Joseph Reidy's Blog
If you’re planning on buying a home in the near future and are confused about many of the terms associated with mortgages, you’re not alone. Real estate is its own industry with its own set of processes, terms, and acronyms. If you’re new to the home buying process, there can be somewhat of a learning curve to understand what each of these terms means.
Since buying a home is such a huge investment and life decision, there’s a lot of pressure on home buyers to make sure they get everything right. This makes for a stressful situation for buyers who don’t feel like they understand the terminology of things like mortgages, appraisals, credit reports, and other factors that contribute to the home buying process.
To alleviate some of those concerns and to make the home buying process run more smoothly, we’ve compiled a list of the most common, and most commonly confused, real estate words, terms, and acronyms. That way, when you’re talking things over with your real estate agent or your mortgage lender, you’ll be confident that you understand exactly what’s being considered.
Read on for our real estate terminology glossary.
Adjustable rate mortgage (ARM) - This is one type of home loan. Mortgage rates with this type of loan fluctuate throughout the repayment term of the loan. The fluctuation is based on a market indicator.
Fixed rate mortgage (FRM) - Another type of home loan, a fixed rate mortgage has a rate which does not fluctuate, remaining constant for the life of the term, most commonly 15 or 30 years.
Appraisal - An appraisal is the determination of the value of a property. Appraisals are used when purchasing and selling a home, as well as when refinancing a home loan. Appraisers are required to be licensed or certified in each state and are usually paid for by the lender.
Appreciation - An increase in a property’s value, most commonly due to market inflation, or the general increase in home prices over time.
Depreciation - A decrease in a property’s value, due to either market deflation (uncommon) or the wear and tear on a home that comes with age.
Closing costs - The costs and fees that a buyer is responsible for when purchasing a home or taking out a mortgage. These include underwriting fees, inspections, appraisals, transfer taxes, and more. Closing costs typically range from 2% to 5% of the total loan amount.
Contingency - Home purchases have contracts to protect the interest of the buyer, seller, and lender. Contingencies are provisions designed to protect the buyer or lender should something occur in the time leading up to closing on (or purchasing) the home. One common contingency is the buyer’s right to have a final inspection of the home before closing to ensure no new issues with the home have occurred.
Private mortgage insurance (PMI) - Buyers who cannot afford a down payment of %20 typically are required to take out a private mortgage insurance policy. This policy protects the lender should the borrower default (fail to repay or meet the conditions of their loan).
DiagnosisBefore you start buying new routers or range extenders, you should first get an idea of what your average download speed currently is. There are many free websites out there that can tell you this information, but speedtest.net is one of the veterans in the field that is user-friendly and widely trusted as one of the best. Run the test at different times of the day. See how it's affected by someone else streaming videos on a another device. This will all help provide insight into the issue you're having. If you notice a problem only at certain times of the day, the problem might not be your modem or router, but rather that your internet provider is oversubscribing and getting backed up during internet rush hours. It's also a good idea to change the password on your Wi-Fi network in case you have a neighbor that you're providing free internet too.
Update your hardwareIf you're paying $60+ per month on high speed internet but can't ever stream videos there's a problem. Many people assume that paying more for internet automatically means they'll get faster download speeds. If you're using an outdated router, however, it won't matter how much you pay monthly, you're still going to see slow speeds. Check out some of the latest model routers on Amazon or at Best Buy and read the customer reviews. You won't want to buy any routers that are more than a couple years old as Wi-Fi technology progresses somewhat rapidly.
Tweak your routerIf you recently purchased a brand new router but aren't getting the results you expected, maybe you need to make some changes to the router itself. Try setting the antennas vertically and placing the router on top of a cabinet in your house for better signal reception. Alternatively, you could look into replacing the antennas on your router for ones that will emit a stronger signal.
Expand your signalIf you live in a large house or often use devices in the basement, far away from your router, you might consider buying a wireless range extender. Extenders come in various shapes and sizes. Some are tiny adapters that stick out of your power outlet, others look just like routers, and others work as a system of small routers that you place around your home to provide blanket internet coverage.
Pretend you're in ITThere might be some changes you can make to your router that will make a huge difference in internet speeds. Sometimes that means updating the firmware of your router, other times it means switching the channel your router is broadcasting on to avoid interference with other routers or wireless systems. To make these internal changes, type in the IP address (usually located somewhere on the bottom or back of your router) into your browser and type in your username and password, then follow instructions for your specific router.
There’s numerous reasons why the name on a title to a home may not be the same as the name that’s on the mortgage loan. These reasons include:
- Only one buyer had stable credit
- Only one person was on the loan application
- One person was released from the mortgage
No matter why this is the case, having your name on the mortgage but not on the title to a home can affect you and people residing in the home in different ways.
Why Would Only One Name Be On The Mortgage?
If people are looking to get a home or refinance a home, but only one person has good credit a decision must be made. For the best possible mortgage rates, you’ll want to person with the best credit to be the primary loan holder. This may mean that you need additional legal documents in the process.
The person with lower credit may still be able to have their name placed on the title to the home. Anyone who plans to contribute financially to a home, even if not on the mortgage, should place their name on the title. This would be one instance when a name would be on the title to a home and not on the mortgage loan. In this case, a person has property rights, but no legal-financial responsibility to the home. It’s important to agree on the home arrangement that you’re considering. This would be done through a will or a legal contract. This way, all parties are protected in regards to the ownership of the home should something happen to the individual whose name is on the mortgage.
Legal Things To Consider
Those who are listed on the mortgage are the people who are responsible for house payments. If a person’s name isn’t on the mortgage, it doesn’t release them from complete responsibility from the home. If your name is on the title to the home but not on the mortgage, the bank generally has first dibs on the home if there’s a lapse in payments. If you want to keep living in the house, you’ll have to keep making payments on the home. If you can’t make the mortgage payments, you’ll risk going into foreclosure.
An issue that can come up if your name is not on the mortgage is that you cannot use the home you’re living in as a tax deduction. Even if you make payments on the home, in order for you to get tax benefits, your name must be on the mortgage stating that you’re legally responsible for the home. If you are paying for the mortgage because your name appears on the title to the home, you aren’t legally entitled to pay, giving away your rights to tax benefits. If you’re married, filing jointly, and only one name appears on the mortgage, however, you can use this as a tax deduction. This becomes an issue if two unmarried people buy a home together.
Ask For Legal Assistance
Whenever you have an issue with the title of your home or with names on the mortgage, it’s good to consult legal counsel. The attorney can assist you in determining who is legally responsible for the home and if the people listed on the title of the home are correct. This can help save you from trouble at a future date.
Since credit scores and loans can get messy at times during the home buying process, it’s good to understand all the implications of home mortgages and titles.
If you’re looking to save more energy and money around your home, perhaps one of the first places that you should look is your plugs. Take a look around your rooms and see what outlets are being used. If every outlet is full of plugs, you may have some adjustments to make.
There are so many things in our homes that require plugs including TV’s, microwaves, toasters, clocks, refrigerators, phone chargers, and more.
Anything that is always plugged in actually adds to your electric bill whether you’re using it or not. This is known as phantom power usage. Even when a device isn’t turned on, it’s still using energy.
You don’t want to go around your home and unplug everything, only to plug it back in when you need to use it. Use this handy guide to discover what you should unplug and what you can leave plugged in your home in order to save some energy and some money.
What To Unplug
Large appliances in your kitchen would be impractical to constantly plug in and unplug. Smaller appliances, however, are much easier to manage. These include toasters, coffee makers, food processors, and microwaves. The small digital clocks on many of these devices, for example, are constantly using energy. Do you really need the function? If you don’t need to know the time, you should just unplug it and save your home some energy usage.
We need to charge just about all of our devices including laptops, iPads, phones, and even electric toothbrushes. these items don’t need to be plugged in all the time. Once a device is charged fully, be sure to unplug it. It’s only wasting energy otherwise!
Unplug your computer each and every night. Screen savers and sleep modes don’t actually save much power from being used while your computer is plugged in. It’s a good idea to keep your computer unplugged for safety reasons as well. A strike of lighting hitting, for example, can cause your entire system to fry.
Keep These Items Plugged In
There are certain items that you can leave plugged in at your home without worry. These items include:
- Power strips
- Nondigital items
- Items without clock or LCD displays
Power strips are particularly useful for items like entertainment centers and computer setups. Flipping the switch to the off position on the power strip helps to stop the phantom power usage. The convenient thing is that you won’t need to plug and unplug everything in individually, and you’ll still save power.
Saving energy and money is easy when you have the right strategies put in place.