Frequently Asked Questions

Please reach us at matt@mdqhomes.com if you cannot find an answer to your question.

What factors are important for mortgage pre-approval?

-Credit

-Debt

-Income

-Employment

-Assets

How do credit scores impact buying a home?

-Your credit score helps determine your mortgage rate.

-Your credit score (commonly called a FICO Score) can range from 300-850. A score of 740 or above is generally considered very good

*You don’t NEED that score or above to buy a home

-Ways to improve your credit score:

Your Payment History: Late payments can have a negative impact by dropping your score. Focus on making payments on time and paying any existing late charges quickly.
Your Debt Amount (relative to your credit limits): When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible.
Credit Applications: If you’re looking to buy something, don’t apply for additional credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.

Do you have to put 20% downpayment when buying a home?

No, but there are some benefits and potential downsides if you choose to do so.

Median Downpayment: 1st Time Homebuyers (8%), All Homebuyers (15%)

Benefits:

-Reduces your monthly payment

-Can help you get a lower interest rate

-Eliminates Private Mortgage Insurance (PMI)

*PMI can cost between 0.2% and 2% of your loan amount every year

Downsides:

-Can take a while to save

-Less benefit when interest rates are low

-Could leave you without emergency savings