A recent survey from GOBankingRates found that only a quarter of Americans feel they have a good understanding of the home buying process. Pre-approval and closing costs are the most confusing aspects. Pre-approval refers to mortgages. After conducting research, the lender can issue pre-approval for up to a certain amount of money. Note that there are a number of different types of mortgages: both conforming and nonconforming loans, government-insured loans from various agencies, etc. Mortgages can also be fixed-rate or adjustable-rate. Closing costs are additional fees that can add 3-6% to a home’s cost. Loan application fees, property tax and appraisal fees, and real estate commissions are a few types of closing costs.
- If you aren’t paying all cash for your home you are going to have to take out a mortgage.
- You will need to be pre-approved for a mortgage as that will let sellers know you have a credit line.
- There are many different types of mortgages such as conventional ones, conforming ones and nonconforming ones.
“Of the 1,000 people across the country who were surveyed, only 26% felt they understood the homebuying process well.”