Mortgages are often the most confusing aspect of buying your first home.
First, it’s a lot of paperwork, even in spite of laws designed to make them more easy to understand.
A couple of years ago, a federal rule was created to provide all home buyers with a simple statement that made it very clear exactly how much would be owed every month, and what every fee involved with getting the mortgage meant to the bottom line.
It’s called TRID, or, the Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA).
The Truth In Lending Act was originally passed in 1968, but the crazy mortgages that surfaced before the recession somewhat demanded an update.
The point is, it’s supposed to be easy for home buyers in Las Vegas to understand the process.
What might help people feel more comfortable with the process is an understanding of some of the legal jargon and terminology that accompany a home loan.
PMI; Private Mortgage Insurance
This is an added fee from the lender when a home buyer doesn’t have at least a 20% down payment. It’s a form of protection for the bank.
These can be useful. Basically, you can buy a lower percentage rate on your mortgage. In this case, points refer to a percentage of the interest rate.
This refers to the formal process of determining a person’s ability to pay back a loan. It’s not unlike research into your financial history. This is where the decisions are made.
The period between an offer being fully accepted by both parties and the date of closing. This window of time is typically 30 to 45-days-long and is designed to let a buyer conduct complete due diligence on the home. It’s common for additional negotiations to take place during escrow.
it’s supposed to be easy for home buyers in Las Vegas to understand the process
The Federal Housing Administration will back a loan that was secured with less than 20% down. It will also secure a loan for those who may not have the best credit score in the world. If you get an FHA loan, you may also be paying that “PMI” we talked about.
The Century 21 Gavish Real Estate team is always available to help you navigate the ins and outs of home ownership in Las Vegas.
While some of the terms and processes can be a little intimidating at first, trust us, they’re designed to protect you and ensure you leave the closing table confident and comfortable.