Down Payment: A portion of the home’s selling price that needs to be paid upfront (typically 20% of the purchase price of a home). The down payment allows you to start building equity in the home and will reduce your monthly payments.
Earnest Money: A personal check you submit along with the purchase offer to show the seller that you are serious about buying the property.
Closing Costs: These costs may include title insurance, escrow fees, lender charges, real estate commissions, recording fees and more.
Equity: The difference between the home’s fair market value and the outstanding loans on the property.
Escrow: An account held in the borrower’s name to pay obligations such as property taxes and insurance premiums. A portion of each mortgage payment is added to this account.
Title Insurance: protects the buyer and the lender against issues with the title upon transfer of property ownership.
Private Mortgage Insurance (PMI): This is typically required for down payments of less than 20%.