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Things That I Need to Know When Buying an East Bay Home


Buying a home is an exciting milestone, but the journey can be filled with unfamiliar terms and jargon that may leave you feeling overwhelmed. To empower you on this journey, we've compiled a comprehensive list of essential real estate and mortgage terms that every homebuyer and seller should know. Understanding these terms will not only enhance your conversations with mortgage loan officers and realtors but also enable you to make informed decisions throughout the home-buying process.


A mortgage is a loan specifically designed to finance the purchase of a home. There are various types of mortgages available to accommodate different buyer needs. Conventional financing is the most common type, typically requiring a minimum down payment of 3%. Jumbo loans, on the other hand, are larger and come with stricter requirements. FHA financing, backed by the federal government, offers opportunities for buyers with credit or income concerns, while VA financing is reserved for military veterans and active-duty members, offering benefits such as zero down payment and potentially lower income requirements.

Mortgage Loan Officer (MLO)

Your mortgage loan officer is your primary contact throughout the loan application process. They act as your advocate within the lending organization, guiding you through the selection of the best loan product and assisting you in compiling the necessary documentation for approval.


The underwriter is responsible for evaluating your loan application and financial information to determine whether you meet the lender's requirements for loan approval.

Pre-Approval Letter

A pre-approval letter from your lender indicates that you have passed the initial steps of the loan qualification process, providing assurance to sellers that you are a serious and qualified buyer.

Debt to Income (DTI)

DTI is a ratio used to assess your ability to manage monthly mortgage payments relative to your gross monthly income. It considers all your monthly debt obligations, including existing loans, credit card payments, and more.

Loan to Value (LTV)

LTV is the ratio of your loan amount to the appraised value of the home. Lower LTV ratios may qualify you for better interest rates and terms, incentivizing larger down payments.

Mortgage Insurance

Mortgage insurance is required on some loans to protect lenders against losses in the event of borrower default. It is typically required on FHA loans and conventional loans with down payments below 20%.


PITI encompasses the principal, interest, taxes, and insurance components of your monthly mortgage payment, providing a comprehensive view of your housing expenses.

Impound Accounts

Impound accounts, also known as escrow accounts, are used to manage property tax and insurance payments on behalf of the borrower, typically required for loans with LTVs above 80%.


Refinancing involves replacing your existing mortgage with a new loan, often to secure better terms, lower payments, or access equity.

Credit Score

Your credit score is a numerical representation of your creditworthiness, influencing loan eligibility and interest rates. It is based on information from credit reporting agencies and helps lenders assess risk.

Closing Cost

Closing costs are upfront fees associated with buying a home and securing a mortgage loan. They include various expenses such as appraisal fees, title insurance, and attorney fees.


The downpayment is the initial cash contribution made towards the purchase price of the home, often expressed as a percentage of the total purchase price.

Title & Escrow

Title insurance protects against unforeseen liens on the property, while escrow facilitates the transfer of funds and documents during the home-buying process.

Earnest Money Deposit (EMD) or Deposit

The earnest money deposit is an initial deposit made by the buyer during escrow to demonstrate commitment to the purchase agreement.


Home inspections assess the condition of the property and are typically conducted by certified professionals hired by the buyer.


An appraisal provides an estimate of the home's value, influencing the lender's decision to fund the loan.


Contingencies are contractual conditions that must be met for the transaction to proceed, allowing for negotiations or contract dissolution if conditions are not met.

With this knowledge in hand, you're well-equipped to navigate the home-buying process with confidence. Armed with a clear understanding of these terms, you can engage in meaningful conversations with real estate professionals and make informed decisions every step of the way. Happy house hunting!

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