Real Estate Terms First Time Home Buyers Should Know Pt. 3

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In the real estate world, there’s lots of terms and phrases that might leave your head spinning. Here’s a list to help get you started at becoming fluent in real estate!

Pre-Qualification

Not to be confused with pre-approval, pre-qualification is an informal assessment of your borrowing power based on information you provide the lender. Pre-qualification does not guarantee that you will get the loan but is a quick way to see an estimate of how much you can afford when shopping for a home.

Principal

Your mortgage principal is the amount you actually borrowed to buy the home. Interest is calculated on the principal. Generally, when a loan payment consists of only a principal and interest payment, the amount owed for interest is processed first and the remaining amount of the payment is applied to the principal balance.

Real Estate Agent vs. Realtor

A Realtor refers to a real estate agent who is a member of the National Association of Realtors. A certified Realtor adheres to a strict code of ethics based on professionalism and protection of the public.

Title Insurance

An insurance policy that protects the buyer or lender against defects or problems with the title when property ownership is transferred. Title insurance protects against claims for past occurrences, while other forms of insurance protect against future events.

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Categories: Shorewest Tips

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