Real Estate terminologies every home buyer should know

If you were told to reach a place the direction of which is not known to you, do you think you will reach on time, No right, the same is the case with Real Estate if you are unaware of the terminologies you are most likely to get confused during the buying process and might regret about your decision later.

Purchasing a house is not exactly a cakewalk for many people, especially if home loans are into action. Many terminologies perplex a homebuyer to the extent that he may end up making a wrong decision about buying a home, simply because they are not aware of the terminologies. The property developers in Bangalore are offering apartments that are equipped with high-end facilities along with home loan assistance.

If you are aware of the terminologies that go around in the Real Estate industry, you prevent yourself from getting cheated or getting fooled by the agents or even the sellers. Fraud cases are more common in North India, especially in Delhi NCR, that does not mean you may not find credible developers here. 

There is a hike in the demand for the ready-to-move house in Faridabad because of the pandemic and with credible developers like MVN Infrastructure you won’t have to worry about the quality of the apartments.

Some Basic Terminologies for the Homebuyers

#1. Buyer’s agent

A buyer’s agent is simply a real estate agent. The role of this agent is to help homebuyers avail an ideal house or flat. In response, the homebuyer pays the  Real Estate agent a percentage of the sale as fees. A credible agent will always lead you to the best builders in Bangalore so that you get exactly what you desire.

#2. Listing agent 

A listing agent is an agent acting for the seller of a particular apartment. Their job is to find the buyers for the particular property. A listing agent in this modern-day and tech-oriented world may also be online portals where sellers can list a house for sale. 

#3. Preapproval letter

A preapproval letter is a document provided to you by a financial institution giving you an estimate of the amount they will be able to lend you. This letter is usually issued after one applies for a home loan. This letter, in a way, gives assurity to buyers that they will be able to avail of the loan.

#4.Acceptance

Giving consent to the terms of an offer, thereby creating a contract. Once the seller signs on to your purchase offer, you're under contract for the sale of the house, and neither of you can back off without facing consequences—in the buyer’s case, likely losing your earnest money deposit(EMD) and, in the seller's case, a potential lawsuit. While looking for apartments for sale in Gurgaon, clarify the terms of the contract in advance before giving the acceptance.

#5. Annual Percentage Rate (APR)

A yearly interest rate that encompasses upfront fees and costs paid to avail the loan, calculated by clasping the average compound interest rate over the term of the loan. Mortgage lenders are required to disclose the APR so that buyers can more accurately compare the actual cost of diverse loans with diverse fees.

#6. Floating rate of interest

Contradictory to the fixed rate of interest, the floating rate of interest simply means the interest rates on a home loan may differ from time to time during the tenure of a housing loan. These changes are following interest rates that are prevailing in the market.

#7. Margin 

With apropos to real estate, the term ‘margin’ is somehow similar to the term ‘down payment’. In essence, the margin is the amount that comes out after a difference between the total value of the property and the total loan amount that the financial institution provides towards the purchase of this property. 

#8. Equated Monthly Instalments (EMI)

You all are aware with EMIs, EMI is the monthly payments that need to be paid by a buyer or borrower towards the loan obtained by them. The EMIs start after the loan is disbursed and comprises of interest and principal.

#9. Earnest Money Deposit (EMD)

Partial payment or deposit exemplifying commitment in a contractual relationship, and often made in real estate transactions at the time of creating the purchase offer. The remnant of the payment is due on the closing date. Usually, The seller keeps the earnest amount if the homebuyer fails to make timely payment in full or any other factor that forces the breach of the contract.

#10. Prepayment Penalty

A fee foisted on a homebuyer who pays off a loan (usually a mortgage) before its due date. Lenders inflict this kind of fee to encourage buyers to hold debt and continue paying interest on it—for the whole term of the loan. Builders and developers in Bangalore usually do not impose a prepayment penalty as they consider the sentiments of the homebuyers.

#11. Private Mortgage Insurance

An Insurance that square accounts with a mortgage lender if the homebuyer defaults on the loan and the repossession sale price are lower than the amount owed to the lender (the mortgage plus the costs of the sale). It becomes mandatory for a home buyer who has paid less than a 20% down payment to purchase private mortgage insurance, commonly referred to as PMI.