If you are preparing to enter the mysterious world of real estate, you will need to know and understand the property jargon, and for someone who knows nothing of this, the whole buying experience can be a bit hit and miss, and you’ll end up not really knowing what’s going on.
For the beginners, here is a list of 5 terms you will encounter, along with their meanings.
The technical term for a loan used to buy property, and unless you happen to be rich, you will require a mortgage to buy your first property. The financial institution that lends you the money is referred to as the mortgage lender, while you, the customer, is known as the borrower.
The official document that certifies you as the owner of the property is called the title deeds. This document also details the precise area and perimeters of the land, and the deeds can be used as collateral for a loan with most banks, providing there are no outstanding mortgages on the property. Of course, if you default on the loan, the bank takes possession of the land, which would then be offered up by auction.
This refers to a mortgage, and if you are about to enter into discussions with a builder, you should first apply for pre-qualification for a mortgage. This basically tells you, and the builder, that you are able to obtain the required loan, and without this, a builder would be reluctant to go any further than initial discussions.
By applying for a prequalified mortgage, you are not actually entering into an agreement, rather the bank is saying that, in the event you do wish to borrow that amount of money, they are prepared to lend. It acts as a guarantee for the builder that you can, in fact, go ahead with the purchase.
While we all understand the word tax, if you have never bought land before, you might not know that you are liable for taxation. Governments do not pass up any opportunity to levy the population, and land transfer is just one of those times.
If you are buying and selling real estate as a business, then expect to pay property taxes at a higher rate that someone who is merely upgrading their home.
These are things like legal charges, government inspections and approvals, and many builders will include this in their initial pricing, which means there are no hidden charges. A novice might not be aware that there will be other costs further down the line and may not budget for that, and when the keys are handed over, they receive a nasty shock in the form of a bill.
The property business can seem a little daunting, especially for a first time buyer, and by using a modern contractor who offers a comprehensive service with no hidden charges, the experience will be a pleasant one.