You can build equity in three ways. First (and easiest) is from market appreciation. Second, when making your monthly mortgage payment, try to send a little bit more. This will go directly to the principal of the loan, rather than the interest.

Be sure your lender knows to put the extra toward principal, and not the next month’s payment. Even an extra $50 per month can quickly build equity, as well as knock years off of your loan. The third way to build equity into your house is to make improvements.

There are a variety of ways to remodel and make positive changes to the interior and exterior of your home.

One of the best ways is to add square footage/living space.

A loan commitment letter is given by the lender to the borrower stating the terms under which the lender has agreed to the loan.

This is often considered “loan approval” which will allow the buyer to proceed with consummation of the real estate purchase.

Also known as “hazard insurance”, homeowners insurance covers losses caused by fire, hailstorms, or other casualty on the property. Lenders usually require the buyer to have insurance in an amount equal to or greater than the loan amount.

Flood insurance is required by the lender if the property is in a flood hazard area/flood plain. Condominiums and townhomes are somewhat different, as certain items may be covered by the homeowner’s association fees.