Thursday, November 17, 2016

Real Estate Terms Every North Shore Buyer and Seller Should Know

No matter if you're buying a home or selling your property on Chicago's North Shore, you will undoubtedly run into a few real estate terms that you may not be familiar with. You could hear these used by your lender, your real estate agent or any of the parties involved in the real estate transaction.

But not to worry! As your local North Shore real estate expert, I'm happy to define a few of the essential terms you will hear throughout the process of buying and selling a home. Take a look through the glossary below and keep them in mind as you navigate the market:

Stands for annual percentage rate and refers to the interest rate associated with your mortgage in Northbrook, Glencoe, Deerfield, Winnetka, Highland Park and the surrounding areas.

Stands for adjustable rate mortgage and refers to the type of loan whose rate changes after a specific amount of time or as market conditions change.

Stands for debt to income ratio and refers to the figure that many lenders will use to determine a buyer's eligibility for a mortgage. You can calculate your DTI by weighing all of your monthly debts, including credit cards and auto loans, against your monthly income.

Stands for private mortgage insurance. This applies to those North Shore buyers who put down less than 20 percent on a new home in Northbrook, Glencoe, Deerfield, Winnetka, and Highland Park.

Stands for homeowners' association. Homes and condominiums found within these communities typically have monthly dues or fees that cover maintenance, landscaping and snow removal.

Fixed Rate Mortgage
A fixed-rate mortgage unlike an adjustable rate mortgage that we discussed earlier has one rate that applies throughout the life of the loan. This type of mortgage does not have a rate that changes with market conditions.

A third party is often involved in larger purchases to manage the funds associated with the transaction. Your money for a real estate purchase is held in an escrow account to show the seller that the funds are available.

If you're a homeowner on the North Shore, you've likely heard this term which refers to the amount of ownership you have in the property. You can find this figure by calculating what you owe on your mortgage and subtracting from its market value.

This is the process through which the value of your home is determined. Many lenders will want to know this figure before they determine how much to loan you via your mortgage to ensure the loan amount does not exceed the value.

Closing Costs
These costs include appraisal fees, real estate agent fees, loan origination fees, escrow fees, credit check fees and more. Typically paid by the buyer, a portion or all of the closing costs can sometimes be negotiated to be paid by the seller.

Have you heard other real estate terms that you're unsure about during your home buying or selling journey thus far? Want more information about the current real estate market on Chicago's North Shore? Give me a call today!

Janie Bress
Your North Shore Real Estate Expert

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