Joey Condon
Realtor®
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Real Estate Contracts Category
How scary is a Real Estate Contract?
June 14th, 2010 Categories: 1, Buying Real Estate, Real Estate Contracts
Real Estate contracts are full of legal terms that can be difficult to understand. Be sure to ask before you sign – any misunderstanding may be costly to you in the future.
I am here to help you with any real estate question you may have. Here are a few definitions that I think may be helpful when thinking about buying a home.
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Adjustable-rate Mortgage (ARM) – A mortgage that does not have a fixed interest rate. Based on market conditions, the rate can increase or decrease, affecting your payment.
- Private Mortgage Insurance (PMI) – This fee protects the lender against a loss if a borrower defaults on the loan and is added to the monthly mortgage payment. PMI is usually required if the down payment is less than 20% of the purchase price. VA, FHA, VA Guarenteed loans fall into this catagory. Payments can be reduced sometimes by over $200 a month if you are able to put 20% down.
- Fixed-rate Loans – A mortgage that has a fixed interest rate throughout the life of the loan. Repayment terms are generally 15, 20, or 30 years. Payments stay the same unless refinancing is done.
- Escrow – Monies or documents held by a neutral third party before closing on a property. It can also be an account held by the lender, usually set up to pay for taxes and insurance on their investment.
- Loan Origination Fee – A fee charged be the lender for processing a loan. All lenders charge different amounts so it is always best to shop around, they will compete for your business.
- Points – These fees are paid to the lender for the loan, usually in relation to the interest rate. One point is equal to 1% of the principal amount of a mortgage loan. You can “buy down” your interest rate to lower your monthly payment.
- Lock-in - A written agreement setting a specific interest rate on a home loan. The lock-in is typically good for a specific time, usually 60 to 90 days.
- Offer – When one person proposes a contract to another; if the other person accepts the offer, a binding contract is formed.
When buying a house in College Station you always need to make sure you are making the right decision when filling out a contract or offer on a house. Buyer’s remorse is not something you want, I can make sure that doesn’t happen.
Call me with all your Real Estate Contract Questions!
Joey Condon, Realtor
Rock Solid Real Estate!
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