🗞️ Sunday Special: 25 things you should know about buying a home by 25

Learn 25 things you should’ve learned about buying and owning a home in school ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ [Better] [Better]( Mortgage rates the week of 08/31/2023 [Rate chart] [Rate chart]( Source: US average mortgage rates from [FreddieMac]( --------------------------------------------------------------- Better Mortgage Interested in today's rates? [See Better Mortgage rates]( --------------------------------------------------------------- #FundFact 😮 More than half of Americans - including homeowners - don’t understand what a mortgage is, according to a poll conducted in 2022.¹ Things to know 25 things you should know about buying a home by 25 25 things you should know about buying a home by 25 Buying a home is one of the biggest financial purchases the average person makes in their lifetime. Despite that fact, we spend a collective 12 years between primary and secondary schooling without learning how to do it! For this week's read, we’ve put together a list of 25 essential things about buying and owning a home that you didn’t learn in school but should have! - A 20% down payment isn’t required to buy a home 
While there are benefits to putting 20% down, like not having to pay mortgage insurance, it’s not required to purchase a home. In fact, first-time homebuyers can put down as little as 3% through certain programs. To put that into perspective, that means a $10K down payment can get you a $300K house. - The rate you take on doesn’t have to be the rate you keep for the life of your loan While the most common mortgage term is 30 years, the average mortgage length is only 8 years!² Homeowners often sell their home or refinance their mortgage. Refinancing a mortgage allows homeowners to update the interest rate and/or terms of their current mortgage. - Upfront mortgage costs involve more than just a down payment… Other costs include closing costs, insurance, title, appraisal, and home inspection costs! - Monthly costs include more than your mortgage payment Property taxes, HOA fees, and homeowners insurance should also be considered in your monthly budget. And don’t forget about maintenance and repairs, which cost homeowners an average of $6,000 last year.³ - Building a homebuying budget can be a good first step in your homebuying journey Before you start hitting open houses, you should determine a homebuying budget which should include the cost of your mortgage and home as well as costs like house utilities, insurance, property taxes, and other monthly expenses. While you might have a general idea of your budget based on your financial situation, a [home affordability calculator]( can give you an even clearer picture. - A mortgage pre-approval lets you know how much you are qualified to borrow from a lender After building a homebuying budget, it’s a good idea to get pre-approved with a lender to understand the type and amount of loan you qualify for. The Consumer Financial Protection Bureau (CFPB) recommends that you speak with at least 3 different lenders before moving forward with a loan.⁴ - The minimum credit score needed for a conventional mortgage loan is 620 A conventional loan is a mortgage that is not government-backed. However, government-backed mortgages like Federal Housing Administration (FHA) and Veteran Affairs (VA) loans typically have lower credit requirements than conventional loans. - If you plan on using a co-borrower to qualify for a mortgage, the lower of the 2 credit scores will count On a joint mortgage, both credit scores matter. Lenders will typically look at the credit scores from the 3 credit bureaus of each applicant to figure out the middle score, and then use the lower of the two middle scores. - There are numerous [loans, grants, and down payment assistance programs]( made specifically for first-time homebuyers. - Mortgages aren’t one size fits all Each mortgage is unique! There are [multiple types of mortgages]( each with its own terms and conditions. FHA, VA, and USDA mortgage loans are types of loans, and each have fixed-rate and adjustable-rate options. There are also different mortgage terms, which is how long you have to repay the loan. Common mortgage terms are 15, 20, and 30 years. - While you can apply for a mortgage, you cannot lock a rate until you have an accepted offer and a purchase contract. - Some mortgages have prepayment penalties—try to avoid them if you can! [Prepayment penalties]( are a fee some lenders charge for making early payments. Making additional payments towards your principal can significantly reduce the total interest you pay over the life of your loan, so try to avoid them if you can! - It’s a good idea to do research on property taxes and homeowners insurance in the area you’re searching for a home Since you know you’ll end up paying property taxes and homeowners insurance in addition to your mortgage payment, doing research will give you a better idea of what your total monthly costs will look like. - Homeowner’s insurance isn’t the only insurance you’ll need Other insurances that can be associated with owning a home include Mortgage Insurance Premium (MIP) or Private Mortgage Insurance (PMI). - Your employment history matters When you’re qualifying your income, you'll often need work history in the same industry for 2+ years. This is good to keep in mind if you’ve recently changed career paths, or plan to in the near future. - You’ll be required to get an appraisal for your mortgage, but you should get a home inspection as well An appraisal will determine the appraised value of your home, which will be used for pricing on your mortgage. A home inspection however, helps determine the condition of the home which can save you from having to deal with major repairs down the line. - According to the National Association of Realtors(NAR), homebuyers spent a total of 10 weeks searching for a home on average.⁵ - You’ll have an interest rate and an annual percentage rate (APR). Your interest rate is the cost you pay to borrow money from your lender. Your APR is helpful for comparing loans because it's inclusive of all costs including interest, fees, and other charges like closing costs, insurance, discount points, or origination fees. - According to the Real Estate Settlement Procedure Act (RESPA), you should receive an official Loan Estimate (LE) within 3 days of submitting an application and an Initial Closing Disclosure (ICD) at least 3 days before closing. - You can use an attorney to close on your home In a home purchase transaction, both the buyer and seller have the option to hire an attorney to review documents like the purchase contract and assist with negotiations. Attorneys are required for home purchases in NY, NJ, and IL! - Homeowners can access their home equity as cash through a Home Equity Line of Credit (HELOC) or a cash-out refinance Equity is the difference between how much your home is worth and how much you owe on your mortgage. Once you’ve paid down your mortgage, you’ll begin to build equity in your home which can be accessed as cash in the form of a [HELOC]( or cash-out refinance. - Once you close on your mortgage, your first payment will be due the second month after closing. For example, if you close on 8/1, you won’t make a payment until 10/1. - Lenders typically require borrowers to create an escrow account Escrow accounts are used to collect and pay your property taxes and insurance. - Some lenders service your mortgage loan, while others may transfer service after funding Your lender's servicing intent can be found on page 3 of your official loan estimate documents. - Tech is the future of homebuying! Technology has modernized the way people buy homes; especially in the mortgage process. Today borrowers can go from pre-approval to closing 100% online from the comfort of their home. --------------------------------------------------------------- Better Mortgage Go from locked to conditionally approved in 24 hours with Better Mortgage [Get started with One Day Mortgage⁶]( --------------------------------------------------------------- Press play Follow us on social to stay up to date with the latest mortgage tech, tips, and tools: Watch on [TikTok]( • [Instagram]( • [YouTube]( • [Facebook]( --------------------------------------------------------------- Better Mortgage Questions? Connect with a mortgage expert now [Apply today]( --------------------------------------------------------------- Quiz What is a mortgage? - An agreement that gives the lender the right to take your property if you fail to repay. - Type of loan that is used to finance a home purchase. - Type of loan that is secured by real estate. - All of the above [Better] [Better] [social]( [social]( [social]( [social]( [social]( ¹Source: [NY Post]( ² Source: [SoFi]( ³ Source: [CNBC]( ⁴ Source: [CFPB]( ⁵ Source: [National Association of Realtors]( ⁶ Better Mortgage’s One Day Mortgage promotion offers qualified customers who provide certain required financial information/documentation to Better Mortgage within 4 hours of locking a rate on a mortgage loan the opportunity to receive an underwriting determination from Better Mortgage within 24 hours of their rate lock. The underwriting determination is subject to customary terms, including fraud and anti-money laundering checks, that take place pre-closing and which may trigger additional required documentation from the customer. Better Mortgage does not guarantee that initial underwriting approval will result in a final underwriting approval. See [One Day Mortgage Terms and Conditions](. © 2023 Better Holdco, Inc. and/or its affiliates. Better is a family of companies. Better Mortgage Corporation provides home loans; Better Real Estate, LLC and Better Real Estate California Inc License # 02164055 provides real estate services; Better Cover, LLC sells insurance products; and Better Settlement Services provides title insurance services; Better Connect, LLC dba Better Attorney Match provides real estate attorney connection services; and Better Inspect, LLC provides home inspection services. All rights reserved. Home lending products offered by Better Mortgage Corporation. Better Mortgage Corporation is a direct lender. NMLS #330511. 3 World Trade Center, 175 Greenwich Street, 57th Floor, New York, NY 10007. Loans made or arranged pursuant to a California Finance Lenders Law License. Not available in all states. Equal Housing Lender [Equal Housing Lender]. [NMLS Consumer Access]( BETTER MORTGAGE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, PROMOTIONS AND BENEFITS AT ANY TIME WITHOUT NOTICE. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. 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