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Ultimate Guide to Real Estate

hadiya Arshad
Lenovo Many GEOs

What is Real Estate?

Real estate can be defined as a class of property that includes land, and anything permanently attached to the land. This includes buildings, houses, apartments, and even commercial businesses. If you are looking for an investment property to buy or rent out, then you should have knowledge about real estate. Here are some other terms that will probably come up during your search for a good investment property:

Mortgage – A loan that is paid back over time with monthly payments (principal + interest). It is secured by the title to your house/property. The amount of money you can borrow from a bank depends on 3 factors: Your credit score (usually in the range of 620-760), your income compared to debt ratio (also known as your DTI), and how much down payment you put down when applying for the mortgage. Lending standards have tightened since 2008 due to strict guidelines set forth by Congress requiring banks to reduce their risk by making sure borrowers can pay back the mortgage if it was reset today at current rates with no change in household income or employment status. The value of your home can change significantly over time as well, so it is important to stay on top of your mortgage payments.

Down Payment – The amount of money you put down when applying for a mortgage. You need to have at least 5% down in order to avoid paying private mortgage insurance (PMI). How much you put down will affect how much interest rate you get, and how much house/property you can afford. The more money you have for a down payment, the better! Just remember that if your lender does not pre-approve your loan in full before going out and buying a home, then they might not approve the loan at all later on because of what is called “cash-out refinancing”. This means that if the purchase price of your home is less than their appraisal price on it later on, they might not lend any additional funds to pay off other debt (i.e., credit cards), or use for renovations/additions to increase the value of the property.

Appraisal – An estimate of the value of your home by a third-party professional. This is used to determine how much money you can borrow from a bank and/or how much you can get when selling your home. It is usually performed by an appraiser chosen by your lender, although sometimes lenders will let you choose an appraiser if they have one that they like that isn’t as expensive. Appraisers can be biased, so it’s important for them to be independent when performing their job in order to provide a fair unbiased opinion on the value of something.

Rent-to-Own – A contract between two parties where the buyer rents property from the seller until a future date, at which point ownership of the property is transferred from seller to buyer without requiring any additional payment from either party (i.e. no down payment is required to finalize the deal). It is a good option if you don’t have enough for a down payment on your own, but you still want to get into the market and start building up equity.

Real Estate Agent – A person who assists in buying and selling real estate, usually for a commission. They can help you find properties that might be worth looking at (especially if you are new to the area and don’t know much about it), provide valuable information about local housing prices and trends, give advice throughout negotiations with sellers/buyers/other agents, represent your interests in dealings with sellers/buyers/other agents, help facilitate communication between buyers/sellers through paperwork during closing, etc. You can also hire them yourself without going through a brokerage company if one exists in your area.

I hope you had a good time reading my post. I really enjoyed writing it. It’s important to know what you’re getting into when it comes to real estate, and the more knowledge you have the better off you’ll be.

Also read Ultimate Guide to Real Estate

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