OTHER IMPORTANT TERMS TO KNOW
*Homeowner’s Association:
A Homeowner's Association (HOA) is an organization that manages and governs a residential community or housing development. It is responsible for maintaining the community's standards, rules, and regulations. The HOA collects fees or assessments from homeowners to fund services and amenities such as landscaping, security, and maintenance of common areas.
*Mello Roos Taxes:
Mello-Roos taxes are special assessments (in addition to your regular property taxes) levied on properties within designated community districts in California. These taxes are generally used to finance public infrastructure projects and improvements, such as schools, roads, parks, and utilities, within the district.
Private Transfer Fee:
A private transfer fee, also known as a transfer fee covenant or resale fee, refers to a fee that is imposed on the transfer or sale of ownership of a property. It is typically a contractual obligation created by the original developer or homeowner's association (HOA) and recorded in the property's deed or a separate agreement. Not all properties have Private Transfer fees.
*Solar Liens:
A solar lien, also known as a solar panel lien or a solar energy system lien, is a legal claim or encumbrance placed on a property to secure financing for the installation or lease of a solar energy system. It is typically used when homeowners or businesses opt for solar panel installations but do not have the immediate funds to cover the upfront costs. A Solar Lien can typically be transferred to a new homeowner at time of sale if the new homeowner meets the Solar Lien company criteria for transfer.
Home Utilities:
Expenses you pay for in addition to your mortgage loan. For example; Gas, Electric, Water, Sewer, Garbage, Cable, Internet, etc.
Home Warranty:
Unlike Homeowners Insurance, which is required on most mortgage loans, a Home Warranty is similar to a car warranty and is optional. A Home Warranty is designed to offer homeowners protection against unexpected breakdowns or malfunctions after the purchase of a home. When a homeowner purchases a home warranty, they pay an annual or monthly fee to the warranty provider. In return, the provider agrees to cover the repair or some of the replacement costs of specified items, such as HVAC systems, plumbing, electrical systems, kitchen appliances, and more. The coverage may vary depending on the specific plan and provider chosen.
*Homeowners Insurance:
Lenders often require homeowners’ insurance as a condition for granting a mortgage loan. Think of Homeowners Insurance like car insurance and is for major repair claims. It is designed to help homeowners recover from unexpected events that may cause damage to their home or result in the loss of personal possessions. Homeowners insurance policies can vary in terms of coverage limits, deductibles, and exclusions.
*Flood Insurance or Fire Insurance:
Depending on the area you are purchasing in, the Lender may require you to have additional types of Homeowners Insurance (also known as Hazard Insurance), for example, if you are buying a property in a High Flood or Fire area.
*Private Mortgage Insurance (PMI) or Mortgage Insurance (MI):
PMI or MI is an additional cost that borrowers pay on top of their monthly mortgage payments. The premium for PMI is typically added to the monthly mortgage payment or paid as a lump sum upfront. PMI or MI is a type of insurance that protects lenders in case a borrower defaults on their mortgage loan. PMI is typically required by lenders when the borrower makes a down payment of less than 20% of the home's purchase price.
*Lender or Seller Credits:
Lender or seller credits are financial incentives offered by either the lender or the seller of a property to the buyer. These credits are typically provided as a means to assist the buyer with closing costs or to offset certain expenses associated with the purchase transaction. However, it's important for buyers to carefully consider the terms and conditions associated with these credits. For example, the lender or seller may have limitations on the maximum amount of credits allowed, and there may be implications for the purchase price or interest rate.
*Gift Funds:
Gift funds refer to money or assets that are given to a homebuyer by a family member, relative, or sometimes a close friend to assist with the purchase of a home. These funds are typically provided as a gift, with no expectation of repayment. Lenders typically have specific guidelines regarding the use of gift funds. These guidelines may specify who can provide the gift (usually a family member or close relative), the maximum amount allowed, and any limitations on the source of the gift funds. Some lenders may require that the buyer contributes a certain percentage of the down payment or closing costs from their own funds.
*Your Income, Cash Deposits, Spending Money, Using Credit:
Keep in close communication with your Lender and Real Estate professional about changes in your income, work hours, etc. Make sure the only deposits going in to your account are deposits you have already reported to your Lender as this could affect your loan amount. DO NOT spend large amounts of money or use credit without consulting with your lender first!
* THESE ITEMS MAY EFFECT YOUR LOAN AMOUNT AND MONTHLY MORTGAGE PAYMENT. CHECK WITH YOUR LENDER ABOUT THESE.