Buying a House

Adjustable-Rate Mortgage (ARM)

A mortgage in which the initial interest rate is normally fixed for a specified period of time after which it is reset periodically, often every month

Fixed-Rate Mortgage

A mortgage that has a fixed interest rate for the entire term of the loan as long as ontime payments are being made

Closing costs

Fees you pay your lender at the time you buy a house. These costs can include fees for appraisal, title insurance, and inspections.

HOA fees

Homeowners association fees. These cover the cost of maintaining common community areas.

Down payment assistance

Programs that help people pay for some of the upfront costs of buying a house. These programs are usually available at the state or local level.

Property taxes

Taxes paid by homeowners to the local government for things like public schools, roads, and fire departments.

Generational wealth

The assets, resources, and financial advantages that are passed down from one generation to the next within a family

APR

The cost you pay each year to borrow money, including fees, expressed as a percentage

Racial Wealth Gap

The difference between the typical assets of households of different races and ethnicities. This gap/disparity is due to a variety of factors, including income inequality, generational wealth, housing policies, discrimination in education and employment, and more.

Listing agent

A type of real estate agent who works for the seller. They help the seller prepare the property for sale, market it to potential buyers, and negotiate the sale price and terms on the seller's behalf.

Contingency

A condition that must be met before a sale is finalized.

Mortgage

A loan that is taken out by people and businesses to buy real estate without paying the entire price up front

Mortgage Preapproval

A document from a lender that states how much and what type of loan you are expected to qualify for.

The rule of three

A guideline that a person can afford to buy a house that is valued at up to three times their household income (before taxes).

The 28-36 rule

A guideline that a person should spend at most 28% of their gross income on their housing costs and 36% of their gross income on total debt payments.

Real Estate Agent

A person whose job it is to help buy or sell houses, for people.

Down payment

A portion of the total cost of an item, such as a car or house, that must be paid at the time of purchase. The buyer will often take out a loan to finance the remaining balance.

Realtor

A real estate agent who is a member of the National Association of Realtors

Counteroffer

A response to an offer that suggests specific changes.

USDA loans

A type of mortgage designed for low- and moderate-income borrowers in rural areas.

VA loan

A type of mortgage designed for veterans

FHA Loan

A type of mortgage that is insured by the government. FHA loans approve borrowers with lower credit scores and/or lower down payments than a conventional mortgage.

Buyer’s agent

A type of real estate agent who works for the buyer. They help buyers find and purchase properties that meet their specific needs and budget.

Escrow

An agreement where a third party holds assets (eg. money) during a transaction. For example, a buyer may put a deposit in escrow when buying a house.

Home appraisal

An estimate of a home’s value based on its features and the value of comparable homes.

Home inspection

An examination to certify the condition of a home, including the roof, foundation, basement.

Home Equity

The value of ownership built up in a home or property that represents the current market value of the house minus any remaining mortgage payments