Home buying involves a lot of specialized terminology. Here are some common terms you might encounter:

1. Down Payment: The initial payment made when purchasing a home, typically a percentage of the total purchase price.
2. Mortgage: A loan used to purchase real estate, with the property serving as collateral for the loan.
3. Interest Rate: The percentage of the loan amount charged by the lender for the use of their money.
4. Principal: The amount of money borrowed, excluding interest.
5. Closing Costs: Fees associated with the purchase of a home, such as loan origination fees, title insurance, and appraisal fees.
6. Escrow: A neutral third party that holds documents and funds during the home buying process until all conditions of the sale are met.
7. Appraisal: An evaluation of the property’s value conducted by a licensed appraiser.
8. Home Inspection: A thorough examination of the property’s condition, typically conducted by a professional inspector.
9. HOA (Homeowners Association): An organization that sets and enforces rules and regulations for a community or development.
10. PMI (Private Mortgage Insurance): Insurance required by lenders for borrowers who put down less than 20% on a conventional loan.
11. Pre-approval: A preliminary approval for a mortgage loan, based on a lender’s evaluation of the borrower’s financial situation.
12. Fixed-rate Mortgage: A mortgage with an interest rate that remains constant for the entire term of the loan.
13. Adjustable-Rate Mortgage (ARM): A mortgage with an interest rate that can change periodically based on market conditions.
14. Title Insurance: Insurance that protects the buyer and lender against any defects in the title of the property.
15. Closing Disclosure: A document provided to the borrower at least three days before closing that outlines all final terms and costs of the mortgage loan.
16. Earnest Money: A deposit made by the buyer to demonstrate their seriousness about purchasing the property.
17. Closing: The final step in the home buying process, where ownership of the property is transferred from the seller to the buyer.

Understanding these terms will help you navigate the home buying process more effectively.