When it comes to buying a house there are some things you need to know.
For example, there are terms that are used when buying a house that are important to be aware of.
It is always to your advantage to know these terms and how they are used.

The term - Amortization
The payments that you make in paying off your loan are placed in a schedule. This schedule indicates the required payments from day one until the loan is paid off. It shows you what portion of your payment is allocated to interest and what portion goes toward paying down the loan principle. Toward the beginning of the schedule you will see the most of your payment goes toward paying the loan interest.

The term - Appraisal
This is an estimation of the value of the home that you are looking to purchase done by a professional. The buyer usually pays for this. Usually before you are awarded a loan you must carry this out and have a licensed appraiser appraise the value of the property that you intend to purchase.

The term - Buyer's Agent
The buyer’s agent is concerned with the interests of the home buyer while the seller’s agent looks after the needs of the seller. For the buyer to have an agent he must sign an agreement to this effect with an agent. If there is no such agreement the agent is free to represent the seller when a real estate transaction is taking place.

The term - Closing
Last step of purchasing a home. Completion of mortgage signing. Time when all payments are made and escrow settled.

The term - Closing Costs
Paid at the closing. Usually between 3% to 5% of the cost of the home. Covers things like legal fees, insurance, utilities due etc.

The term - Earnest Money
Money put down at time of offer to show seriousness of buyer. This also acts to hold the property from being sold to someone else while offer is being considered.

The term - Escrow
Money held by third party such as earnest money and future taxes. May also include bills due and money for closing fees.
The term - FSBO, For Sale By Owner
Owner sells without use of agent. No real estate agent is involved in the deal. Buyer deals directly with owner.

The term - Foreclosure
Lender takes back property when buyer not able to make payments on loan. Property is being held as guarantee against loan.

The term - Lien
Obligation placed on property that must be settled prior to sale.

The term - Loan Origination Fee
Fee charged for setting up loan. Due at closing.

The term - Private Mortgage Insurance
Insurance against default by buyer on loan.

The term - Title Insurance
Protects buyer from claims of others.
Keep these terms in mind as you go through the home buying process.