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News & Insights | Mortgage News

![The FYI on the ROI of a future rental property ](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F5cc2dadc8fac426fbc9eb7ebe16cab1f)

<br>

Here’s a look at the latest developments in the mortgage market this week. 

## Finding the right rental property 

![Finding the right rental property](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Faf928adc99cd425cb926c4a73fc75aac)

<p class="legal">Source: <a href="https://ipropertymanagement.com/research/real-estate-roi#residential-real-estate"> iProperty Management </a> </p>

If you’re looking to buy a property to rent out, should you buy a fixer-upper or a move-in ready home? It all boils down to your return on investment (ROI). 

__[A good ROI](https://www.forbes.com/sites/forbesrealestatecouncil/2021/05/28/how-to-calculate-the-roi-on-a-property-investment/?sh=2c5c5134dee4 "external")__ for a rental property is typically more than 10%, but 5%–10% can also be acceptable. But the ROI may be lower in the first year, due to the upfront costs of buying a home. 

__A fixer-upper may offer more upfront savings__ as their average list price is [25%](https://porch.com/advice/fixer-upper-capitals-study "external") lower than turnkey homes. 

Homeowners looking at a [29.3%](https://www.corelogic.com/intelligence/homeowner-equity-insights/#:~:text=Homeowner%20Equity%20Q4%202021,of%2029.3%25%20year%20over%20year. "external") year-over-year increase in home equity can __use a cash-out refinance to pay for their first investment property.__

## How to buy the right rental property

👀 __Look for a home with your ideal tenant in mind.__ Know how much rent they would want to pay and what they expect from a home. 

✍__Use an [ROI calculator](https://www.turbotenant.com/rental-property-calculator/ "external")__ to make sure the home you’re considering will likely generate the profits you’re after.

☔__Prepare an emergency fund.__ You’ll need to be ready to cover the cost of repairs, ongoing maintenance, or lost rent when the home is vacant. 

<br>

## Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com). Their team is here to keep you informed and on track from pre-approval to closing. 

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="http://www.better.com/start">See your rates with Better Mortgage</a> 

 </div>
<br><br>
<p class="legal">This newsletter does not constitute an endorsement or recommendation of Better Mortgage Corporation; Better Real Estate, LLC; Better Cover, LLC; Better Settlement Services, LLC; or their services. Better Cover is solely responsible for homeowners insurance services. Better Mortgage is solely responsible for making all credit and lending decisions with respect to mortgage loans.</p>

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Need the tools to find the right rental property for you? It all comes down to how to think about your return on investment.

The FYI on the ROI of a future rental property 

Blog post image for The FYI on the ROI of a future rental property

The FYI on the ROI of a future rental property

![Mortgage News: See How This Couple Saved On Their New Build](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F9509ff2a064e41c2b3c741140fd9ce8f)

<br>

Here’s a look at the latest developments in the mortgage market this week. 

## How Mateo and Ale put down roots in a new build 

Mateo and Ale found their perfect home before it was even constructed. It was part of a new development in Woodland, California, close to their family, work, schools, and parks. 

They locked in the listing price with a deposit, and over the course of a year, watched the house take shape while they saved for a down payment. 

When it came time for a mortgage, the couple chose Better Mortgage over their builder’s in-house lender. “It was a no-brainer,” says Mateo. The in-house lender offered incentives and Better Mortgage matched each one while offering lower costs.

<br>

<iframe width="100%" height="400" src="https://www.youtube.com/embed/M7_awdyU3m8?rel=0&amp;modestbranding=1" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>

<br>

---

🎥 [Read more about Mateo and Alejandra's story](https://better.com/content/finding-home-mateo-and-ale-testimonial)
⏱️️ [See how much you can save on a new build](https://better.com/start) 

---

## 3 low-cost renovations that step up your home’s value

![Two People Sitting Between Cans of Paint and a Ladder](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F19c761d5042e41f4830778ac34fb9df3)

Boosting your property value doesn’t require knocking down walls. Start small with easy changes that improve your life now, and appeal to an appraiser or homebuyer later. 

#### Swap out bathroom fixtures

Change up outdated faucets, knobs, mirrors and lighting for a modern feel. It can cost anywhere from $500 to $2,000.

#### Add crown molding

Complement any room with crisp, clean crown molding. It’s $7-$16 per square foot to install, which is about $1,100 for the average living room.

#### Spruce up the lawn

Impress visitors before they even walk through the door. Get fertilizer, garden tools, and a lawn mower for less than $1,000 at your local hardware store. 

---

💰 [Pay for renovations with a cash-out refinance](https://better.com/content/is-a-cash-out-refinance-right-for-you/)
☎️ [Review your options with a Better Mortgage Home Advisor](https://better.com/start)

---

## Buying is cheaper than renting in more than half of the 50 biggest cities

Home prices are rising—and rent is, too. January marks the 8th month that rental costs jumped by double digits, going up [19.8%](https://www.realtor.com/research/january-2022-rent/) for homes with up to 2 bedrooms.

In 26 of the 50 largest cities around the country, it’s actually cheaper to buy than rent. Monthly homebuying costs in places like Cleveland, Pittsburgh, Tampa, and Detroit were found to be [20%](https://www.realtor.com/research/january-2022-rent/) lower than renting. 

If you’re not already a homeowner, becoming one now could save you a lot in the long run. 

---

📝 [Estimate your home costs with Better Mortgage to run the numbers](https://better.com/start)
📚 [Run the numbers on renting vs. buying](https://better.com/rent-vs-buy-calculator) 

---

#### Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing.

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
 </div>
<br><br>
<p class="legal">This newsletter does not constitute an endorsement or recommendation of Better Mortgage Corporation; Better Real Estate, LLC; Better Cover, LLC; Better Settlement Services, LLC; or their services. Better Cover is solely responsible for homeowners insurance services. Better Mortgage is solely responsible for making all credit and lending decisions with respect to mortgage loans.</p>

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Discover how this couple saved big on their new build home with smart tips, expert strategies, and financing advice. Learn how to save on your dream home too!

See How This Couple Saved On Their New Build

Blog post image for See how this couple saved on their new build

See how this couple saved on their new build

![Mortgage News: The Fed Decision Will Likely Drive Rates Up](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F575d11fa68d4454cb020fc3685ed9490)

<br>

## A new announcement from the Fed signals the end of low rates 

![Two People Smiling and Seated Close Together on Sofa Surrounded by Moving Boxes](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fabb3140c916e49e89b7aec8ef7559e41)

The Federal Reserve, the country’s central bank, [recently announced](https://www.cnbc.com/2021/11/03/the-fed-holds-rates-near-zero-heres-what-that-means-for-you.html "www.cnbc.com") they’ll be purchasing fewer bonds. That means mortgage rates are likely to rise slowly through the end of the year. 

When the pandemic began last spring, the Federal Reserve made the move to purchase bonds to keep the economy running smoothly. It helped bring interest rates down to record lows, with the 30-year fixed rate hitting its [lowest point in history at 2.65%](http://www.freddiemac.com/pmms/ "www.freddiemac.com"). 

Now, as the market recovers and inflation rises, the Fed says they’ll begin to pull back the relief measure. Better Mortgage analysts expect to see rates rise steadily from now until the end of the year, without surpassing 3.25%. 

This may not be bad news for your mortgage, though. Rates are still at a low point from a historical perspective, with the 30-year fixed rate dropping slightly to [3.09% this week](http://www.freddiemac.com/pmms/ "www.freddiemac.com"). Many homeowners could save on a refinance, especially with programs like [RefiNow](https://better.com/content/you-could-reduce-your-monthly-costs-with-refinow "better.com") and [RefiPossible](https://better.com/content/you-could-save-on-monthly-costs-with-refipossible-tm "better.com"), which are estimated to drop payments by $100-250 per month. For homebuyers, higher rates may cool down today’s intense competition. We could see smaller price hikes, fewer bidding wars, and more first-time homebuyers enter the market. 

Mortgage rates tend to jump around after any Fed meeting, so locking your rate sooner rather than later may help you save more over the life of your loan. [See the best rates we can offer you](https://better.com/start "better.com") in minutes by getting pre-approved. 

## Why 39% of the largest homebuying generation is comfortable buying online

![Chart: Homebuyers Comfortable Buying Online by Generation](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F70098119f2e04ff0abfc26e67e3647f5)

Digital homebuying has expanded beyond real estate—you can get an [agent](https://better.com/realestate "https://better.com/realestate"), [insurance](https://better.com/hoi "https://better.com/hoi"), and a [mortgage](https://better.com/start "https://better.com/start") entirely online today. That coincides with a shift in who’s shopping for homes, as more millennials become homeowners who are comfortable with digital tools and services. 

Millennials are now the largest generation of homebuyers, with [37% buying homes](https://www.fool.com/the-ascent/research/millennial-homebuying/ "www.fool.com") in the last year. And [39% of millennial homebuyers](https://www.fool.com/the-ascent/research/millennial-home-buying-process/ "www.fool.com") say they’re comfortable with buying a home entirely online, along with 36% of Gen Z buyers. 

Shopping online helps you get a wide range of homes in any location, without having to travel. In fact, nearly [half of 2020 homebuyers](https://www.thebalance.com/should-you-write-an-offer-before-seeing-a-home-1798279 "www.thebalance.com") made offers on homes without seeing them in person. You can also focus your search with help from online tools like a [home affordability calculator](https://better.com/content/a-better-home-affordability-calculator/ "better.com"), which shows you the maximum home price you may be approved for, and [a mortgage calculator](https://better.com/mortgage-calculator "better.com") to estimate how much you’d pay each month. 

When you find a home you love and feel ready to make an offer, digital lenders like Better Mortgage can help you get your foot in the door. Make a competitive all-cash offer at no extra cost with the [Better Cash Offer program](http://better.com/b/cash-offer "better.com"). Or, stand out even more by waiving your appraisal contingency risk-free with the [Better Appraisal Guarantee](https://better.com/content/appraisal-contingency/ "better.com"). When your offer is accepted, the Better Mortgage team works quickly to help you close up to 10 days faster than the industry standard. 

Online buying can help you reach your homeownership goals while saving time, energy, and money. Your first step is [getting pre-approved](https://better.com/start "https://better.com/start"). Read up on [where and how to get a mortgage pre-approval online](https://better.com/content/where-and-how-to-get-a-mortgage-pre-approval-online "better.com"). 

## With interest rates on the rise, should you buy yours down with points? 

![View of the Peak of a Home](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F3be916b712864d03b7d17546ffe9fd20)

Closing costs on a single-family home have risen [12.3% in the first six months of 2021](https://www.housingwire.com/articles/closing-costs-are-up-but-theres-a-catch/ "www.housingwire.com"), to $6,837 with taxes and $3,836 without. With interest rates expected to rise from here, it’s important to save where you can on a mortgage. Buying down your rate with points may help. 

Points, also called discount points, are included in your closing costs. You can choose to pay more of them in exchange for a lower interest rate. One point is equal to 1% of the loan amount, and would typically drop the rate of your loan by about 0.25%. For example, paying $2,000 on a $200,000 mortgage could reduce your rate from 3.5% to 3.25%. That would save you over $10,000 in interest payments over the life of a 30-year loan. 

Buying mortgage points isn’t always the right choice for everyone—it all depends on where and when you break even between spending and saving. Typically, the more wiggle room you have in your budget, and the longer you plan to stay in your home, the more sense it makes to buy down your rate with points. Learn how to run the numbers with our [guide to mortgage points](https://better.com/content/what-are-mortgage-points "better.com"), or [get pre-approved to chat through your options](https://better.com/start "https://better.com/start") with a licensed Better Mortgage Home Advisor.

#### Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com/ "https://better.com/"). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
 </div>
<br><br>

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A new announcement from the Federal Reserve could mean the end of low rates—but that may not be bad news for buyers and homeowners.  

The Fed Decision Will Likely Drive Rates Up

Blog post image for The Fed decision will likely drive rates up

The Fed decision will likely drive rates up

![Mortgage News: What Inflation Means For Refinance Rates](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F96ea5270b96b41bfbb1108005f43a931)

Here’s a look at the latest developments in the refinance market this week.

## What rising inflation means for refinance rates, and where they could go from here
Rates are on the rise, but they’re still low compared to pre-pandemic months. The 30-year fixed rate mortgage rose [0.04% last week to an average of 3.09%](http://www.freddiemac.com/pmms/ "external"). For context, the rate hovered closer to 3.50% at the start of last year. 

There are a number of [factors that affect mortgage rates](https://better.com/content/what-affects-mortgage-rates/), but a large driver for today’s rise is inflation. Inflation refers to an increase in the prices of goods and services around the country, and how it relates to people’s ability to purchase them. If the goods and services you spend money on each year rose by 2% on average, it would mean 2% inflation. In other words, your income last year would buy 2% less at today’s prices. That’s a healthy rate of inflation, [according to The Federal Reserve](https://www.federalreserve.gov/faqs/5D58E72F066A4DBDA80BBA659C55F774.htm#:~:text=The%20Federal%20Reserve%20has%20not,percent%20or%20a%20bit%20below"external").

Today, [inflation is on the rise and likely to stay that way](https://www.reuters.com/world/us/yellen-says-us-has-options-raise-revenue-pay-build-back-better-bill-2021-10-24/ "external") until the middle of next year. That drives mortgage rates up because investors on the market expect lenders to increase their rates to align with their return on a loan. Between now and the end of the year, Better Mortgage analysts expect that rates will keep going up, but likely [won’t pass 3.25%](https://better.com/content/rates-remain-low-but-could-rise-from-here). 

Getting the ball rolling on a refinance can likely save you more than trying to time the market. [Get your personalized rates and estimated payments](https://better.com/start) in minutes, with zero obligations or impact to your credit score. You may even be eligible for programs like [RefiNow](https://better.com/content/you-could-reduce-your-monthly-costs-with-refinow) and [RefiPossible](https://better.com/content/you-could-save-on-monthly-costs-with-refipossible-tm), which are estimated to save up to $3,000 per year. 

![Industry Average Mortgage Rates for the Week Ending on October 21 Sourced from Freddie Mac](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F962464ea96294d3fabf520dca976549f)

[Source: Freddie Mac](http://www.freddiemac.com/pmms/ "external")
#### 15-year rates are lower than 30-year rates—is a shorter loan term right for you?
Shorter loan terms often carry lower interest rates than the popular 30-year mortgage. This week is no exception, with the [15-year fixed rate average at 2.33%](https://www.google.com/url?q=https://www.foxbusiness.com/personal-finance/todays-mortgage-refinance-rates-october-22-2021&sa=D&source=docs&ust=1635366008038000&usg=AOvVaw22WrctsDubB2U875nXnstK) and the 30-year average at 3.09%. While a lower rate doesn't always mean more savings, there are benefits to a shorter term that could help you get more out of a refinance. 

A shorter term often means higher payments, so a 15-year loan can be a good choice if you’ve got some wiggle room in your monthly budget. On the flipside, you’ll build home equity faster, because a larger portion of each payment is going towards the principal—the amount you borrowed—rather than interest. On a 30-year mortgage, monthly payments may be lower, but there is more going towards interest. To get a closer look at how your payments break down, [try the Better Mortgage amortization calculator](https://better.com/content/amortization-schedule/). 

The 15-year mortgage term usually comes with fewer upfront costs, too. They’re often exempt from the [loan-level price adjustment fees](chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fsinglefamily.fanniemae.com%2Fmedia%2F9391%2Fdisplay&clen=363560&chunk=true "external") that Fannie Mae and Freddie Mac can require for 30-year loans, and may come with lower insurance premiums. 

It all depends on your finances, priorities, and goals for a refinance. Read our [guide to 15- and 30-year fixed rate loans](https://better.com/content/15-vs-30-year-fixed-rate-mortgage/) to weigh your options, and find out what you can expect to pay for each term by [seeing your personalized mortgage rates](https://better.com/start). 
#### Considering a home loan?
Get your custom rates in minutes with Better Mortgage. Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/mortgage-rates/refinance">See today's refinance rates</a>  
 </div>
<br><br>

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Learn how rising inflation influences current refinance mortgage rates, where they may be headed next, and why acting fast could save you money.

What inflation means for refinance rates

Blog post image for What inflation means for refinance rates

![Mortgage News: Why Rising Home Values Could Help You Save](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F560c388ad2684deba47f7761f6347b92)

<br>

Here’s a look at the latest developments in the refinancing market this week.

## Your home may have gone up in value—and it could help you pay less on your mortgage

![Line Graph Showing U.S. Home Value Growth Year-Over-Year](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F883beaaa87264b8ead8d3d417592a220)

<p class="legal">Source: <a href="https://www.zillow.com/research/august-2021-market-report-30110/">Zillow Home Value Index</a></p>
<br>

Market values of homes around the country have risen by a record gain of [17.7% in the last year](https://www.zillow.com/research/august-2021-market-report-30110/ "17.7% in the last year"), and the typical U.S. home was worth [over $5000](https://www.zillow.com/research/august-2021-market-report-30110/ "over $5000") more in August than it was in July. That puts today’s homeowners in a good position to drop their private mortgage insurance (PMI) when they refinance. 

Private mortgage insurance (PMI) is added to your monthly mortgage payment as a buffer for some of the financial risk your lender takes on. If you put less than 20% down on your loan, it gets automatically applied. For conventional loans, PMI gets removed once you’ve gained 20% of your home equity. This happens as you pay off your loan, or when your home goes up in value. 

If you’ve been paying for PMI each month, it’s probably a good time to refinance and see how much your home is worth today. Your appraisal gives you an updated loan-to-value ratio (LTV), which can lower the price of the refinance, qualify you for more favorable terms, and drop PMI from your monthly payment. 

Get the ball rolling on a refinance to [see how much you could save today](http://better.com/start "see how much you could save today"). And for more details, read up on [how private mortgage insurance works](https://better.com/content/what-is-pmi-or-private-mortgage-insurance/ "how private mortgage insurance works"). 

## Mortgage rates jumped—and they’re expected to keep climbing.

After weeks of [hovering near 2020 lows](https://better.com/content/rates-remain-low-but-could-rise-from-here "hovering near 2020 lows"), mortgage rates are back on the rise. The 30-year fixed rate average rose 0.13% last week to [3.01%](http://www.freddiemac.com/pmms/)—its highest level [since July](https://www.cnbc.com/2021/09/29/mortgage-demand-falls-as-rates-rise-to-highest-level-since-july.html). Better Mortgage analysts expect rates to continue inching upward, though they’re not likely to rise beyond 3.25%. The market drove rates up in response to The Federal Reserve’s signals that they’ll [soon be tapering the measures](https://www.marketwatch.com/story/mortgage-rates-jump-above-3-creating-pressure-for-home-buyers-11633011496 "soon be tapering the measures") that have helped keep mortgage rates low since the pandemic began. 

Just a fraction of a percent can make a difference in your monthly payments, so it may be a good idea to move quickly on a new loan before rates can jump further. You could qualify for programs like RefiNow and RefiPossible, which guarantee homeowners drop their monthly payments by at least $50, and are estimated to save $3000 a year. [Check out your rates with Better Mortgage](https://better.com/start "Check out your rates with Better Mortgage") to see where you stand, and learn more about [RefiNow](https://better.com/content/you-could-reduce-your-monthly-costs-with-refinow "RefiNow") and [RefiPossible](https://better.com/content/you-could-save-on-monthly-costs-with-refipossible-tm "RefiPossible").  

![Image of Person in Minimal Setting with Laptop Smiling](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F8d38ea7761f74ebfa5e7ffaffd6d0cb6)

#### Considering a home loan?

Get your custom rates in minutes [with Better Mortgage](https://better.com/ "Better Mortgage"). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

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 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
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With property values rising, today’s homeowners are in a good position to refinance with new terms that remove private mortgage insurance. 

Why Rising Home Values Could Help You Save

Blog post image for Why rising home values could help you save

Why rising home values could help you save

![Mortgage News: Rates Remain Low, But Could Rise From Here](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fcdeb80b34e1a4aab8d67dc086a8ceb83)
<br> 

Here’s a look at the latest developments in the refinance market this week.

## Rates are close to September 2020 lows—but they could rise from here

![Double Line Graph: 2020 vs 2021 Freddie Mac PMMS Rates](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F4c3bebbeacb64a72b8f1e3419eef02ee)
<p class="legal">Source: <a href="http://www.freddiemac.com/pmms/">Freddie Mac PMMS</a></p>

<br>

The market has kept rates steadily low over the last couple of months, with the 30-year fixed rate mortgage moving only 0.01% last week [to 2.88%](http://www.freddiemac.com/pmms/ "external"). A [healthy economy usually means higher rates](https://better.com/content/what-affects-mortgage-rates/), but a new wave of COVID cases and lower-than-expected employment have stalled the country’s growth. 

Mortgage rates are in roughly the same place they were at this time in September 2020, when the 30-year fixed rate was just 0.02% away, at [2.86%](http://www.freddiemac.com/pmms/ "external"). Instead of dropping further, they’re [expected to rise this year](https://finance.yahoo.com/news/housing-market-forecast-rest-2021-210003957.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANu9mEZdj2nVO6bjn_kojz40vVPQO_M553l3kHJM-nY2J_pskFbiJZQR2K4LAkCWwgHQLqE-nI2FchRUMYcQaY52obLv4XMGjnQNQ3QPC8Um9wNjmPKqZbasrsgcArS24lxtB_bO4Cec2zIsr1Jw8wSWVWcXhM2SzdLoiWVWwWwd "external"). Better Mortgage analysts expect rates to start ticking up by mid-autumn, but remain below 3.25% in 2021. 

If you’re buying a home, it may be a good idea to lock in a rate quickly before they can rise. Get started by seeing [today’s rate table](https://better.com/start) to find out what you’d pay each month. If you’re not sure how to choose the best option for you, read [our guide to comparing mortgage rates](https://better.com/content/what-to-look-for-when-comparing-mortgage-rates/). 

## With the market short over 5 million homes, price gains reach another record high

Prices continue to climb as the home supply gap grows larger. Home price gains hit a record high of [18% year-over-year in July](https://www.corelogic.com/intelligence/u-s-home-price-insights/ "external"), with the national median asking price at [$385,000](https://www.realtor.com/research/weekly-housing-trends-view-data-week-sept-4-2021/ "external"). Low inventory is driving the price hike, since there are now more households in the country than there are homes. The U.S. Census found that [12.3 million American households](https://www.cnbc.com/2021/09/14/america-is-short-more-than-5-million-homes-study-says.html "external") were formed from January 2012 to June 2021, but just 7 million new single-family homes were built during that time.

Higher prices mean higher costs, including real estate commissions. A traditional real estate agent will take 5-6% of the home’s sale price, which can amount to $15,000 on a $250,000 home sale price. Better Real Estate Agents are salaried and don’t take a commission, which saves both the buyer and seller money. Learn more about [agent commissions and why you shouldn’t pay them](https://better.com/content/why-you-shouldnt-pay-real-estate-commission). 

## How Melany Anderson saved on a family home with Better Mortgage

![Photograph of Melany Anderson and 6-year-old Daughter Sourced from New York Times Article Published September 18, 2020](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Feadf23248359418aa50118a5aa9cf2bf)
<p class="legal">Source: <a href="https://www.nytimes.com/2020/09/18/business/digital-mortgages.html">NYTimes</a></p>

The digital tools and services at Better Mortgage help save customers money by cutting out a number of unnecessary loan fees. That came in handy when Melany Anderson, a pharmaceutical consultant from West Orange, New Jersey, set out to buy a home. 

After going through a rough divorce that put a strain on both her bank account and credit score, Melany was pushed to buy a home when her 6-year-old daughter asked why she didn’t have her own room where they were living. That put her on the path to becoming a homeowner—she slowly rebuilt her credit, saved up her income, and took money from her 401K to use on a down payment. 

Melany worked with Better Mortgage to buy a two-bedroom home with a modern kitchen, deck, and backyard in November 2019. She never had to step foot in a bank, and in the end, only paid $4,000 in fees—roughly [half the national average](https://www.urban.org/sites/default/files/publication/100533/fintech_innovation_in_the_home_purchase_and_financing_market_0.pdf "external"). Now she’s proud to be financially stable for her daughter, and Better Mortgage is proud to have helped her get there. 

There are a number of fees that come with a new home, but choosing the right lender and loan options can reduce them. Read up on which [mortgage costs you should (and shouldn’t) pay](https://better.com/content/cost-and-lender-fees-in-mortgage-process/). 

#### Considering a home loan?

Get your custom rates in minutes [with Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
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Rates are close to the lows of September 2020, giving today’s homebuyers a chance to save on their mortgage before they’re expected to rise. 

Rates Are Still Low On A New Home

Blog post image for Rates are still low on a new home

Rates are still low on a new home

![Mortgage News: Why Today’s Homeowners Should Have Insurance](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F8abd9e4666fb4d6c8da196217eed437b)
<br>

Here’s a look at the latest developments in the refinance market this week.

## Extreme weather is getting more frequent. Do you have the insurance you need? 

As [the impact of climate change](https://www.washingtonpost.com/climate-environment/2021/07/03/climate-change-heat-dome-death/ "external") continues to worsen around the country, storms and major weather events are becoming more frequent. If you want to protect your home and its financial value, it’s important to have insurance that fits your needs. 

[Homeowners insurance](https://better.com/content/why-do-i-need-homeowners-insurance) covers losses and damages that occur to or on your home. Your policy can provide the funds to repair or replace damaged property, and protect you from certain liabilities. While it may seem like an extraneous cost when things are going well, its value is undeniable when they’re not. 

Most homeowners pay around [$90 a month](https://www.lemonade.com/blog/homeowners-insurance-cost/) for homeowners insurance, though it depends where you live and what you need. Many types of damage like wind, hail, and lightning, are covered under a standard homeowners insurance policy. But some events fall under a separate deductible, like flooding. Just an inch of water can bring up to [$25,000 in damage](https://www.cnbc.com/2021/08/31/how-homeowners-can-be-financially-prepared-ahead-of-storms-like-ida.html "external"), so it can help to make sure you’re protected, even if that means getting an additional policy. 

Read up on [all things insurance](https://better.com/content/all-things-insurance) to figure out what you need for your home, and how to get it. If you’re looking for a fast insurance experience that’s entirely online, head to [Better Cover](https://better.com/hoi) to see how they can help. 

## With one less fee and low rates, it’s still a good time to refinance

Thanks to a steady market, mortgage rates remained in place for two weeks in a row. The [30-year fixed rate sat at 2.87%](http://www.freddiemac.com/pmms/ "external"), just 0.22% away from the all-time low it reached [in January](https://www.washingtonpost.com/business/2021/01/07/fixed-mortgage-rates-sink-lowest-levels-history-could-be-headed-higher/ "external"). 

It’s still a good time for many homeowners to refinance, especially now that the [FHA’s adverse market fee has been removed](https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Eliminates-Adverse-Market-Refinance-Fee.aspx "external"). This fee added an extra 0.5% to the loan balance, costing the average homeowner [$1,400](https://www.marketwatch.com/story/regulator-ditches-controversial-mortgage-refinance-fee-ahead-of-schedule-11626446564 "external") over the life of the loan. 

Roughly two thirds of the country’s mortgage applications come from homeowners refinancing, but that amount dropped [4% week-over-week](http://www.mortgagenewsdaily.com/09012021_applications_and_forbearances.asp "external"). Many more could be taking advantage of savings. To find out where you stand, crunch the numbers with the [Better Mortgage refinance calculator](https://better.com/content/refinance-calculator/) to see how much you could save. 

## Why Tess Silwa chose to buy her first home with Better Mortgage

Better Mortgage is proud to be a digital-first mortgage lender, because it helps them communicate quickly and efficiently with everyone they work with. That’s part of what drew Austinite Tess Silwa to the company when she decided it was time to buy her first home. 

Tess began house hunting with her partner in 2019. When browsing for lenders online, she was instantly impressed by Better Mortgage’s competitive rates. Tess says she decided on Better because the team was responsive and helpful, and didn’t make her feel like she had to come in knowing the loan process already, as so many other lenders had. If you’re new to homeownership and not sure what’s next, get a lay of the land with the [8 steps to buying a home.](https://better.com/content/steps-to-buying-a-house) 

## Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

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With extreme weather happening more often, the integrity of your home may be at risk—and homeowners insurance could be the answer. 

Why Today’s Homeowners Should Have Insurance

Blog post image for Why today’s homeowners should have insurance

Why today’s homeowners should have insurance

![Mortgage News: A Fannie Mae Change Could Help Homeowners Save](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F9c37f0d143b74b04b9829e84e13e5eb9)

<br>

## Here’s how your credit score could go further on a refinance

On September 18th, [Fannie Mae is rolling back restrictions](https://guide.freddiemac.com/app/guide/bulletin/2021-28?utm_source=eloqua&utm_medium=email&utm_campaign=2021-08-11_POLICY_Guide-Policy&elqTrackId=747C89626F11F8DD6608D507513F79CC&elq=3c2cd261068e4b0598a1b73e455c6b5b&elqaid=10401&elqat=1&elqCampaignId=9764) that impact how lenders evaluate credit scores. Instead of considering only the lowest of two FICO scores between a primary and co-borrower, lenders will now be able to combine them for an average score. That means you’ll be represented by either the same score or higher when applying to a Fannie Mae-backed lender like Better Mortgage. 

Your credit score is a large part of how lenders evaluate your ability to pay back a loan. The higher your score, the lower the rate you likely qualify for—which means more savings on a refinance. It also affects the price of your mortgage insurance, which is required if you make a down payment less than 20%. Get a sense of [how your credit score affects your mortgage](https://better.com/content/how-your-credit-score-affects-your-mortgage/), and how to improve it before applying.

This change is coming just in time as mortgage rates begin to tick upward. America’s most popular home loan, the 30-year fixed rate mortgage, [reached 2.87% last week](http://www.freddiemac.com/pmms/). That’s not far from its all-time low of [2.65%](https://www.washingtonpost.com/business/2021/01/07/fixed-mortgage-rates-sink-lowest-levels-history-could-be-headed-higher/), but it is a 0.10% jump from the week before. 

The market drove rates up in response to the country’s latest jobs report. Employment and wages are increasing, and a [healthy economy usually means higher mortgage rates](https://better.com/content/what-affects-mortgage-rates/). It may help to move quickly on your refinance before they can rise further, so [see what today’s rates mean for your budget](https://better.com/start). 

## Considering a home loan?
Get your custom rates in minutes with [Better Mortgage](https://better.com). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

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Lenders will evaluate credit scores differently starting September 18th, and homeowners may be in a position to save even more on their next refinance.

A Fannie Mae Change Could Help Homeowners Save

Blog post image for A Fannie Mae change could help homeowners save

A Fannie Mae change could help homeowners save

![Mortgage News: How First-Time Buyers Can Compete As Prices Rise](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fe914f1f489d64d82bb4bf1ecd4d130a7)

<br>

Here’s a look at the latest developments in the mortgage market this week. 

<ul>
<li><strong>First-time buyer? Here’s how to avoid getting priced out.</strong></li>
<li><strong>More homeowners refinance while rates hover at a six-month low</strong></li>
<li><strong>New construction home sales dip as lumber costs rise</strong></li>
<li><strong>What is an escrow account?</strong></li>
</ul>

Anyone searching for a home today is up against rising prices, bidding wars, and intense competition. But the path to homeownership tends to be extra bumpy for first-time buyers, because they enter the market with smaller budgets and no home equity. In July, [37% of first-time buyers](https://www.inman.com/2021/07/16/first-time-buyers-still-eager-despite-snags-on-path-to-homeownership/ "external") said they had to set back their homebuying timeline after losing income during the pandemic. 

Instead of hitting pause on your search, there are some loan options that could help you compete for a home—without putting more money on the table. 

#### Make a lower down payment

It takes a [year longer to save for a 20% down payment](https://www.wkrn.com/news/local-news/reports-first-time-buyers-need-year-longer-to-save-for-20-percent-down-payment-compared-to-5-years-ago/ "external") than it did 5 years ago, which may be why [35% of buyers](https://www.nar.realtor/sites/default/files/documents/2020-downpayment-expectations-and-hurdles-to-homeownership-report-04-16-2020.pdf "external") cite it as their primary roadblock to owning a home. But 20% down isn’t always required—and last year, [roughly two-thirds of first-time buyers](https://www.zillow.com/research/how-long-to-save-a-down-payment-29735/ "external") put down less than that. 

With an [FHA loan](https://better.com/content/what-is-an-fha-loan/), you could put as little as 3.5% down on a home and still lock in competitive rates. These mortgages carry more lenient qualifying guidelines than conventional loans, especially when it comes to savings and credit scores, so it’s worth finding out [if it’s the right option for you](https://better.com/content/fha-loan-requirements/ "external").

#### Improve your debt-to-income ratio

Saving for a home can be tough to balance alongside student loan debt, which accounts for [20% of the decline](https://www.federalreserve.gov/publications/files/consumer-community-context-201901.pdf "external") in homeownership among young adults. But the reality is, lenders don’t look at how much student debt you have in total. They look at how you’re paying it down each month, typically through your debt-to-income (DTI) ratio. Learn [how to assess your DTI](https://better.com/content/what-is-a-good-debt-to-income-ratio/) to see where you stand, and raise your chances of [getting approved for a mortgage with student loans](https://better.com/content/getting-a-mortgage-with-student-loans/). 

#### Get the Better Appraisal Guarantee

Negotiating with a seller doesn’t always mean putting more cash on the table. [Waiving your appraisal contingency](https://better.com/content/appraisal-contingency/) can boost your odds of an accepted offer by 50%.* Normally, you’d risk losing your lender or having to change your loan terms. But with the [Better Appraisal Guarantee](https://welcome.better.com/better-appraisal-guarantee/), you could get the loan terms you locked no matter what the appraisal says.** 

Even with historically low inventory, first-time buyers still have a place in today’s market. And with mortgage rates as low as they are, it’s worth taking a look at what you can afford. [Crunch the numbers with our affordability calculator](https://better.com/content/a-better-home-affordability-calculator/) to see what a new home could look like with your budget. 

## More homeowners refinance while rates hover at a six-month low

Last week, the [30-year fixed rate average ticked up to 2.80%](http://www.freddiemac.com/pmms/ "external"). Even with the increase, the rate is at a 6-month low and still only 0.15% away from an all-time low of 2.65%. [Millions of homeowners](https://time.com/nextadvisor/mortgages/mortgage-news/do-you-qualify-to-save-on-refinance-loan/ "external") stand to save on a refinance, and many are taking note. Refinance applications have [jumped up 9% week-over-week](https://www.cnbc.com/2021/07/28/mortgage-rates-at-six-month-low-and-refinances-shoot-up.html "external") around the country. 

A refinance can lower your mortgage rate and monthly payments, and provide other benefits too. Whether you want a shorter loan term, an influx of cash, or fewer debt payments, getting a new loan can make it happen. [Find out how a refinance could help](https://better.com/content/6-reasons-to-refinance-your-mortgage/) you reach your financial goals, and [check your rates](https://better.com/start) to see how much lower your payments could be. 

## New construction home sales dip as lumber costs rise

Rising home prices are [tamping down the demand](https://better.com/content/how-to-get-an-offer-accepted-in-todays-market/) for new construction homes, and June saw the [lowest number of new home sales](https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html "external") since April 2020. The price spike is thanks to a shortage in softwood lumber, which increased in cost by [over 300% during the pandemic](https://www.cnbc.com/2021/07/19/homebuilder-confidence-slips-in-july-as-construction-costs-rise.html "External"). Now it costs roughly 75% more than it did in 2019, but builders have had to raise their prices to keep up. 

It can be tough to bargain down the price of a newly built home. Instead, it may be easier to negotiate with a builder through upgrades to the home itself. Choose materials from their showroom that would add value to the property, like hardwood floors, or marble countertops. If you want to learn what to look out for, avoid, and prepare for in a new home sale, [read our quick and easy Q&A](https://better.com/content/buying-a-new-construction-home/). 

## What is an escrow account? 

Escrow accounts are specifically designed to hold money meant for home costs, whether it’s during the sale itself or throughout the course of a mortgage. They usually come into play after a loan is finalized, but it helps to know what they are beforehand too. [Get to know the ins and outs of escrow accounts](https://better.com/content/what-is-an-escrow-account/)—from what they are, to how they work, to why opening one could help protect your mortgage. 

## Considering a home loan?

Get your custom rates in minutes [with Better](https://better.com/) Mortgage. Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

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<p class="legal">*Results based on a survey of 104 real estate agents in competitive markets. Of those surveyed, more than ~60% responded that waiving the appraisal contingency could increase the likelihood of having a competitive offer accepted by 50% or more. Results may vary and are not intended to represent or guarantee that anyone will achieve the same or similar results.</p>

<p class="legal"><a href="https://welcome.better.com/better-appraisal-guarantee/">**See Better Appraisal Guarantee terms and conditions</a></p>

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First-time homebuyers are getting left behind as home prices skyrocket. Follow these tips to improve your standing, without putting more money down.

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