01.25.2024

Special Edition

Welcome to our COLA Real Estate newsletter, a monthly product of COLAtoday.

Finance

Money talks: 5 (real estate related) financial terms to know + what they mean

We’re breaking down common real estate-related financial jargon. | Photo via The ART of Real Estate

Whether you regularly read financial news as part of your daily digest or it’s one of your 2024 goals to get more invested in your personal finances, understanding common financial terms (and why they’re important) can help you manage your money well, especially when we’re talking about real estate.

To help you get a better understanding of frequently used financial jargon in the real estate market, we’ll give you a quick primer — and a chance to ask any financial questions of your own.

Escrow

Escrow is a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met.

During the homebuying process, the buyer will deposit a specified amount in an escrow account (read: an impartial third party account) that neither party can access until all terms of the purchase contract, i.e. passing an inspection, have been fulfilled + the sale is completed.

An escrow account may also hold money that can be used to pay:

Homeowners insurance
Property taxes
Premiums

Fixed-rate vs. variable rate

A fixed-rate mortgage is a type of loan that has a fixed interest rate. Read: If interest rates rise, homeowners with a fixed-rate mortgage don’t have to worry about their payments rising.

However, if interest rates fall, the homeowner could be locked into a more expensive mortgage.

A variable interest rate is an interest rate on a loan that fluctuates over time because it is based on an underlying benchmark interest rate (that depends on the type of loan) that changes periodically. If the interest rate declines, the borrower’s interest payments will also go down.

Equity

Equity represents a property’s current market value minus any amount still owed on the mortgage.

The more a person pays down the mortgage balance and the more the property appreciates over time, the more equity they have in the property.

Pre-approval letter

The process of pre-approval determines how much money you will be eligible to borrow before you apply for a loan. A pre-approval letter assures home sellers that you can be granted a loan when needed.

Asked

What questions about real estate and finance do you want answered?

Let us know, and we’ll pass your questions along to the experts for answers.

We're myth-busting your mortgage mysteries

Featured listings

4 homes under $400,000

Beautiful, updated home nestled in quiet Murraywood | 4 BD, 3 BA | $299,900 | Zoned for award-winning Lexington/Richland 5 schools, this charming home boasts updates including all new paint, flooring, and fixtures, plus a main-floor primary suite and fully-fenced yard.
Dreamy bungalow in sought-after Rosewood | 2 BD, 2 BA | $325,000 | This fully-renovated gem features a spa-like primary bath complemented by a fully-renovated kitchen and sits on a corner lot with a privacy fenced-in backyard, a back patio, and a brick firepit.
Newly renovated tri-level home in Woodland Hills neighborhood | 4 BD, 2 BA | $317,000 | Also zoned for award-winning Lexington/Richland 5 schools, this new-to-market home features a formal living room and open dining/kitchen with hardwood floors and three upstairs bedrooms, plus elevated views from the kitchen + family room looking out over the extra large fully-fenced backyard.
One-of-a-kind urban oasis in the heart of downtown | 3 BD, 3 BA | $388,000 | With a design that features upgraded appliances, stunning 22-ft. ceilings in the living and dining room, and an open-air loft-style third bedroom, this industrial contemporary townhouse embodies the perfect fusion of modern sophistication + luxury living. Bonus: The seller is offering $3,000 in seller-paid closing costs.

Development

Rockaway Athletic Club to temporarily close

Rockaway’s pimento cheeseburger is a hometown favorite. | Photo via Rockaway Athletic Club

Rockaway Athletic Club, a long-standing Rosewood favorite known for its pimento cheeseburgers and laid-back neighborhood feel, was set to close on Sunday, Jan. 21 — before shutting its doors three days earlier than expected.

The property, acquired by Cason Development Group + Baker Commercial Properties, is poised for redevelopment, though specifics remain unclear.

Since opening in 1982 by Paul and Forrest Whitlark, Rockaway’s has grown into a beloved local haunt, expanding from its original space to occupy a larger area on the corner of Howard Street and Rosewood Drive.

After a fire in 2002, the bar was rebuilt and continued to gain recognition, including accolades for its famous pimento cheeseburger, included on Experience Columbia’s Pimento Cheese Passport.

Its unassuming exterior with a signless brick facade has become a familiar sight to locals, hosting events like the Hat Contest during the Kentucky Derby and trivia nights.

Stay tuned for updates to see how this local landmark will evolve.

News Notes

Real Estate

In 2023, higher mortgage rates, confusion over home price headlines, and a lack of homes for sale created some challenges for buyers + sellers looking to make a move. Here’s what’s on the horizon for the new year, according to local mortgage banker Resource Financial Services, Inc.

Finance

If you’re planning to buy your first home, then you’re probably focused on saving for the costs involved in such a big purchase (read: a down payment). If you’re intimidated by how much you need to save for that, it may be because you believe you must put 20% down. The good news? That doesn’t necessarily have to be the case. Here’s why.

Home

Amidst your personal growth and wellness resolutions, have you considered your goals as a homeowner? Here’s the 10 resolutions we’re committing to this year.

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The Wrap

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