NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Mon, 24 Mar 2025
Learn how to budget for a mortgage, compare lenders, and prep for home buying or selling in today’s changing housing market. How can you shop smart for a mortgage and pick the right broker or lender? How do you budget for a home purchase? Hosts Sean Pyles and Elizabeth Ayoola discuss mortgage shopping and home affordability to help you understand how to make informed, strategic choices when buying or selling a home. Joined by Jonathon Haddad, president of Next Door Lending, and Kate Wood, NerdWallet mortgage expert, they cover how brokers work, what to look for in a lender, and how to avoid common pitfalls when comparing loan offers. They begin with a conversation with Jonathon Haddad about the benefits of using a mortgage broker, how much money borrowers could save, and key questions to ask when shopping for a loan. Then, Kate Wood helps answer a listener’s question about selling a home in 2025, including tips on agent commissions and how market shifts could affect sellers. They discuss how to budget for a down payment, what expenses first-time homebuyers often overlook, and how to know if you’re financially ready to buy. If you’re ready to find the right mortgage with expert guidance every step of the way, get started today at https://www.nerdwallet.com/prequalify/m/mortgage-experts/lp1 Here’s what mortgage brokers are and how to find one: https://www.nerdwallet.com/article/mortgages/how-to-find-a-mortgage-broker See how far your homebuying budget could take you with NerdWallet’s home affordability calculator: https://www.nerdwallet.com/calculator/how-much-house-can-i-afford First-time home buyer programs by state: https://www.nerdwallet.com/article/mortgages/first-time-home-buyer-programs-by-state In their conversation, the Nerds discuss: how to find a mortgage broker, mortgage broker vs lender, mortgage broker fees, best way to shop for a mortgage, how to compare mortgage lenders, mortgage broker savings, mortgage loan estimate tips, choosing a mortgage broker, home buying budget calculator, how to budget for a house, down payment assistance programs, closing costs for first time home buyers, private mortgage insurance, how to prepare for buying a home, home buying tips 2025, first time home buyer loans, FHA loan down payment, conventional loan down payment, va loan down payment, usda loan down payment, home buying closing costs, real estate agent commission 2025, how to sell your house, how to choose a real estate agent, realtor commission changes 2025, selling a house in 2025, how to budget for home maintenance, moving costs when buying a house, first time home buyer help, what credit score do you need for a mortgage To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend.
Chapter 1: How did Sean secure the best mortgage deal?
Sean, you're a homeowner. When you bought your house, how did you make sure you got the best deal on your mortgage?
Well, I bought my house in 2021 and was still spending a lot of time holed up in my house due to the pandemic. So I had plenty of time to shop around and compare lenders and naturally build out a very elaborate spreadsheet with all of my options.
Well, that's definitely on brand for you, Sean. And I'm glad that you did your due diligence.
NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
And I'm Elizabeth Ayola. On this episode, I talk with mortgage nerd, Kate Wood, to answer a listener's question about how much house they can afford as a first-time buyer.
And sadly, I'm not there for that conversation, but spoiler alert, I may make a special cameo, and you'll just have to listen to find out what that means exactly. But first, we're going deep into the nuts and bolts of shopping around for a mortgage, including how to get the best rates and what to look for in a broker or lender.
And joining us in this conversation is Jonathan Haddad, president of Nextdoor Lending, a mortgage broker and wholly owned subsidiary of NerdWallet. Jonathan, welcome to Smart Money. Thank you for having me today, Sean.
So I think a lot of folks might not fully understand the role of a mortgage broker. Can you explain what a broker does and also how they fit into the home buying process as a whole?
Mortgage brokers fit into the process as that in-between person to help find the best opportunity for you and your family. It's really quite simple. Over the last decade, mortgage brokers have increased the market share to over 25%, which means one out of four homeowners are now using a mortgage broker.
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Chapter 2: What are the benefits of using a mortgage broker?
There are also FHA loans, and these are often popular with first-time homebuyers because they have less strict qualifications. Those can have down payments as low as 3.5%. It's going to vary by credit score, though. For buyers who have a military connection and are eligible for a VA loan, or if you're buying in a rural area and could use a USDA loan, those loans don't require a down payment at all.
When you mention a larger down payment, it takes me back to the pandemic times when I was considering purchasing a property and it was a seller's market. I remember larger down payments being a theme and a tip shared by realtors that I work with at the time. Would you recommend people aim to save 20% down payments?
So in most parts of the country, it is very much still a seller's market. And, you know, realistically, in that kind of market, making a larger down payment could potentially help set you apart from other buyers, especially if you're competing with cash buyers.
Even if the seller is looking at two offers that are offering the same price for the home, sometimes seeing a larger down payment can feel like more money to them. Just seeing that number feels a lot better. They feel more confident. It can also send the message that you're making a serious offer.
But especially for first-timers, it's important to remember that you are not required to make a 20% down payment. Last year in 2024, according to the National Association of Realtors, the median down payment for first-time home buyers was 9%.
Kate, where does the idea of a 20% down payment even come from? And I imagine that sounds intimidating to me, especially with home prices these days. That might be tough to do in this economy for some people. It is tough to do because 20% of a home price is
generally a substantial amount, right? Even if you were looking at a $100,000 home, which really doesn't exist at this point, but even if you were, that would be saving up $20,000. That's a lot of money to set aside.
So the idea that you need that size of a down payment, it just comes from conventional loan requirements that you need a down payment of at least 20% to avoid private mortgage insurance. So you can make a lower down payment. So you'll need to pay private mortgage insurance until you've got at least 20% equity in the home.
And this is to help assure the lender that they aren't taking on too much risk. So mortgage insurance, it's not nothing, but I also want to emphasize it's not the end of the world, okay? So mortgage insurance is going to vary between about 0.5% to 1.5% of the amount of your mortgage. So not of the price of the home, but the amount that you actually borrow.
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