From Broker to Budget: How to Buy or Sell a Home in 2025
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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. Our job is when you come in the door and you fill out your application, giving us all the necessary insights into your life, your income, your property, your assets, and your credit. Our job is to help find the best fit for you and your family. We take this information and we go into the market for you on your behalf and say, hey, we have this incredible client. Here's their profile. What can you do for them? We find the best lender and the best fit for our consumers to make sure they're getting into the home of their dreams with a price that they can afford at a cheaper than average market price by using a mortgage broker through the wholesale channel.
Got it. So essentially, a broker makes shopping around for a mortgage much easier than doing it on your own, which I know from personal experience can take a long time to do. So beyond saving time, brokers can also save people money. How much money are we talking? So there was a study done.
And what we did is that they pulled all the data from Hemda. Hemda is where all the data is stored on every closed transaction that occurs in the United States. They went and looked at what mortgage brokers offer versus anyone in the retail space. I actually spent a little over six years on the retail side of things. Those are your larger banks, larger institutions. And on average, on the wholesale side, you can save on average over $10,000 in interest alone. just by leveraging a mortgage broker. And a lot of it has to do with where they're allocating and putting money. If you're working with a retail lender, you can only use their products. It's whatever they offer is all you can do. As a mortgage broker, I can find and use the different products of every lender out there. And that means they want to earn your business. And therefore, they're going to make their pricings slightly more competitive. And over the life of the loan, that $10,000
you should be spending on your house, doing upgrades, putting it away, saving for retirement, saving for your children's school, whatever the case might be. Don't let that money go to waste. Let your house work for you. Don't work for your house. That's part of the advantage of working with a mortgage broker.
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