DAWN MARIE REAL ESTATE

The amount you need for a down payment depends on the type of loan and your financial situation. While 20% is a common benchmark, many buyers put down less—some conventional loans allow as little as 3%, and FHA loans require just 3.5%.

Pre-qualification is a quick, informal estimate of how much you might be able to borrow based on self-reported income and debt — no documentation required. Pre-approval is a more thorough process where a lender verifies your income, assets, credit, and employment, and issues a conditional commitment letter. In a competitive market like Scottsdale, sellers take pre-approval much more seriously than pre-qualification.

Your credit score is one of the biggest factors lenders use to set your interest rate. Generally, the higher your score, the lower your rate. A score of 760+ typically qualifies you for the best available rates, while scores below 620 can make it harder to qualify at all. Even a 0.5% rate difference can mean tens of thousands of dollars over the life of a loan.

Closing costs are fees paid at the end of a real estate transaction, separate from your down payment. They typically range from 2–5% of the loan amount and can include lender fees, title insurance, escrow fees, prepaid homeowner's insurance, and property tax reserves. In Arizona, buyers can sometimes negotiate for the seller to contribute toward closing costs.

From accepted offer to closing, most transactions take 30–45 days with a financed purchase. The timeline can be shorter with cash (sometimes 10–14 days) or longer if there are inspection negotiations, appraisal delays, or loan complications. Finding the right home before you're even under contract can take anywhere from a few days to several months depending on the market and your criteria.

Yes, though the process requires more documentation. Lenders typically want two years of tax returns, profit and loss statements, and business bank statements. One challenge for self-employed buyers is that lenders use your net income (after deductions), not gross revenue, which can lower your qualifying amount. Working with a lender experienced in self-employed borrowers makes a significant difference.

Most mortgage payments are broken into four components, often called PITI: Principal (paying down the loan balance), Interest (the lender's charge for borrowing), Taxes (property taxes, usually escrowed monthly), and Insurance (homeowner's insurance, also escrowed). If your down payment is less than 20%, you'll also have PMI (private mortgage insurance) added until you reach sufficient equity.

A 2-1 buydown is a financing strategy where the interest rate is temporarily reduced for the first two years of the loan — typically 2% lower in year one and 1% lower in year two — before settling at the permanent rate in year three. For example, on a 7% loan, you'd pay 5% in year one, 6% in year two, and 7% from year three onward. It's designed to ease buyers into their payment, especially useful when rates are elevated.

Most commonly, the seller or builder pays for the buydown as a concession to make their property more attractive. The funds are deposited into an escrow account and used to subsidize the difference in payments during the reduced-rate years. In some cases, buyers can pay for it themselves, but it's most powerful as a negotiating tool — especially on listings with longer days on market.