Nicknamed “ Perfect Village” by its residents, Prairie Village, Kansas, is a great place to settle down if you enjoy the more laid-back, rural life. The safety and friendliness of this city makes it a nice place to raise a family, and thus many new homeowners are attracted to purchasing in Prairie Village. If you’re looking at homes in this area, you may find yourself wondering how you can afford to pay for it. Thankfully, lenders in the area can help you with a mortgage. Once you have a mortgage, you can also learn more about refinance options and home equity loans to help make the most of your investment. Here is a list of some real estate investing vocabulary that you need to know before you begin shopping:
Down Payment: When you purchase a home, the money you pay in a lump sum up front is called the down payment. The purpose of the down payment is to solidify your interest in the house and put some equity into the property. Most mortgage lenders require about 20% of the total value as a down payment, but this varies according to your house’s value and your specific lender.
Equity: Think of each dollar in the house’s total value as a tiny little share of the property. As you pay off the loan, you possess more and more of these shares. This is what’s known as equity. You can take advantage of that equity with a second mortgage, cash-out refinance, or home equity loan at a later date if you wish. It’s also important to note that your equity will rise effortlessly if the value of your home rises due to the changing real estate market. You can also raise your home’s equity by doing improvements.
Underwriting: When you apply for a mortgage, refinance, or home equity loan in Prairie Village, Kansas, you’ll see a charge for underwriting on your final closing costs statement. The underwriter is the person who digs through your background to determine how big of a risk you are to the lending company. A poor credit history, low income, and other loans make you a larger risk, and you may pay higher interest rates because of that.
Closing Costs: Basically, closing costs are charges for things associated with your loan other than interest. You can expect to pay at least $1000 for closing costs, and possibly much more. Appraisal, document preparation, wire transfer, travel fees, taxes, title verification, and many other things are included in the closing costs.
Home Equity Loans: Home equity loans are the second mortgages that people talk about having. When you take out a home equity loan, you won’t change the terms and conditions of your original mortgage agreement, but you will have a separate loan to pay every month. Your home equity loan cashes in on some of that equity you’ve built up over the years. Most lenders allow clients in good standing to take out up to 80% of their home’s equity in a home equity loan.
Market Value: This is an easy one: it’s how much your home is worth. Note, though, that not all homes sell for their market value. If you have a seller who wants to sell quickly, he or she may sell below market value. This is usually the case when a home is foreclosed after the homeowner defaulted on the mortgage, because banks don’t like paying property taxes and other fees. On the other hand, if a number of buyers are interested in a property, a bidding war may occur, and the house will possibly sell for a much higher market value. In any case, an appraiser can tell you the true market value of a home, and when your mortgage is concerned, you’ll have to pay for this service.
There are a variety of other vocabulary words to consider if you’re interested in purchasing a home in Prairie Village, Kansas. This may be a perfect place to live, but only with a professional’s help can you make sure you’re getting the best deals. Use the form below to contact us today and we’ll answer all of your questions.
