It is an amount of money that the buyer invests from their own funds to purchase the house. It is usually represented as a percentage of the total purchase price. The minimum required can be from 3%. It depends on the program. The FHA, for example, requires a minimum of 3.5%.


They are additional costs to the initial fee that are paid to carry out the mortgage transaction. All types of transactions have Closing Costs, whether it is a purchase, refinancing or sale of a home.
These costs may include financial charges, prepaid, reserves and payments to third parties, such as: appraisers, lawyers, title company, etc. This varies depending on the state where the transaction is made.


It is the money the buyer has left after paying the down payment and closing costs. Reserves protect the buyer in the event of a financial emergency, such as: loss of job, illness, etc. On some occasions, the bank may require the client to have reserves. Some ask for 3, 6 or even 12 months.
Reserves are measured in months. One month of reserves is equal to the monthly amount that will be left paying for the house. If the monthly payment on the house will be $2,000 and they ask for 3 months of reserves, it means that $6,000 must remain in the bank.


It is the loan that is acquired to pay for a home for a specific amount at a specific interest rate where the property directly supports this debt.
When talking about the Mortgage Monthly Payment, it is the monthly fee that the client will pay to the Mortgage Bank during the life of the loan. Generally this payment is made up of:

  • Principal (payment that goes towards the debt)
  • Interest
  • Taxes
  • Hazard Insurance

In some cases, mandatory flood insurance or Homeowners Associations are added to this monthly payment, as in the case of condos or townhouses.


Many lenders allow part of the buyer’s funds to come from gifts. These gifts are donations from the buyer’s family. Be very careful that, as the word indicates, they are gifts and not loans to buy the house.

Loan Officer

It is a Licensed person who represents a financial institution or a Mortgage Broker.


It is a report created by an independent person licensed by the state to prepare estimates of the value of properties in the market.

Home Inspector

An independent, state-licensed individual who examines the visible and accessible aspects of the home’s structure, plumbing, heating, cooling, electrical and general condition. This person determines if repairs or maintenance are necessary. There are inspections that have additional costs, but they are done to determine if there is an oil tank or contamination, inspection of the dirty water tank, testing of the well water, or inspection to see if there is or was an infestation of carpenter ants, among others.

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