10 Real Estate Terms to Understand Before You Buy a Home in Alaska
One of the biggest purchases you will likely ever make is your home in Alaska. Throughout the entire process—from getting pre-approved to the home closing—it's important to know exactly what you are getting into and what each and every term you hear means.
As your real estate experts in Anchorage, Eagle River, Fairbanks, Palmer, North Pole, Wasilla and beyond, Madden Real Estate is here to help you make the best decisions as a homebuyer and explain every step of the way!
Below are ten real estate terms you should understand as a buyer in Alaska:
This term refers to the agreement to terms on the offer made on a home. Once an offer has been accepted, both the buyer and the seller are under contract. Should you decide to back out, you may face losing your deposit or earnest money.
This term stands for Annual Percentage Rate and refers to the interest rate associated with your mortgage loan in Alaska.
Once you've decided to purchase a home in Alaska, your lender will want to know the value of the property to avoid providing a loan for more than it is worth. The appraisal is the process through which the value is determined.
Many homebuyers in Anchorage, Fairbanks, Eagle River, Palmer, Wasilla and the surrounding areas are not familiar with closing costs. These refer to the fees you pay as part of the buying process for loan origination, real estate agents, title, appraisal, escrow, and credit check. At times, these can be negotiated to be paid in full or in part by the seller.
If certain terms are not met, a contingency is an item in the contract that allows you a way out of making the purchase.
In order to show the seller that you are serious about making the purchase, you will often pay earnest money as you enter into the agreement to buy. The remainder of what is owed on the home is paid at closing.
Large purchases typically involve a third party to handle the funds. Your money will be held in escrow to show the seller that it is available and you are ready to make the purchase.
Stands for Debt-to-Income Ratio. Prior to buying a home, your Alaska lender will determine your eligibility for a mortgage— considering factors like this one which can be calculated by weighing your monthly debts against your monthly income.
Stands for Private Mortgage Insurance. Should you decide to put down less than 20 percent on a new home in Alaska, you will be required to pay this monthly as a security measure for the loan.
This refers to the indication of ownership on a home in Anchorage, Fairbanks, Eagle River, Palmer, North Pole, Wasilla and the surrounding areas. It is typically recorded on a deed.
Do not hesitate to reach out with any questions you have about buying a home in Alaska! We are here to help!