As you move through the process of finalizing your mortgage for a condo purchase, you may encounter unfamiliar words.
Here are some common terms and what they mean:
- Clear-to-close letter: A letter stating that all the requirements of the purchase agreement have been satisfied, such as paying off all tax liens.
- Closing costs: The costs to complete the home purchase transaction, such as appraisal, deed preparation, recording fees and title search fees.
- Closing disclosure form: A final document the lender issues right before closing that states the final loan terms.
- Earnest money deposit: An upfront cash payment you put down with your offer as a sign of good faith that you will follow through on the contract to purchase a home.
- Escrow account: The place where the earnest money deposit is held. A party other than the buyer or seller usually holds these accounts.
- Loan estimate form: A form that your lender gives you shortly after the underwriting process starts that will estimate your monthly payments, closing costs and other fees.
- Mortgage commitment letter: A letter from a lender stating that you have been approved for a loan.
- Tax lien: A demand by a government entity for past taxes owed. It must be paid by the seller before you can take ownership of the condo.
- Title search: A search of records for the ownership and any tax liens for the condo you wish to buy.
- Getting a mortgage pre-qualification or pre-approval for a condo purchase
- How to hunt for a condo to buy
- How to assess your financial readiness to buy a condo
- 10 terms to know before buying a condo
- Buying a home in 10 steps