When you are ready to purchase your first home, you are probably excited about actually getting out there and seeing what’s for sale in your preferred area. You also might be a bit confused by all the weird real estate terminology that you keep hearing. Realtors and other related professionals tend to use some of the following terms, and this is what they really mean.

We all have heard the word escrow, but it is quite possible that a first-time home buyer won’t really understand what this means. Technically, escrow refers to an account that is opened by a third party once the seller and buyer agree on a sales price for a house. An escrow company will hold a check from the buyer in an escrow account, and this basically declares that the seller and buyer are serious about making the deal. Often, the period of time between opening the escrow account and the day you take possession of your new home is simply known as being „in escrow.“

Once you get a loan and close escrow and take possession, now your main focus will be paying off your mortgage and caring for your home. There are quite a few types of mortgages, and you will hear the words „fixed,“ „ARM“ and „adjustable“ thrown around. A fixed mortgage just means that the percentage of interest you pay will never change. An adjustable-rate mortgage or ARM usually is fixed for a few years, and then the level of interest can go up or down. This means your monthly payments can go up or down and sometimes substantially.

The buyer and seller also will have to pay for closing costs, but what does this entail? The costs include paying for an appraisal and also paying for title insurance, both of which are covered by the buyer. There are plenty of other little fees and documents and notary services to pay for along the way, but the biggest cost of all is the commission that gets paid to the realtors. However, as the buyer, you can breathe a sigh of relief because that typically is paid by the seller.

The appraisal is a closing cost that the seller pays, and this is something you have done in order to secure your loan. An appraiser comes and looks at the home and decides what the house is worth based upon the home’s condition and local comps. If your appraiser says that the house is worth less than the purchase price, it is possible that the bank will not lend you the money. The inspections also generally are paid for by the buyer, and you absolutely want to hire a great inspector and have a very thorough inspection done on the property. Even if you are buying a home that has just been built, you need to have it inspected.

These are just a few of the words that you will hear during your home-buying experience. If you are purchasing real estate in Texas Hill Country, the staff at Nixon Real Estate can explain just about any typical real estate term and help throughout the escrow process. You can find great homes for sale in Fredericksburg, Kerrville, San Antonio and other nearby towns, so call Nixon Real Estate and get started.

Pammy McGrath loves reading real estate blogs. If you are looking for licensed Texas Hill Country real estate agents, or to discover homes for sale in Fredericksburg TX, please go to the Nixon Real Estate site now.