You do not always need 20% down. The amount depends mainly on the loan type and your qualifications. The big picture is that many buyers put down less, but smaller down payments often require mortgage insurance or lead to higher total borrowing costs.

Common minimums look like this:

Conventional: Some programs go as low as 3% down, including Fannie Mae’s HomeReady program for eligible borrowers. 
FHA: typically 3.5% down. 
VA: often 0% down for eligible borrowers. 
USDA: often 0% down for eligible rural properties and borrowers. 
The reason people still talk about 20% down is that on a conventional loan, putting down less than 20% usually means you will need private mortgage insurance (PMI). The CFPB also notes that a down payment under 20% often raises your monthly costs because of mortgage insurance.

Pre-qualification is usually a quicker, earlier estimate of what you might be able to borrow. It is often based on information you provide about your income, debts, and assets, and some lenders may use less documentation at that stage.

Pre-approval is usually more serious and more useful when you’re ready to shop. A lender typically reviews more of your financial information and gives you a letter stating the maximum amount they are willing to lend, subject to final conditions such as the property and full underwriting.

Your credit score affects your mortgage rate through risk-based pricing: lenders generally view higher scores as lower risk, so they usually offer lower interest rates and sometimes lower fees. Lower scores can mean a higher rate, more upfront pricing adjustments, or fewer loan options.

For conventional loans, a credit score can affect pricing through loan-level price adjustments (LLPAs). Fannie Mae says LLPAs are assessed based on the loan’s representative credit score and other factors such as loan purpose, occupancy, units, and product type. For multiple borrowers, Fannie Mae uses the lowest applicable score in the group as the representative score for pricing

Closing costs are the upfront fees and expenses paid when the mortgage is finalized and ownership transfers. They usually include lender fees plus third-party charges such as the appraisal, title services/title insurance, government recording or transfer fees, and prepaid items like homeowners insurance, property taxes, and prepaid interest.

A common estimate for a home purchase is about 2% to 5% of the loan amount. So on a $300,000 mortgage, a rough range would be $6,000 to $15,000. Freddie Mac uses that 2%–5% range for purchase closings.

Usually, from accepted offer to closing, the homebuying process takes about 30 to 45 days, and Freddie Mac says the average time to close a purchase loan is 43 days. Some transactions take up to 60 days or more, depending on financing, inspections, appraisal, title work, and how quickly documents get completed

Yes — you can buy a home if you’re self-employed or have irregular income. The main difference is that lenders usually need more documentation and want to see that your income is stable and likely to continue. The CFPB says self-employed, irregular, seasonal, or non-wage income borrowers often have to provide more extensive paperwork than W-2 borrowers.

What lenders commonly look for is:

Tax returns, often the most recent two years
Business tax returns, if applicable
A year-to-date profit and loss statement
Sometimes, a balance sheet or other proof that your business is operating and that income is ongoing.

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Your monthly mortgage payment usually includes principal and interest, and often also property taxes and homeowners' insurance. In mortgage shorthand, people often call that PITI: principal, interest, taxes, and insurance. The CFPB notes that your total monthly payment is usually higher than the principal-and-interest amount alone because of additional costs.

Here’s what each part means:

Principal: the amount that pays down what you borrowed
Interest: the lender’s charge for the loan
Property taxes: often collected monthly and paid by the lender when due
Homeowners insurance: often collected monthly, the same way 
Depending on your situation, your payment may also include mortgage insurance. For a conventional loan, that is often PMI if your down payment is under 20%. Freddie Mac says PMI is commonly included as part of the monthly payment, often through escrow.

A 2-1 buydown is a temporary mortgage-rate reduction for the first two years of the loan. In year 1, your payment is calculated as if your rate were 2 percentage points lower than the note rate. In year 2, it is 1 point lower. Starting in year 3, you pay the full note rate for the rest of the loan term.

Example: if your actual fixed rate is 6.5%, a 2-1 buydown would usually work like this:

Year 1: payment based on 4.5%
Year 2: payment based on 5.5%
Year 3 onward: payment based on 6.5%
How it works behind the scenes: the loan’s real note rate does not change. Instead, funds are typically set aside up front to subsidize the difference in the early payments, so you make a lower payment at first, and the servicer applies the subsidy each month. Fannie Mae and Freddie Mac both describe these as temporary buydown/subsidy plans rather than permanent rate changes.

The main benefit is lower payments in the first two years, which can improve affordability early on. The main risk is payment shock when the payment steps up in year 2 and again in year 3 if your income does not rise or you do not refinance. Freddie Mac notes these plans are best suited to borrowers who can handle higher payments later, and recent reporting warns buyers to plan for the full payment, not just the teaser payment

Often, the seller or builder, though it can also be funded by lender credits, gift funds, or certain third parties, depending on the program and loan type.