Real estate terms every homebuyer should know

An estimate of a home's market value completed by a licensed professional.

Fees and expenses paid when you finalize the purchase of a home. These may include lender fees, title charges, taxes, insurance and other costs associated with the transaction.

The portion of the home's purchase price that you pay upfront rather than finance through a mortgage. Buyers with low-to-moderate incomes may qualify for down payment assistance, also called homebuyer assistance, which can help reduce the amount of cash needed to purchase a home.

A neutral account used to hold money or important documents until certain conditions of the home purchase have been met. After closing, an escrow account may also be used to collect and pay property taxes and homeowners insurance.

The difference between your home's value and what you still owe on your mortgage. As you make mortgage payments and your home's value increases, you build equity. Over time, equity can help build wealth and may be used to finance home improvements, cover major and unexpected expenses, or support other financial goals, such as education or retirement.

A loan used to purchase a home. You'll repay the loan over time through monthly payments that typically include principal and interest, and may also include property taxes and homeowners insurance. Credit scores significantly impact a buyer’s ability to qualify for a mortgage.

A lender's estimate of how much you may be able to borrow based on your income, assets, debts and credit history.

The amount of money you borrow to purchase a home, before interest is added. As you make mortgage payments, your principal balance decreases.

The legal right to own a property. Before closing, a title search helps confirm that ownership is clear and that there are no outstanding claims or liens that could affect the sale.