How scary is a Real Estate Contract?

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How scary is a Real Estate Contract?

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.

Real Estate Contract

  • 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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