If you’re like most people, you’ll need to borrow money from a lender in order to buy a home in Tampa Bay.
That means you’re going to hear a lot of new terms floating around when it comes to financing… but what do they all mean?
Check out our mortgage term glossary to make sure you can pick up what your lender is laying down.
Mortgage Term Glossary for Tampa Bay Home Buyers
Adustable-Rate Mortgage
An adjustable-rate mortgage is a loan with an initial fixed-rate period; after that, your rate can change once each year (and it could go up or down).
Amortization
Amortization is the reduction of debt over the term of the loan; it’s what happens when you pay off the principal, not the interest.
Appraisal
An appraisal is a written estimate of a property’s value.
Closing Costs
Your closing costs are the expenses you’ll have to pay to buy the home (not counting the home’s sale price). (See “Are there hidden costs to buying a home?” for more information.)
Deed
The deed is the legal document that transfers ownership of a property.
Earnest Money
Earnest money is the cash you put down to show the seller you’re serious about buying; when you close, this money is applied to how much you owe on the home.
Fixed-Rate Mortgage
A fixed-rate mortgage is a loan that has a fixed interest rate that won’t change over the term of the loan.
Points/Discount Points
Points are fees you pay your lender at closing, and in most cases, one point equals one percent of your loan amount. The more points you pay, the lower your interest rate will be on your mortgage loan.
Principal
The principal is the balance you owe on your loan. The interest is separate; that’s what you’re paying the lender. The principal goes toward paying down the sales price of the home.
Private Mortgage Insurance
Private mortgage insurance, commonly called PMI, is the insurance many people are required to buy if they’re coming up with a down payment that’s lower than 20 percent of the home’s purchase price. (An exception: VA loans, in which you don’t need to buy PMI even if you don’t put any money down on the home.)
Title Search
Your lender will most likely require a title search to make sure the seller is legally able to sell the property.
Underwriting
Underwriters determine the risks involved in a particular loan. They also come up with terms and conditions of loans on a case-by-case basis.
Are You Moving to the Tampa Area?
If you’re thinking about moving to Tampa, check out the links below to search for homes with just one click:
When you’re ready to start looking at homes for sale in Hillsborough County, Pasco County or Pinellas County, we’re here to help.
Call us at 727-584-8480 or 813-961-6000. If it’s easier, get in touch with us online. We’ll begin searching for your new home right away.