Buying a house

Front

What is an escrow account?

Back

An account where funds are held by a third party to pay property taxes and insurance on behalf of the borrower.

Front

What is a down payment?

Back

An initial payment made when purchasing a property, typically expressed as a percentage of the purchase price.

Front

What is a credit score?

Back

A numerical representation of a borrower's creditworthiness, used by lenders to assess the risk of lending.

Front

What are closing costs?

Back

Fees and expenses incurred during the finalization of a real estate transaction, typically paid at closing.

Front

How does a credit score affect mortgage interest rates?

Back

A credit score helps lenders assess the risk of lending money and can influence the interest rate offered.

Front

What factors can affect the monthly mortgage payment?

Back

Factors include credit score, interest rate, loan amount, and loan term.

Front

What is a mortgage?

Back

A loan specifically for purchasing real estate, where the property serves as collateral.

Front

What is the significance of a pre-approval letter?

Back

A pre-approval letter indicates how much a lender is willing to lend based on the borrower's financial situation.

Front

What is PMI (Private Mortgage Insurance)?

Back

Insurance that protects the lender in case the borrower defaults on a loan, typically required for down payments less than 20%.

Front

What is the difference between fixed-rate and adjustable-rate mortgages?

Back

Fixed-rate mortgages have a constant interest rate, while adjustable-rate mortgages have rates that can change over time.