Larry Costa REALTOR®'s Blog
Whether you’re a first time homebuyer or a seasoned homeowner, the terminology of mortgages can be confusing. Since buying a home is such a huge financial decision, you’re also going to want to make sure you understand every step of the process and all of the conditions and fees along the way.
In this article, we’re going to explain some of the common terms you might come across when applying for a home loan, be it online or over the phone. By learning the basic meaning of these terms you’ll feel more confident and prepared going into the application process.
We’ll cover the acronyms, like APRs and ARMs, and the scary sounding terms like “amortization” so that you know everything you need to about the terminology of home loans.
ARM and FRM, or adjustable rate vs fixed rate mortgages. Lenders make their money by charging you interest on your home loan that you pay back over the length of your loan period. Adjustable rate mortgages or ARMs are loans that have interest rates which change over the lifespan of your loan. You may start off at a low, “introductory rate” and later start paying higher amounts depending on the predetermined rate index. Fixed rate mortgages, on the other hand, remain at the same rate throughout the life of the loan. However, refinancing on your loan allows you to receive a different interest rate later down the road.
Amortization. It sounds like a medieval torture technique, but in reality amortization is the process of making your life easier by setting up a fixed repayment schedule. This schedule includes both the interest and the principal loan balance, allowing you to understand how long and how much money will go toward repaying your mortgage.
Equity. Simply state, your equity is the the amount of the home you have paid off. In a sense, it’s the amount of the home that you really own. Your equity increases as you make payments, and having equity can help you buy a new home, or see a return on investment with your current home if the home increases in value.
Assumption and assumability. It isn’t the title of a Jane Austen novel. It’s all about the process of a mortgage changing hands. An assumable mortgage can be transferred to a new buyer, and assumption is the actual transfer of the loan. Assuming a loan can be financially beneficial if the home as increased in value since the mortgage was created.
Escrow. There are a lot of legal implications that come along with buying a home. An escrow is designed to make sure the loan process runs smoothly. It acts as a holding tank for your documents, payments, as well as property taxes and insurance. An escrow performs an important function in the home buying process, and, as a result, charges you a percentage of the home for its services.
Origination fee. Basically a fancy way of saying “processing fee,” the origination covers the cost of processing your mortgage application. It’s one of the many “closing costs” you’ll encounter when buying a home and accounts for all of the legwork your loan officer does to make your mortgage a reality--running credit reports, reviewing income history, and so on.
When you’re shopping for a home, it’s essential to find a balance between being respectful of the owner’s privacy and being open enough that you ask the right questions and find out what you need to know about the home.
In today’s post, I’m going to cover all of the etiquette and best practices when it comes to viewing someone’s home that you’re interested in buying.
Before we get into the fine details of questions to ask and what areas are okay to explore, let’s take a minute to discuss the basic etiquette of entering someone’s home.
First, make sure you arrive on time and ready to tour the home. Being late will give the seller and their agent the perception that you might not be a serious buyer if you aren’t arriving at the showing on time.
Additionally, when you first enter the home, it’s a good idea to ask if you should take off your shoes. Some homeowners have a no-shoes-in-the-house policy that they extend to guests as well as friends and family. But, at the very least, make sure that your shoes are clean so you don’t track mud around the home.
In terms of cleanliness, make sure you dress appropriately for the showing and that you don’t bring in food or drinks. You don’t want to be dropping crumbs or spilling coffee in a home that is being kept meticulously clean for house showings.
Ask the right questions
As you are viewing the home, it’s appropriate to ask questions that may come up. Feel free to ask about the age of the home and when repairs and renovations were made.
It’s also fine to ask questions about the neighborhood and town if you’re unfamiliar with the area. Traffic and noise levels are pertinent information for any serious buyer. And these are questions that will be vital to understanding the home better and whether it’s a good fit for you at the moment.
Where can you snoop?
It’s a good idea to ask before opening cabinets, closets, and doors the first time. But these are all reasonable things to expect to be able to look inside of when buying a home.
It’s not a good idea, however, to look inside nightstands, dressers, and other compartments that are more private and personal.
If a homeowner or agent asks that you don’t enter a room entirely, such as a bedroom, bathroom, or basement, this is a major red flag that there’s an issue with the room in question. Every room of the home should be in-bounds when it comes to viewing a home that you might someday buy.
At the end of the viewing
Once the viewing is over, it’s best to simply compliment the home, offer your thanks for the tour, and head home to consider your experience.
Avoid making any sharp criticism of the home before leaving, and don’t mention any negotiations or ask questions about the pricing at this point. It’s better to leave on a positive note and have these discussions in private with your family before taking your offers to the seller.
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Having a beautiful home is wonderful, but having a beautiful home with an elegant and functional kitchen is fantastic. Updated kitchen décor and finishes are an on-trend way to create a warm gathering place for friends and family. A real wood countertop is a top option for perfecting the natural kitchen décor motif.
Wooden Countertop Styles
There are distinctive styles of wooden countertop materials available, and each serves a different purpose and esthetic.
Butcher Block Countertops: For countertop that allows you to slice and cut directly on the surface, the butcher block is your best choice. The wood is two to three inches thick of alternating species and can withstand damage from chopping and dicing with proper care. Available in various wood mixtures as end-grain and edge-grain, its hardness and color options make it easier to choose the one that fits into your kitchen theme.
Reclaimed Wood Countertops: For people who appreciate the rustic look, a repurposed wood countertop is a great option. Currently among the trending countertops, reclaimed wood is relatively simple to find and source locally. Most reclaimed wood countertops come from recycled or discarded wood.
Live Edge Wood Countertops: Made from planed but not trimmed raw wood, a live edge countertop retains the original shape of the tree. The unique thing about this countertop is its rustic and uncommon look; it curves inward in some areas and rounds out in others, giving your kitchen or bar area a beautiful and unique look.
Solid Wood Countertops: The solid wood countertop option works well with all kitchen designs, creating a timeless and traditional look for your kitchen. Thick planks of mahogany, walnut, knotty alder, or other hardwoods waterproofed with acrylic polyurethane come in flat, dull, satin, and semi-gloss finishes for an elegant addition to your countertops.
Your Choice of Wood
Ensure that the design, grain, and finish of the wooden countertop you choose is appropriate for its purpose. Hardwood like maple, teak, oak, chestnut, and mahogany make great countertop material, especially if you intend to chop and slice directly on the counter surface. For a more sustainable option, bamboo, while not technically wood, is an attractive and durable choice.
Your kitchen countertop has a significant impact on the look and feel of your room. For best results, consult with or hire a professional contractor who is knowledgeable about the installation process for these unique surfaces.