total amount of liens against your home. Many homeowners realize they have more equity than they thought and use it to move.

In conclusion, buying a home is a significant transaction that can seem even more complex when you need help understanding the terms used throughout the process. If you’re looking to become a homeowner this year, it’s essential to know these housing terms and how they relate to the current market, so you feel confident throughout the home-buying process. Work with a trusted real estate professional who can answer any questions as they come up.

A Few Helpful Links:

1. “Find a qualified appraiser in Southern Oregon” – https://www.appraiser.org/find-an-appraiser
2. “Calculate your potential closing costs” – https://www.bankrate.com/calculators/mortgages/closing-costs-calculator/
3. “Check your credit score for free” – https://www.creditkarma.com/