5 Real Estate Jargons Everyone Must Know

 

ARM, HRA, pre-equal - the real estate world is full of jargon that can be difficult to comprehend for people who are new to this field. It can add layers of confusion to an already complicated process of buying and selling property. To avoid any confusion later, it is best to know the real estate terms that are used by the people in the industry. Whether you are in the buying or selling process, here are the most common real estate jargons that you must know. It will give you a better understanding of the real estate concepts, which in turn would help in making a better property deal and even save you a fortune.  

 

1-Adjustable-rate mortgage (ARM): Adjustable-rate mortgage is a type of loan in which the interest rates can change after the initial fixed-rate period. This is because it is adjusted based upon the ARM to which it is tied to. When compared to traditional fixed-rate mortgages, ARM loans are less predictable but they can yield significantly lower interest rates during certain periods.

 

 2- As-is: ‘As-is’ is a condition that indicates that the seller is not willing to perform any of the repairs required. This could also mean that it is priced lower than the market price in the neighbouring area. 

It is important to know that if this condition is written at the time of offer and if something happens to the property from the time the offer was written to the closing time, then it will no longer be termed as ‘as is’.

 

3- Refinancing: Refinancing means to restructure the home loan. This involves replacing the old loan with a completely new loan that has a different interest rate and payment structure. The reason why many people refinance their loans is to get a lower interest rate. It helps them in two ways, they can lower their monthly payment as well as the overall debt owed. 

 

 4- Contingencies: This refers to the conditions that must be met by the buyer in order to make the final purchase. It can be considered as a form of protection. If the condition is not met, then the offer becomes open to negotiation. For example, if you are buying a 2 BHK property in Dahisar east Mumbai, there may be contingencies like the loan must be approved beforehand. The most common contingencies are loan, inspection, and appraisal contingency. 

 

 5- Title Insurance: Once all the negotiations are done and the offer is accepted, the buyer is required to pay title insurance as a part of the closing costs. The title insurers usually search public records to ensure that the property seller had the rights to the title. 

 

So next time you get into a real estate transaction, know about these important real estate terms and see how it helps you understand the process and plan your move better.

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