January 27, 2023

Key Terms for Homebuyers Defined [INFOGRAPHIC]

Smiling couple, with man shaking someone's hand

If you have #homeownershipgoals for 2023, you’ll need to know some of these key terms for home buyers. Read through them, and then check out the infographic for more.


Appraisal

An appraisal is a report highlighting the estimated value of the property completed by a qualified third party.


Closing Costs

Closing costs are the fees required to complete the real estate transaction and they are paid at closing.


Credit Score

Your credit score is a number ranging from 300 to 850 that’s based on an analysis of your credit history.


Down Payment

A down payment is typically 3.5% to 20% of the purchase price of the home, but there are 0% down programs available as well.


Mortgage Rate

The mortgage rate is the interest rate you pay to borrow money when buying a home.


Pre-approval Letter

The pre-approval letter is from a lender and shows what the lender is willing to lend you for your home loan.


Inspection Contingency

The inspection contingency is a provision in a contract that requires an inspection to be completed.


Affordability

Affordability is the measure of whether someone earns enough to qualify for a loan on a typical home based on the most recent price, their income, and mortgage rate data.


Equity

Equity is the value of your home above the total amount of liens against your home.


Final Thoughts

Buying a home[1] is a major transaction that can seem even more complex when you don’t understand the terms used throughout the process.


If you’re looking to become a homeowner this year, it’s important to know these housing terms[2] and how they relate to the current housing market so you feel confident throughout the homebuying process.


Speak with a Realtor®, who will talk you through the process of buying a home and help make your dreams come true.

You may be interested in:

Woman adjusting a thermostat on a white wall in a hallway. She wears a striped shirt, jeans, and has a focused expression.
August 20, 2025
Whether you’re looking to lower utility bills, preparing to sell, or simply modernizing your home, here’s how to get started and what to keep in mind along the way.
VA loan document with small wooden house, pen, and clipboard.
August 20, 2025
For those who’ve completed military service or are actively serving our country, the VA Home Loan Guaranty is a great path to achieving the dream of homeownership.
Miniature house, truck, boxes, calculator, and pen on a surface; symbolizing moving and financial aspects.
August 20, 2025
Buying or selling a home is an exciting—but stressful—milestone. For some, the most daunting part is packing and moving. But proper planning and a solid packing strategy can ease the task. These 10 practical tips will help. You’ve got this!
The word tax is written on a wooden table with small houses.
July 23, 2025
Homeownership has always had its perks when it comes to tax deductions, but the latest tax reform helps homeowners save even more money. Here’s why.
A woman is holding a model house in her hands.
June 13, 2025
The real estate market constantly shifts, and knowing whether conditions favor buyers or sellers can help you make smarter, more confident decisions. Here’s how to recognize which type of market you’re in and what each means for you:
A man is using a calculator while holding a piece of paper.
May 15, 2025
Did you know? According to a recent study, 72% of people with student loans think their debt will delay their ability to buy a home.
A house is sitting on top of a graph on a computer screen.
May 15, 2025
With all the uncertainty in the economy, the stock market has been bouncing around more than usual.
A room filled with lots of cardboard boxes and a wooden crate.
May 15, 2025
If you have a 3% mortgage rate, you’re probably pretty hesitant to let that go. And even if you’ve toyed with the idea of moving, this nagging thought may be holding you back: “why would I give that up?”
A close up of a real estate deed
April 9, 2025
Closing day is an exciting milestone for buyers and sellers alike. To complete the process of a home sale, a property’s ownership rights are formally transferred from the seller to the buyer. Here’s what you should know about deeds and titles:
Show More