Understanding Common Mortgage Terminology Before Applying for Mortgage
Buying a home is an exciting milestone, but navigating the mortgage process can sometimes feel overwhelming—especially when faced with unfamiliar terminology. Understanding key mortgage terms can help you make informed decisions and feel more confident throughout your homebuying journey. We connected with Career Classroom, an NMLS-approved mortgage school, and local Arizona real estate expert Swee Ng with HomeSmart to break down some of the most common mortgage terms every homebuyer should know.
Photo by RDNE Stock project from pexel
Pre-Approval vs. Pre-Qualification
Before you start house hunting, it’s essential to get either pre-qualified or pre-approved for a mortgage. Pre-qualification is a basic assessment of your finances based on self-reported information, while pre-approval is a more in-depth process where a lender verifies your income, credit, and assets. Pre-approval gives you a stronger standing when making an offer on a home.
Loan Types
Several types of mortgage loans are available to homebuyers, each with its own requirements.
Here are just a few:
- Conventional Loan – A loan not backed by the government, typically requiring a higher
credit score and down payment - FHA Loan – A government-backed loan designed for first-time buyers
- VA Loan – Available to eligible veterans and active-duty military personnel, offering benefits like no down payment and competitive interest rates
- USDA Loan – A loan program for buyers in rural areas
Down Payment
A down payment is the amount of money a buyer pays upfront toward the home’s purchase price. This ranges depending on the loan type.
Work with a Knowledgeable Realtor
Understanding mortgage terms is just one part of the homebuying process. Working with an experienced real estate professional like Swee Ng with HomeSmart ensures you have a knowledgeable guide to help you navigate the market, negotiate offers, and connect with trusted mortgage professionals.
If you’re considering buying or selling a home in Arizona, reach out to Swee Ng for expert guidance and local market insight!
Contributed by Career Classroom
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.
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