Rhodes Enterprises, Inc., Rio Grande Valley Home Builders, Share Real Estate Terms Insights To Help You Through The Home Buying Process
As local Rio Grande Valley home builders, we know that buying a new home is an exciting time, but also understand that not everyone has the background or experience with everything that goes into buying a new home.
We’ve put together a list of important Rio Grande Valley real estate terms, to help you better understand the buying process and prepare you for find the ideal home you’ve dreamed in Bentsen Palm.
Buyer’s vs. Listing Agent – Typically there are two agents involved in a home buying process. Your agent that is helping you find and purchase your new home, is the Buyer’s Agent. The Listing Agent represents the seller of the home or in the case of Bentsen Palm new homes, the Rio Grande Valley home builder.
Fixed Rate vs. Adjustable Rate Mortgage – Both are considered conventional loan options for mortgages. A fixed rate mortgage has a predetermined interest rate that is consistent throughout the life of the loan. These are typically 15, 20 or 30 year loans. An adjustable rate mortgage has a variable interest rate, which can be adjusted after an introductory period based on the market and is often used for investments or those planning to move in under ten years. These are typically 5, 7, or 10 year loans.
Pre-Qualified vs. Pre-Approval – Getting pre-qualified is the initial step in getting a mortgage home loan and a relatively quick procedure where you, the home buyer, provide the lender with an overview of your financial picture, including your debt, income, and assets. Once this has been evaluated the lender can provide you with a loan amount that you would pre-qualify for. Preapproved is the next step in securing a mortgage loan. During this part of the process, you’ll complete an official mortgage application and be asked to provide the necessary documentation regarding your financial background and credit rating. Getting preapproved for a home loan will make the home buying process easier for you with an understanding of what you could budget to spend.
Inspection and Appraisal – Once you’ve made an offer on a new Bentsen Palm home, you’ll need to have it inspected. If you are building a new home in Bentsen Palm there will be a number of inspections as well as a final inspection before your final walk-through. The inspector will go through the entire home to ensure everything is in working order and up to code. An appraisal is what your lender will require in order to secure your mortgage. This will be a licensed appraiser that will investigate, measure and estimate the home’s value based on the comparable homes in the area.
Contingencies – At the time of putting an offer on your home you can also specify contingencies that the home builder or seller must meet before a contract is signed. Your agent can help you identify types of contingencies you should employ if any.
Offer and Contract – Once you’ve found the ideal home or floorplan in Bentsen Palm, you’ll make an offer on the home with the help of your agent or attorney. If the home builder/seller accepts your offer and you both agree to the terms along with the contingencies, then you’ll move to a contracting phase. At this point, you will likely have to make a deposit of earnest money that will not be returned if you decide not to move ahead.
Title Insurance – Following all of the negotiations and after the seller has accepted your offer, you should receive a title report for your new home. The report should indicate that the seller had rights to the title and that there are no other outstanding liens on the home.
Closing Costs – The good news is you’re getting closer to holding the keys to your new home in your hand! During the closing process on your new home, you’ll be required to sign all of the paperwork as well as pay the down payment and final closing costs. The closing costs are typically 2-5% of the purchase price of the home and include excise tax, loan processing and title insurance cost.