First Time Home Buyer’s Guide

First Time Home Buyers | North Raleigh Real Estate

First time home buyers often have a disadvantage when it comes to understanding the overall process, as well as, the "lingo" that is used in the North Raleigh real estate world. To help with that, Roark Premier Team is providing you with a first time home buying glossary that will hopefully help you during your first time home buying experience. These terms and definitions are courtesy of

First Time Home Buyer Glossary | North Raleigh Real Estate

VA Loans - These loans are offered by the Department of Veterans Affairs exclusively to members of the military.

Title Insurance - An insurance policy that protects against damages due to defects in the chain of title.

Pre-Qualification - The process of determining if a borrower qualifies for a loan and the approximate amount of money he/she may qualify to receive.

Point - A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the loan.

PMI (Private Mortgage Insurance) - Like mortgage insurance, this policy protects the lender against a buyer’s loan default. Lenders on high-risk loans – typically when the LTV (Loan-To-Value) exceeds 80 percent – require PMI. When the homeowner’s LTV falls below the specified rate, PMI may be discontinued.

PITI (Principal, Interest, Taxes and Insurance) - Your monthly mortgage payment. Principal is the part of the payment that pays down the loan, the interest is the part of the payment that pays the lender for loaning you the money to buy the home, taxes and insurance are the necessary evils that must be paid for, typically into an escrow account each month.

Offer - A presentation of a bid on a home for sale.

Mortgage Insurance - An insurance policy that compensates the lender in the event a borrower defaults on his loan.

Mortgage - A legal document that pledges the house to the lender as security for the loan to purchase the house.

Loan-To-Value (LTV) Ratio - The LTV is a ratio that lenders use to assess risk when providing a mortgage loan. The LTV represents the amount of the mortgage divided by the appraised value of the property. Lenders consider higher LTV ratios as high risk loans.

HUD 1 – This is the settlement statement provided to the homebuyer. The HUD 1 details all fees charged by the lender.

HOA Docs - Homeowner’s Association Documents. When purchasing a condo or a home in a managed community, you have a right to view recent HOA meeting minutes, a copy of their current budget, CC&Rs and other equally fascinating documents. Think boring, and you’ve got an idea of what’s included in the HOA docs. They’re important, though, so set aside an hour or two to go over them.

GFE - The Good Faith Estimate is a form provided to borrowers by lenders. It is required by law and allows borrowers to compare the rates and terms of multiple lenders when shopping for a home loan. The GFE must include a list of all fees associated with the mortgage loan and it must be provided to the borrower within three days of loan application.

Fixed-Rate Mortgage - A type of mortgage in which the interest rate does not fluctuate over the life of the loan.

Roark Premier Team | North Raleigh Real Estate

If you are considering buying a home, call Roark Premier Team. We are here to help you search the North Raleigh real estate market for the home of your dreams! For more information on buying a home or to ask our real estate agents any questions, feel free to contact us!

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