4 Important Terms to Know Before You Buy a Home

Home Buying in UtahBuying a house involves a lot of money. You need to make sure you're financially capable of taking this kind of responsibility before you even think about shopping for one. This way, you won’t experience any stress when it comes to paying your bills once you own a home. Here are some terms you should know about to have a better grasp as to how much financial responsibility is involved in buying a home.

Credit Score

The credit score is a big factor that banks and lenders look into when evaluating their potential borrowers’ capability to pay their mortgage loan. If you are planning to buy a house, better improve your credit score months in advance. This way, more banks will offer you mortgage loans and you’ll have more freedom when choosing which one fits your needs and budget the most.

Appraised Value

Appraised value is the value of a home given by a certified home appraiser. They consider the market condition, location of the property, neighboring residential properties, and overall condition of the home to provide this expert opinion. You need to hire an appraiser to justify your offer to the seller.

Mortgage Rate

Mortgage rate in Utah is the interest rate of your mortgage loan to a certain bank or lender. Some mortgage rates are fixed while some are adjustable depending on what kind of mortgage you signed up for. The higher your down payment is, the lower the mortgage rate will be.

Closing Costs

Closing costs pertain to the additional transactional fees that you must settle before a home purchase is finalized. This often includes:

  • Lender’s fee
  • Transfer tax
  • Property tax
  • Attorney’s fee
  • Real estate agent commission
  • Title insurance premium
  • Deed filing fee
  • Credit check fee
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Remember these important terms and talk to your real estate agent about them once you start the home buying process.