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It’s an exciting time when you start the process of buying or building a new home, but all the unfamiliar lingo can leave you feeling overwhelmed. Fear not! We’ve rounded up a list of 12 terms you should know to help you feel confident along your journey.

Home Financing terms

Pre-qualification

When you pre-qualify for a home loan, you’re getting a ballpark estimate of what you might be able to borrow, based on information you provide to your lender about your finances. Pre-qualification is a great time to ask questions and learn about all the different mortgage options.

Pre-approval

A pre-approval means a lender has verified your information, checked your credit and pre-approved you for a specific loan amount for up to 90 days. A pre-approval letter from your lender tells the seller you’re a serious buyer and have undergone a more rigorous assessment by the lender compared with pre-qualification.

Get pre-approved

This is when a lender commits to a loan before the borrower finds a property to buy.

Rate Lock

A rate lock protects you from rate increases for a specified period of time during the buying process. It guarantees you are “locked in” for a specific period of time, even if interest rates rise during that period. This can be helpful when the economy fluctuates, and rates change.

Down Payment

The portion of the purchase price that you pay at closing. According to a recent report by the National Association of Realtors, the average down payment in 2021 was 7% for first-time buyers and 17% for repeat buyers, but there are loans that allow for lower down payments. When choosing the percentage, it all depends on what type of mortgage you choose and what your budget is.

Closing Costs

These costs may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed recording fees, and credit report charges. They typically make up about 3% to 6% of the loan amount and are due when you sign your final loan documents. Anticipate paying these costs in addition to your down payment.

Homeowners Insurance

A form of property insurance that covers losses and damages to an individual’s residence, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property. If you get a mortgage, your lender will require you to have homeowners’ insurance before your closing date.

Private Mortgage Insurance (PMI)

PMI is a type of mortgage insurance that may be required by your lender if you obtain a conventional loan and make a down payment of less than 20% of the home’s purchase price. PMI is what protects the lender if you stop making payments on the loan. This isn’t a permanent monthly payment, so once you’ve paid off 20% of your principal or mortgage balance then you can have your lender remove it.

Homebuilding Terms

Home Automation

The integration of different Wi-Fi-enabled smart devices that allow you to automate and remotely control various aspects of your home (and make everyday life a breeze!). A few popular features from the M.Connected Home™ Automation Suite include an advanced thermostat and a smart home hub to control all the smart features from one place.

Home Energy Rating System (HERS)

The Home Energy Rating System (HERS) is the industry standard by which a home’s energy efficiency is measured. The lower the HERS score, the more energy efficient the home is, and the less you’ll pay in energy bills.

Spray Foam Insulation

Spray polyurethane foam is widely used to insulate buildings and seal cracks and gaps, making a building more energy-efficient and comfortable. This type of insulation is known to resist heat transfer extremely well, and it offers a highly effective solution in reducing unwanted air infiltration through cracks, seams, and joints.

Interior Design Finishes

One of the best parts of moving into a new home is choosing the design finishes for tile, cabinets, light fixtures and more. There are various companies that offers beautiful, designer-curated finishes for a simplified way to create your dream home.

Homeowner Orientation

Before you take the keys and move in, you should plan to attend a homeowner orientation where you can ask any remaining questions and we finalize details.

Now that you’ve got the basics down, level up your knowledge with our extended homebuyer glossary. Or you can always reach out to our team of Meritage Homes if you have questions.

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By Trudy Lieberman

Last year Ellin and her husband, both new to Medicare, signed up for a Medicare Advantage plan from Essence Healthcare, a managed care firm based in a St. Louis suburb. She contacted me wanting to share her experiences in choosing a Medicare Advantage plan to cover what the Medicare program does not pay, and agreed to track how the plan paid for services throughout the year — especially the heavily advertised extra benefits such as vision and dental touted in TV ads during this season’s open enrollment period.

Her observations confirmed what I had learned over decades of covering health insurance for seniors. “Many agents do not know their own product very well,” she said. “They do not share the downsides of what they are selling because they do not know.” She found that the websites of the State Health Insurance Assistance Program (SHIP), set up in each state by the federal government to help seniors choose Medicare plans, did not offer the necessary caveats for choosing Medigap and  Advantage plans, “which a discerning consumer would like to know.” As for the foreign travel benefit on the MA plans, it “is pretty vague in terms of what it would actually cover if you are injured in the jungle in the back country of Surinam,” she said. She also questioned the usefulness of a $95 quarterly allowance to buy health-related and personal items from the company’s catalogue. “The offerings are pretty limited,” she said, adding that there are only so many bandages and vitamins you need to buy. Some of her friends had signed up for specific plans because of those coupon offerings, she told me. “Some of these folks are fairly sophisticated otherwise, but freebies are compelling and cause people to overlook the big picture.”

Ellin and her husband did look at the big picture, and quickly learned how limited the dental benefits really are with some Medicare Advantage plans. The dental PPO her plan used gave “inaccurate information when I called them, and their network was pretty skimpy — fine for regular check-ups, but for anything beyond that, there are very limited choices in the network and there is a $1,200 annual spending maximum,” she explained.  That would have covered only half the cost of the oral surgery with implants her husband needed. Luckily, he was able to convert his former employer’s dental plan into an individual dental policy before the employer plan ended last December, which eventually covered the bill. Last February, Ellin told me she would not choose the Essence dental option again; instead she’d opt for the company’s basic Advantage plan, without any dental coverage.

The couple’s experience offers red flags for the thousands of seniors likely to sign up for such Medicare Advantage plans this year, lured by the promise of extra goodies not offered by traditional Medicare and Medigap plans. Next year, 5,400 Medicare Advantage plans will be offered to seniors, which is 10% more than this year, said Adam Barnhart, a principal and consulting  actuary at Milliman. “It’s an exciting time for Medicare Advantage,” he said. “There’s a lot of interest in it.”

It’s not hard to see why. Much of that interest is the result of the federal government’s strategy to overpay the plans — at least by 4% and possibly more — than it costs to care for the same person in traditional Medicare, according to Dr. Robert Berenson, a senior fellow at the Urban Institute. A few years ago, Advantage plans were paid 18% more by the federal government than it cost for the same person in the traditional program. That largess has allowed them to attract seniors with extra benefits that have enticed people like Ellin to the plans.

Those extra payments, plus a Trump administration rule allowing plans to offer goodies like free meals, free aspirins, dental and hearing benefits, and rides to doctors’ offices, have created a decided market advantage for these privately administered plans over traditional Medicare, with 42% of all beneficiaries like Ellin now in Medicare Advantage plans. That uneven playing field is at the crux of the current debate in Congress whether to add dental, vision, and hearing benefits to the traditional Medicare benefit. Adding such benefits to traditional Medicare would help level the playing field, since beneficiaries would be able to have the same important benefits as people in Advantage plans. And keeping people in the traditional program will help keep it more robust and sustainable over the long run. In the Build Back Better bill just sent to the Senate, only the hearing provisions remain.

Because advertising for Medicare Advantage plans is so ubiquitous compared to the traditional Medicare program, I wanted to know if seniors could actually make a good, informed choice. I did some shopping in New York City to find out. In the last few weeks I have received 25 mailers from insurers and groups like the Medicare Advocates in South Jordan, Utah, offering a “no cost review of coverage,” while MedicareInsurance.com urged me to return a card with my phone number to its National Processing Center in Daytona Beach, Florida. Agents prospecting for names, I figured. The shopping task was overwhelming even for someone like me who knows the program.

To create a sample of Advantage plans, I used a list of policies obtained through the Montefiore Hospital website, which nudged its patients to investigate MA plans offered through eHealth, a private online health insurance marketplace. Montefiore isn’t alone in pitching MA products. Mount Sinai Health System in New York City and the large Sutter Health system in California are doing the same, presumably to attract new patients to their hospitals and other services.

For my shopping trip I investigated 20 plans listed for my ZIP code. Five insurers were selling multiple plans. Aetna offered five; Emblem Health offered six; Empire Blue Cross Blue Shield three; Humana four; and Health First two — way too many for anyone to comprehend or reasonably compare.  

Some plans sported fanciful names that only furthered confusion. How does a shopper know if Emblem Health’s VIP Gold is good, better, or worse than Emblem’s VIP Passport NYC? Or what are the differences among Empire’s MediBlue Select, MediBlue Extra Select, and MediBlue Health Plus? Do the names indicate the real value of these HMO plans, or are they marketing gimmicks to make a plan appear to deliver more value than it actually does? 

I looked at the member ratings for the plans listed in the Medicare Handbook sent to all beneficiaries by the federal government each year. It wasn’t clear what that rating meant and did it differ from the Medicare star ratings (a topic for a future post). I checked with some of my sources and learned that member experience with the plan was one factor that goes into the star ratings and comprises such dimensions as ease of getting care, seeing specialists and getting appointments and care quickly. The handbook for my county noted that the member ratings for the Emblem Health Medicare HMO, which includes Emblem’s VIP Reserve and VIP Passport NYC plans, was 75%. That raises some questions about how the plan was performing. Most of the plans for my county didn’t have stellar ratings. That should prompt shoppers to ask a lot of questions before signing up.

That uneven playing field is at the crux of the current debate in Congress whether to add dental, vision, and hearing benefits to the traditional Medicare benefit. Adding such benefits to traditional Medicare would help level the playing field. In the Build Back Better bill just sent to the Senate, only the hearing provisions remain.

Delving further, I called Emblem Health and a helpful representative tried to explain the differences among plans. I asked about the consumer’s cost for a single crown restoration. The marketing literature suggested the cost would be $125 for a single crown restoration every five years. They typically cost between $1,000 and $3,000 in New York, so this did sound like a bargain. If I wanted more information, the agent suggested consulting the company’s “Evidence of Coverage” document, 252 pages that most buyers are unlikely to read, but it does lay out exactly what you’re getting with the plan. It would take a lot patience and effort to sort through what each plan you’re considering would cover.

A recent survey of Medicare dental benefits by the Kaiser Family Foundation noted that while preventive services offered by Advantage plans are often covered without cost sharing except for annual dollar limits, 50% coinsurance — the share of covered costs the enrollee pays — and caps on the total benefit amount are the norm for more extensive dental services. For instance, you pay half the bill, which is what Ellin and her husband would have paid for his implant work. Barnhart, the Milliman actuary told me, “Because there is no standardization, plans have flexibility to cover any aspect of dental. You can have some plans with very different levels of coverage, even though they say they cover dental.” That makes a shopper’s task nearly impossible.

My little shopping trip underscores the need to standardize the Medicare Advantage market, much the way the Medigap market was standardized in 1991, after that marketplace had run-amok with zillions of plans offering varying benefits. Writing for Consumer Reports at the time, I noted that many companies had several offerings with only slight differences among them, suggesting that standardization would eliminate the confusion buyers faced. It wasn’t long after that advocacy groups and others banned together to pressure Congress into standardizing the policies. Congress has made changes to the Medigap line-up over the years. The end result has been to make some of them less attractive to consumers with the aim of encouraging more of those now in traditional Medicare with a Medigap policy to move to an MA plan.

That was the high water mark of the consumer movement, a few years before former House speaker Newt Gingrich began his effort to let Medicare “wither on the vine.”  There hasn’t been much talk of standardization of Advantage plans, says a Congressional legislative insider who spoke on background. “The consensus has been not to require plans to offer the same benefits,” she told me. Instead, any talk about standardization now revolves around “communicating with beneficiaries and policy proposals around education and marketing materials.” In other words, it seems public policy will continue to promote further the expansion of Advantage plans.

David Lipschutz, associate director of the Center for Medicare Advocacy, says that Medicare Advantage plans today are competing over the “bells and whistles when we should be focusing more on substance like cost-sharing, denial rates and  network adequacy.” For instance, in most of the plans in my sample, the maximum out-of-pocket amount was $7,550. A few companies had a smaller maximum, $6,700, and some had an $11,300 out-of-pocket maximum, which is relevant in some plans that are PPOs. Those are hardly trivial amounts for much of the population these plans target. “Predictions are that 60% of the Medicare population will be in MA plans by 2025, yet Congress is doing nothing to address this imbalance,” Lipschutz said. “They are endorsing the privatization of Medicare.” Proposals in Congress to add dental, vision, and hearing benefits to traditional Medicare would have begun to address this imbalance.  Heavy lobbying against a dental benefit by the nation’s dentists and concerns about cost appears to have killed the prospects for dental and vision benefits. “Cost is a strong limiting factor for dental and vision,” said my Congressional source. “Different members have different funding priorities.”

The Medicare Advantage market is complex and confusing, while promising generous benefits, many of which turn out to be of limited use as Ellin and her husband learned. With seniors confronting such a complex, and sometimes deceptive market, you can see why it’s just easier to let pitchmen like Joe Namath and Danny Glover guide their decisions.

Ellin, my Missouri correspondent, reported she and her husband had decided not to rely on a Medicare Advantage plan for vision or dental benefits after talking to several medical providers in their area about the networks for dental and vision care. Instead, they bought a separate dental plan for both of them from a different carrier and planned to pay out-of-pocket if necessary. They will also pay for vision care out-of-pocket. “The dental and vision plans are tokens,” she concluded. “They are not comprehensive.”

Veteran health care journalist Trudy Lieberman is a contributing editor at the Center for Health Journalism Digital and a regular contributor to the Remaking Health Care column.

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I have been looking to buy a home these last few months, but am getting more and more worried about how to do so safely in the middle of a pandemic. Whenever I see a new place, I have to sign forms about COVID-19, such as if I have traveled anywhere, tested positive recently or know anyone who has.

But my question — are there any responsibilities or rules Realtors must follow? What happens if a real-estate agent I meet tests positive for the virus… will he or she have to tell me? Do they have any timeframe until they must return to the workplace and start showing homes again? I’m sure there are policies around sanitizing and protective gear, and I have seen Realtors wearing masks and wiping down countertops, but I’d appreciate any guidance you have on how to best proceed in these unprecedented times.

Sincerely,

A worried but hopeful homebuyer

Dear worried,

Buying a home can be a stressful and strenuous process even before you factor in the concerns related to the ongoing pandemic. The good news is that the housing industry has digitized much of the home-buying process, in an effort to keep people safe.

For starters, it’s important to know that real-estate agents must abide by local and state ordinances. Some areas have deemed real estate to be an essential service, allowing open houses, home tours and in-person signings to proceed even while stay-at-home orders are in place.

But even then, many real-estate agents are taking even more precautions to keep people safe. The National Association of Realtors recently put out a guide to its members, giving advice about how brokers should handle real-estate showings moving forward. The trade group has urged its members to use virtual showings and to limit in-person activities whenever possible, even when local lawmakers allow for things like open houses.

Many agents are now using 3D technology such as Matterport to picture what a home looks like, which people can use to tour homes and get a feel for them without going in person. Other agents are doing initial consultations over Zoom or FaceTime to limit the amount of in-person interaction they have. Some are even requiring buyers to be pre-qualified for a mortgage before touring a home to make sure they are serious and cut down on casual tours.

“If a buyer is not willing or able to go look at a house I have done a lot of FaceTime-ing of properties to give them an additional perspective, so that if they want to open a particular door or just to ask questions on the ground, I can be able to do that through FaceTime,” said Maggie Wells, a Realtor with Keller Williams based in Lexington, Ky. Indeed, some people have opted to buy homes having only toured them virtually, though understandably that may not be for everyone.

When in-person showings do happen, Realtors should be requiring everyone to wear masks and sanitize any surfaces that may be touched in advance, such as door handles, counter tops and light switches.

Once an offer is made, many agencies can handle much of the closing process digitally as well, though that can vary based on where e-signings are allowed. In cases where an electronic signing is not possible, many agents are coordinating drive-by signings where the process is done in the car rather than by people going into an office.

As for cases where an agent comes into contact with a person who tested positive for COVID-19 or tested positive themselves, those policies can vary from brokerage to brokerage and based on where their practice is located. “Everyone is relying upon the honesty of other people to help mitigate the spread and protect people,” said Dan Galloway, Redfin’s RDFN, +1.35% market manager for the District of Columbia.

The National Association of Realtors has put out a sample plan for firms to use to guide their COVID safety practices. Let’s say the seller has found out they’ve caught COVID-19. If an agent has a confirmed case of COVID-19 (either they tested positive or a client did), the National Association of Realtors first suggests they contact their head of human resources immediately.

The agent in question should self-isolate for the time period recommended by the U.S. Centers for Disease Control and Prevention, and the brokerage should determine whether other staff should do so as well.

The agent is then advised to get the seller’s consent to disclose to any other agent who toured the property within the last 14 days that someone with a confirmed case of COVID-19 resides at the property.

They should also immediately inform their clients of this. However, real-estate professionals need to be mindful of people’s privacy. If the seller didn’t consent to having their identity shared, the agent may not be able to identify the specific property or person involved. And even when they do consent, agents need to be sensitive to their privacy.

In these cases, this information may be communicated via the multiple-listings service so that other brokerages are aware of a positive case. “I have gotten exposure notifications from other brokers [through the multiple-listing services] so I know that many of them do have processes in place,” Galloway said. “And it’s often advertised in the multiple listing service what safety precautions you’re expected to take.”

Moving forward, I suggest you have an in-depth conversation upfront with any agent you’re considering working with to find out what their practices are, not just when touring homes but also at signing. Find out how they communicate COVID cases, both within their office and to their clients. If you are ever concerned that your agent is not taking enough precautions, don’t be afraid to contact their office or end your relationship with them.

Good luck with the rest of your home-buying journey. I hope that you and your family can safely find a new home to call your own soon.

Marketwatch • Contributed

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NEW YORK (AP) — The viral pandemic is accelerating a transformation of America’s holiday shopping season.

Few people showed up at the mall this weekend, with millions of pandemic-wary shoppers staying home to shop online.

The result? Overall holiday sales are projected to rise a slight 0.9% in November and December — and even that modest gain will be due to an explosion in online shopping, according to the research firm eMarketer. It expects online sales to jump nearly 36%, while sales at physical stores fall 4.7%.

The online rush was on fully display Monday, known as Cyber Monday, a day of sales promoted by retailers back in 2005. Once the final numbers are tallied up, this year’s Cyber Monday is projected to become the biggest online shopping day in American history.

Here’s how this holiday shopping season is shaping up:

“BLEAK FRIDAY”

Black Friday, typically the frenzied kick-off of the holiday shopping season, was eerily quiet this year. Health officials had warned shoppers to stay home, and stores followed suit by putting their best deals online to discourage crowds.

Half as many people shopped inside stores this Black Friday than last year, according to retail data company Sensormatic Solutions.

“Black Friday was really Bleak Friday,” says David Bassuk, a member of the retail practice at the consulting firm AlixPartners.

Online was a decidedly different story. Sales hit a record $9 billion on Black Friday — up a sharp 22% from last year, according to Adobe Analytics, which tracks online shopping.

CYBER MONDAY STILL ON TOP

Even though shoppers had access to weeks of online deals, many held out for bargains that they could get only on Cyber Monday, the Monday after Thanksgiving.

Amazon offered 30% off on board games and discounts on many of its gadgets. Target had 40% off Legos and robot vacuums for $75 off.

Cyber Monday is expected to generate as much as $12.7 billion in sales — a 35% jump from a year ago, according to Adobe Analytics.

SHIPPING SLOWDOWN

A big unknown hanging over the shopping season is this: Will retailers and shippers be able to deliver all those online orders in time for Christmas? Retailers have been warning shoppers to buy early this year, because with far more people shopping online during the pandemic, shippers may become overwhelmed with packages to deliver.

Prolonged delays could send people back to physical stores closer to Christmas, if many people eventually decide that old-fashioned stores are a more reliable way to obtain their gifts on time, said Charlie O’Shea, a retail analyst at Moody’s.

MORE CURBSIDE PICKUP

Curbside pickup, in which people order online and pick up at a store’s parking lot, is becoming a popular option for those who want their gifts right away or who fear that they won’t be shipped on time.

Some stores, like Macy’s, are offering curbside pickup for the first time this holiday. Others are making more space in their parking lots for people to park and pick up orders.

In the weekend after Thanksgiving, curbside pickup rose 67% from a year ago, according to Adobe Analytics.

ONLINE SMALL BUSINESSES GAIN, TOO

While retail giants Amazon and Walmart are likely to be the biggest winners this holiday season, smaller businesses that have an online presence are racking up sales, too.

Adobe Analytics says online sales at smaller retailers were up 349% on Thanksgiving and Black Friday. And at the more than 1 million businesses that use Shopify to build their websites, sales rose 75% from a year ago to $2.4 billion on Black Friday, according to Shopify.

Some shoppers are purposefully skipping big stores for smaller ones.

Bernadette Vielhaber, a technical writer in Avon, Ohio, says she bought books, T-shirts and other gifts from small businesses online, instead of giving her money to large companies that she feels don’t need it, like Amazon.

“I’m trying to be more supportive of people who are struggling to keep their businesses open,” she says.

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