What Is a Fixed-Rate Mortgage?

Buying a house is one of life’s most exciting landmarks—not to mention one of the biggest purchases. With the average U.S. home price sitting at nearly $260,000, that usually means acquiring a fixed-rate or adjustable-rate mortgage, whose definitions are inherent in the names.

Welcome to the wide (and slightly wacky) world of mortgages. Whether a consumer is considering a fixed or adjustable interest rate is a big factor when shopping for lenders and the home loans each offers.

Read on to learn about the differences among mortgages.

Fixed Rated Mortgages Defined

A fixed-rate mortgage is, as its name suggests, a mortgage loan whose interest rate is fixed across the lifetime of the loan. The rate is stated at the time the documents are signed and does not change at any point throughout the loan term (provided that all payments are made in full and on time).

This is in contrast with an adjustable-rate mortgage, whose interest rate can move up or down according to the market. With an ARM, the interest rate is calculated according to the index and margin—the index is a benchmark interest rate based on market conditions at large, and the margin is a number set by the lender when the loan is applied for.

Long story short: A fixed-rate mortgage offers you a predictable interest rate and monthly payment, whereas an adjustable-rate mortgage can shift over the course of the loan term according to external factors.

(It is, however, important to understand that your total monthly housing bill can still change, even with a fixed-rate mortgage, if, for example, your property taxes or homeowners insurance rates change or if you miss several payments.)

Pros and Cons of Fixed-Rate Mortgages

Fixed-rate mortgages are more common among homebuyers because of the predictability they offer. Still, there are both drawbacks and benefits to pursuing this kind of home loan.

Benefits of Fixed-Rate Mortgages

Because homebuyers who take out fixed-rate mortgages will know their rates at the time they sign on the dotted line, these loans provide long-term predictability and stability—which can help people who need to fit their housing expenses into a tight budget.

Fixed-interest mortgages, and other types of fixed-rate loans, shield borrowers from potentially high interest rates if the market fluctuates in such a way that the index significantly rises.

Drawbacks of Fixed-Rate Mortgages

Although fixed-rate mortgages are more predictable over time, they tend to have higher interest rates than ARMs—at least at first. Sometimes an ARM might have a lower interest rate but only for a relatively brief introductory period, after which the rate will be adjusted.

If the index rate falls in the future, homebuyers might end up paying more in interest than they would have with an ARM.

Because the principal balance is generally chipped away at more slowly with a fixed-interest rate mortgage than with an ARM, it can take longer for borrowers to build equity in their home.

Because lenders risk losing money on fixed-interest mortgages if index interest rates go up, these loans can be harder to qualify for than their adjustable-rate counterparts.

Heads-Up on 5-Year ‘Fixed-Rate’ Mortgages

While fixed-rate mortgages generally exist in opposition to adjustable-rate mortgages, some lenders sell what’s called a fixed-rate mortgage—but which is actually an ARM in costume.

Some so-called fixed-rate mortgages with a term of only five years turn into ARMs afterward, so if a true fixed-rate mortgage is what you want, be sure to double-check with the lender that the rate will remain fixed for the entire lifetime of the loan.

When Is a Fixed-Rate Mortgage the Right Choice?

Fixed-rate mortgages offer long-term predictability, which can be a must for those who need budget stability.

Furthermore, fixed interest rates can be beneficial for those who plan to stay in their home for a longer period of time—say, at least seven to 10 years.

That way, homebuyers are less likely to miss out on building equity, as they might if they sold the house after making higher interest payments for a shorter period of time.

Finally, if homebuyers suspect that interest rates are about to rise, a fixed-interest loan can be a good way to protect themselves from those increasing rates over time.

That said, there are some instances in which an ARM may be a better choice. If a homebuyer is planning to sell in a short amount of time, for example, the low introductory interest rate on an adjustable-interest loan could save them money.

Distinctions in Types of Mortgages

Now that we’ve covered fixed-interest mortgages, let’s take a brief look at the other types of mortgages buyers may encounter when they’re shopping for a home loan.

Nitty-Gritty of ARMs

While we’ve referred to ARMs throughout this post, there are other factors to understand about these types of loans when making your decision.

Some ARMs set a cap to limit how high your interest rate can rise, no matter how high the index may go—though this isn’t always the case. Conversely, some ARMs include an interest rate limit on the low end as well, meaning your rates can never go below a certain amount.

An ARM may be easier to qualify for than a fixed-interest mortgage. One reason could be an applicant’s debt-to-income ratio. Someone with a ratio on the high side may be approved based on the lower initial payments of an ARM.

ARMs may also help buyers take advantage of falling index rates without refinancing, as they would have to if they’d taken out a fixed-interest loan.

Conventional Loans vs. Government-Insured Loans

Another important distinction in mortgage types is whether or not the loan is backed by the government.

Conventional loans—those offered by private banks and lenders—are most common, and do not include any kind of government insurance. Government-insured loans, such as Federal Housing Authority or VA loans, are subsidized by the government and may carry more flexible terms and achievable eligibility requirements.

For example, when pursuing a conventional loan from a private lender, the minimum down payment is typically around 5% (and may be higher).

But with FHA loans, applicants may qualify for a 3.5% down payment even with a credit score of 580. (That said, mortgage insurance may be required in both cases, which can significantly increase overall monthly housing expenses.)

Conforming vs. Non-Conforming Loans

Mortgages can also be considered “conforming” or “nonconforming,” depending on whether or not they meet the guidelines established by the Federal Housing Finance Agency (commonly known as Fannie Mae and Freddie Mac). In 2020, the conforming loan limit for one-unit properties was $510,400, or $765,600 in areas deemed “high cost.”

Of course, homes costlier than these limits exist, and it is possible to take out mortgage to buy one. Those loans are considered “nonconforming” and are also sometimes called “jumbo loans.”

Because the loans are so large, eligibility requirements tend to be more stringent, with borrowers needing a down payment of at least 10% and a solid credit score.

A Lender Worth a Look

When you’re in the market for a home, shopping for the right loan is almost as important as shopping for the house itself.

Although there are many mortgage lenders to choose from, including government-insured options, SoFi® offers competitive rates on conventional, fixed-rate mortgages with terms ranging from 10 to 30 years.

SoFi® offers loans with a down payment as low as 10%, and a mortgage loan officer can guide you through what can be a complicated process. Members can rest assured that questions they have will be answered by professionals who are just a phone call away.

Along with offering initial mortgages, SoFi® also helps homeowners who are looking to refinance in order to save money on interest over time or obtain lower monthly payments.

There are no hidden fees.

Ready to learn your rate? Check out SoFi® fixed-interest home loans today.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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Tips for Buying in a Hot House Market

Buying a home in a competitive real estate market isn’t for the faint of heart.

It can mean seeing more homes than usual, putting in many offers, and doing more legwork than if the market were softer.

That doesn’t mean, though, finding the perfect home and getting a great deal can’t be done. Here’s what shoppers, first-time buyers or not, need to know to navigate a hot market and win their dream home in a sea of competition.

What Exactly Is a Hot Market?

To put it in its simplest terms, a “hot market” is one when real estate inventory is low and demand is high, meaning many other buyers are looking to purchase a home as well.

It can often mean that homes enter the market and stay only briefly before selling at or above asking price. In general, if homes remain for sale for four to six months, it’s a balanced market of buyers and sellers.

However, if homes are selling faster than that, say in mere days or weeks, it’s typically considered a hot—or seller’s—market. If homes are sitting for longer than that, it’s regarded as a buyer’s market.

A hot market can come and go pretty quickly, fueled by job growth, new construction, and appeal to millennials, according to Realtor.com ’s 2019 Top Markets for Homebuyers report. Destinations that made that list included Lakeland, Florida; Grand Rapids, Michigan; El Paso, Texas; Chattanooga, Tennessee; Phoenix; Bridgeport, Connecticut; Las Vegas; Boise City, Idaho; Miami; and Boston.

A hot market may sound tough to enter, but there are a few ways buyers can stand out from the pack and, with luck, win over a seller.

Check out our local real estate market trends to
discover popular neighborhoods,
market demographics, and more.

Hot House Market Buying Tips

1. Hiring a Non-Tepid Agent

Hot market or not, a great agent can make all the difference in the homebuying process. An agent can help a buyer navigate choppy waters and will be the person buyers can turn to with questions about the market, the homes they are looking at, and much more.

A buyer’s agent is legally bound to help the buyer. A good agent will know what to look for in a home, may be able to recommend new neighborhoods buyers haven’t thought of, and can steer shoppers to good deals and away from bad ones.

2. Listing Musts and Wants

In a hot market, buyers may need to be more flexible about their ideal home and location. Before looking at homes, it might be wise to create a list of “must-haves” vs. “nice to have” items.

If buyers know they can’t live without at least two bedrooms and two bathrooms, they should put that on their “must have” list. If they would like to have an in-home office but don’t need it, they can add that to the “nice to have” list.

It will probably help buyers to go through every item—garage, square footage, yard space, fireplace, schools—and draw their line in the sand. If a home doesn’t have everything on their “must” list, they can move on quickly. But if a property meets all the “musts,” perhaps it can have the “nice to have” items later via renovations.

3. Adding Sweeteners to an Offer

In a hot market, adding a few perks to a home offer can further tempt the seller because every little bit helps when there is the potential for multiple offers.

For example, sellers eager to move on could be enticed to go with buyers who can act quickly. To offer a quick close, buyers can ask their real estate agent to find out the standard closing time for the home and add to their offer that they are willing to close faster.

4. Offering All Cash

This most certainly isn’t an option for everyone, but if a buyer can offer all cash for a home, this may be the thing that tips the odds in their favor of winning a bid.

Sellers typically prefer all-cash offers because they present fewer hurdles than buyers who are going with a lender. Financing issues account for 27% of delays in closing contracts, according to the 2020 Realtors Confidence Index Survey .

“Cash is king,” maybe you’ve heard. With a cash offer, there is no waiting for pre-approvals or approvals.

5. Waiving Contingencies

Looking to stand out further? Buyers could try waiving contingencies where they can.

There are lower risk contingencies people can waive, such as homeowner association contingencies, but there are also higher risk ones for buyers that could convince a seller to choose their offer.

For example, buyers can waive their right to an inspection. This means they will not require a professional inspector to check over the home for potential repairs. By waiving this contingency, though, buyers will be purchasing a home with many unknowns and taking on the full risk of a home that may need hidden repairs.

Nearly 20% of successful offers submitted by Redfin agents in select major U.S. markets waived the inspection contingency in mid-2020, and nearly the same percentage waived the appraisal contingency, Redfin reported.

Before waiving any contingency, it’s a good idea for buyers to have a long talk with their agent to ensure they are still protecting their rights and feel comfortable with any consequences.

6. Giving It a ‘Best and Final’ Offer

In a hot market, odds are buyers won’t win any bids that are under asking price. If the house is right when it comes time for the best and final offer, buyers may want to consider trying to give it their all. That would mean coming in at asking, and sometimes going over.

This is an important consideration when looking at homes in a hot market. Buyers may want to look at homes under their very top budget so they have room to negotiate up to, or over, asking.

Again, like contingencies, buyers should never go into a price range they are uncomfortable with or cannot afford in the long run. (Want to see how much a home could cost over the lifetime of a loan? Check out SoFi’s mortgage calculator to get an idea.)

7. Writing an Epic Letter

There is one more way to try to win a seller over: by pulling on their heartstrings.

When putting in an offer, many real estate agents advise their clients to write a short letter to the seller on why they want to purchase the home.

Remember, selling a home can be emotional, and letting go of all the memories built in the space can be hard on the seller. But if they know that the next person to live in the home will love it as much as they do, they may be more willing to part with the property.

Buyers might want to express what they love about the home and how they plan to continue making happy memories there. As a bonus, buyers can try including a picture of their family with the letter so the seller thinks of them as people rather than just an offer.

8. Not Getting Discouraged

In a hot market, it’s important to stay patient. Going through the process could mean putting in multiple offers on multiple properties and losing out more than once.

According to Realtor.com, the average homebuyer visits 10 potential homes in 10 weeks before finding the right one. Give it time and stay focused on the prize.

Having Your Finances in Order

Before putting in an offer on a home in a hot market, it’s a good idea for buyers to have all their fiscal ducks in a row. That could mean shopping for the lender that’s right for them and/or getting a pre-approval letter to show they are serious buyers.

Different lenders will likely offer different rates, terms, and perks, which buyers can weigh to decide which mortgage lender is right for them.

With SoFi® a buyer could qualify for a home loan with as little as 10% down, get a competitive rate, and seal the deal.

It takes just two minutes to get pre-qualified online.

Shopping for your dream home? Looking into a SoFi® mortgage is a great place to start.

SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.


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Using a Co-Borrower on Your Loan

Qualifying for a loan is sometimes easier said than done. Just because you need a mortgage to buy your first home, or a personal loan to consolidate and pay off credit card debt, doesn’t mean a lender is going to magically understand and give you the exact loan and interest rate you want.

Thankfully, if you’re struggling to qualify for a loan, you can have a friend or family member step in to help. Essentially, you can leverage their income, credit score, and financial history to help you get a loan that’s right for you.

The downside is that this type of borrowing (as in, borrowing money with another person) can get a little jargon heavy. “Co-borrower,” “co-applicant,” and “co-signer” are all terms that are going to come up. Here’s briefly what they mean:

A loan co-borrower basically takes on the loan with you. Their name will be on the loan with yours, making them equally responsible for paying back the loan. They will also have part-ownership of whatever this loan buys—for example, a co-borrower will own half of the home if you take out a mortgage with a co-borrower.

A co-applicant is the person applying for the loan with you. Once the loan is approved, the co-applicant becomes the co-borrower.

A co-signer can help you qualify for a loan, but isn’t your partner on the loan like a co-borrower. A co-signer’s financial history and credit score is factored into the loan decision, but they do not have ownership over the loan, and would only help make your loan payments if you were unable to make them.

We’ll dig a little deeper into co-borrowers and co-signers to help you decide which is right for you.

How does signing a loan with a co-borrower work?

Co-signing helps to assure lenders that someone will be able to pay back your loan. You typically use a co-signer with a stronger financial history than you, which can help you get a loan you might not qualify for on your own (or for better terms than you may qualify for on your own). Lenders might be more comfortable lending to you if your co-signer has a strong credit score and a dependable income, but loan underwriting criteria (that is, the personal financial factors used to determine who gets a loan at what rates and terms) differ from lender to lender.

For example, a parent with a stronger credit history might co-sign their child’s mortgage, allowing the child to get a lower interest rate on their mortgage than they would have on their own. The parent wouldn’t own the home, but they would have to make mortgage payments if their child couldn’t.

When might it make sense to have a co-signer rather than a co-borrower?

People typically consider a co-signer when they know they can’t qualify for a loan on their own, whether because they don’t have enough credit history, their credit score isn’t great, or they don’t earn enough to qualify for a desired loan (among other factors). A co-signer acts as a safety net if you’re unable to make payments on the loan.
When might it make sense to have a co-borrower?

Let’s go back to the example of a parent helping their child qualify for a mortgage loan. If that parent was a co-borrower instead of a co-signer, they would own the home with their child in addition to being equally responsible for the monthly mortgage payments.

Typically, spouses co-borrow when buying property, or if they are taking out a home improvement loan for a remodel. You and your co-borrower may qualify for a larger loan than if you were to take out a loan solo, and this way, you both own the investment and are responsible for loan payments.

The great thing is that some companies, like SoFi, now allow qualified individuals to co-borrow on low interest personal loans. That means you and your co-borrower (whether they’re your spouse, friend, or a member of your family) may be able to qualify for an even better interest rate and fund your financial goals that much more easily.

It is a big decision to take out a loan, so it may be a good idea to make sure that your co-borrower and yourself are 100% ready to take on this financial commitment. Both of you will be on the hook for payments, therefore, creating a plan of action for paying off the loan could potentially help.

Thinking about co-borrowing on a personal loan to make your personal financial dreams a reality? Check out your rate on a SoFi Personal Loan in minutes.

SoFi Mortgages not available in all states. Products and terms may vary from those advertised on this site. See SoFi.com for details.

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The Top Home Improvements to Increase Your Home’s Value

Thinking about installing a new deck, replacing a front door, or even adding an entire master bedroom to your home to help increase its resale value? Considering that your home is one of the biggest investments you’re likely to ever make, it makes sense that you’d be interested in increasing its value through remodeling.

This is especially true if you have plans to eventually sell your home, whether immediately or further into the future. But as you probably guessed, not all remodeling projects are created equal when it comes to their anticipated return on investment (ROI).

There’s no perfect formula for increasing your home’s value through remodeling. However, you can make an effort to choose financially beneficial projects if your primary concern is getting the best return on your investment.

Using Remodeling Magazine’s Cost vs. Value 2020 report , which compares the average cost of 22 remodeling projects in 101 housing markets, we’ll cover some of the most popular home improvements, based on estimated ROI. And we’ll include a breakdown of the estimated time and costs involved in each project.

For additional information on remodeling project ROI, use this https://www.sofi.com/home-project-value-estimator/ to get an idea of what value each project could add to your home.

Things to Consider Before Starting a Home Improvement Project

Before diving in, it’s important to understand that the decision to remodel requires more consideration than relying on what national averages for remodeling ROI tell us. For one, both costs and preferences for amenities and styles vary by geographic location.

You might also want to consider hiring a general contractor, real estate agent, or an appraiser to come to your house and give an opinion on what remodels could provide the most value for your money spent.

But for most people just figuring out the average ROI isn’t the only consideration. Many folks remodel their homes because they want to upgrade or add a specific feature or amenity for their own immediate needs, with the hope that it will increase a home’s value in the long run.

If this is the case for you, you’ll want to consider the trade-off between what you want and need, how much you are willing to spend, and what the potential ROI could be.

For example, if you really need to add an additional bathroom, it could be worth the cost even though the Cost vs. Value report we’re using to estimate ROI for this article says that you’ll only recoup 54% of your expenses for your project.

Top Home Improvement Projects to Help Increase Your Home Value

Garage Door Replacement

Average Cost: $3,695

Costs Recouped: 94.5%

General Time Commitment: A few days

Removing an old garage door and replacing it with an attractive, sturdy new one could return nearly every dollar of your initial investment, according to the Cost vs. Value report. It’s an effective way to improve your home’s appearance from the outside while increasing your home’s functionality for years to come.

With an average cost of $3,695, which includes the door and the cost of labor, it’s also a relatively affordable renovation. While most folks would likely hire someone to help install the new garage door, it is something that you could potentially do on your own (with the help of a friend).

This would be a project you could do in a weekend. If you hire someone to install the door for you, they will likely come to your home twice: First, to take measurements and give you a quote, and then again to install the door.

Manufactured Stone Veneer

Average Cost: $9,357

Cost Recouped: 95.6%

General Time Commitment: One month

Removing the vinyl siding and adding a stone veneer to the bottom third of your home’s street-facing façade is an effective way to help increase the value of your home, returning 95.6% of the cost of renovation. First impressions matter when it comes to selling a home, and stone veneer is a popular look right now.

Whether you tackle this project yourself or hire a handyperson to help with the installation, this project will take several days to complete. If you hire someone, understand that the construction days might not be successive, so the exterior of your home could be under construction for several weeks to a month.

Minor Kitchen Remodel

Average Cost: $23,452

Cost Recouped: 77.6%

General Time Commitment: Four to eight months

Whereas the Cost vs. Value study reports that major kitchen remodels ($68,490-$135,547) recoup only 58.6%-53.9% of costs ($40,127-$72,993), a smaller remodel appears to do a better job at retaining the value of the dollars put into the project.

A minor remodel includes things like replacing cabinet fronts with new shaker-style wood panels and drawer fronts, replacing the cooktop, oven range, and refrigerator with new models, replacing the countertops and floors, and installing a new sink and faucet. To stay on budget, consider using mid-priced appliances.

It would be very difficult to make it through a kitchen remodel without the help of experts, such as electricians, plumbers, and contractors, so you may have to put some extra effort into coordinating. You’ll also want to be realistic about how long you can devote to the project — and be without a working kitchen. Expect several months at minimum for a kitchen remodel.

Wood Deck Addition

Average Cost: $14,360

Cost Recouped: 72.1%

General Time Commitment: Three to six months

Nothing beats enjoying family and friends on a deck in your backyard on a sunny day. Potential buyers are typically rightfully happy to pay extra for a deck, and a wooden deck installation could recoup 72.1% of what you spend.

Ideally, you’ll also get the chance to enjoy the deck before you sell your home.

Understandably, a deck installation is a pretty large project, by both dollar cost and the cost of effort. You’ll likely want to hire the help of a designer or architect to map out an initial plan, and a contractor to do the building work.

You can attempt to do the project yourself, but be certain that you know how to build a deck that will pass an inspection and adhere to your city’s building codes. In considering whether this is a good investment, remember that building a deck may increase your property taxes and home insurance.

Check out this Home Improvement Cost Calculator to find out an estimate on how much each renovation project could cost.

Entry Door Replacement (steel)

Average Cost: $1,881

Cost Recouped: 68.8%

General Time Commitment: One week

A new, safe front entry door is an attractive quality to prospective homebuyers. Replacing your entry door and jambs with a steel door, “including clear dual-pane half-glass panel, jambs, and aluminum threshold with composite stop,” should get you a good bang for your buck, according to the Cost vs. Value report.

Of all the projects covered by the Cost vs. Value report, this one should take the least amount of time and effort. You can do it yourself (preferably with an extra set of hands) or hire an installation expert. If you go this route, you can have them come to your home to do the initial measurements and return for the installation, or you can measure and order the door yourself, and just get help with installation.

Remodeling Projects With the Lowest Potential ROI

Master Bedroom or Bathroom Addition

Average Cost: $136,739 for midrange, $282,062 for upscale

Cost Recouped: 58.5% for midrange, and 51.6% for upscale

General Time Commitment: Four to eight months

The Cost vs. Value report considers master bathroom and bedroom additions in both midrange and upscale homes, and neither returns much more than half of the initial investment. While not a great return, a home addition project of this size does offer a larger overall change to the value of your home.

For example, a $300,000 home that adds a master suite for $136,739 could potentially return about $80,000 on the investment. A home that sells for $380,000 instead of $300,000 is a 26% increase in the home’s value. If you were to get enough use from the addition to justify the other cost you can’t recoup, it could still be a fine investment.

Again, these figures are purely hypothetical, and the value of expanding your home can depend on a multitude of factors.

Bathroom Addition

Average Cost: $49,598 for midrange, $91,287 for upscale

Cost Recouped: 54% for midrange, 54.7% for upscale

General Time Commitment: Four to eight months

A regular bathroom remodel is not as costly as a master bathroom addition, and it boasts a slightly better potential ROI. Again, a bathroom addition or any large remodeling project should be considered in terms of both ROI and what you want to get out of your home while you are living in it.

And that’s a calculation that only you and your family can make — consider your potential usage and whether it makes the difference between staying and having to relocate to a larger home, which would also come with its own set of costs.

Making it Happen

As you can tell, determining the best home improvements for your personal situation usually requires more consideration than simply looking at current home remodeling ROI trends, though ROI numbers can definitely help inform your decision.

You also have to consider what you need and want out of your current home, and whether both the relative and absolute cost of taking on a big project is worth it.

Your time and personal efforts should be considered as well. In an ideal world, you’d settle on a project that will allow you to maximize the enjoyment you get out of your home while also adding ROI value.

Ready to go on a remodeling project for your home? With SoFi’s Home Improvement Loans, you could make your home improvement dream a reality.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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How Much Does it Cost to Reface Cabinets?

Buying a home means knowing you could walk into a large number of expenses: from basic costs to aesthetic ones. And while you might love your home as it is when you move in, you might also consider changing things up once you’ve settled in.

Let’s talk about an area you probably spend a lot of time in: your kitchen. Whether you’re cooking for yourself or entertaining guests, you most likely want this space to feel welcoming and aesthetically pleasing. If you’ve been wondering how to change the look of your cabinets, you may be considering cabinet refacing.

When it comes to kitchen cabinet refacing, it’s important to do some research before getting started. If you’re wondering “what is cabinet refacing?” let’s break it down: refacing allows you to change the look of your cabinets without replacing them completely.

That means you keep the bare-bones structure of your cabinets but change the look and perhaps some of the smaller pieces.

Whether you’ve just moved into a new home or want to breathe new life into your current one, refacing cabinets in your kitchen or dining space could really transform the space.

Reasons to Reface

According to HouseLogic , refacing your cabinets might actually save you money. That’s because refacing your cabinets generally only costs about half as much as replacing them entirely. It also creates less disruption in your home in general, since you don’t need to do an entire overhaul.

First off, you should make sure that your base is strong. If your cabinets end up needing more work later, it might be beneficial to just make all of those improvements now. If you see any other major work that needs to be done, now might not be the best time to consider refacing.

For example, if you need to improve the condition of the drawers, that might be an issue to tackle before considering refacing.

A minor kitchen remodel like refacing might be one of the most useful home improvement projects to increase the value of your home. This could potentially be impactful.

Think of it as an investment into not only your current living situation, but perhaps your future one if you consider selling this house. In that case, the refacing kitchen cabinets could be worth the investment in the long run.

Standard Options for Refacing

Wood Veneer

The look of wood veneers can really revamp your space by making your cabinets look as if they are made of certain types of wood. Refacing your cabinets with wood veneer, however, is the priciest choice of the available options.

According to HouseLogic, this can cost between $2,500 to $6,000 . The overall refacing kitchen cabinets cost depends a lot on what materials you choose.


You can also choose plastic laminates or melamine-based laminates for your cabinets. The laminate is glued to the cabinet and the excess is then trimmed off. This project can often be done by smaller shops or even some handy DIY-ers.

These can often be more affordable but can run the risk of chipping. According to HouseLogic , refacing your kitchen cabinets with a laminate material will cost around $1,000 to $3,000.

Rigid Thermofoil (RTF)

This vinyl-material is often confused with laminate, but it’s made up of different materials and installed with a different method—generally by using a large vacuum press to fuse the thermofoil over the cabinets.

Using this material will yield cabinets that are fairly moisture resistant, although they won’t be the most heat resistant. RTF cabinets are also fairly easy to keep clean.

If you’re still weighing your options, consult a professional for some guidance to see which option is best for your space.

Working On Your Budget

When thinking about the question of money—how much it costs to reface cabinets—quite a few factors can come into play. It’s often beneficial to think about your budget sooner rather than later. You don’t want to be halfway through your project only to realize the costs are higher than what you can realistically spend.

If you are living with a partner, sit down with them and open up the topic of budgeting for this project. Talk about your mutual goals; establish what you feel comfortable setting as the overall cabinet refacing cost.

If you are looking for a starting point, consider using SoFi’s Home Improvement Cost Calculator. This easy-to-use tool just requires you to input some basic information about your home and your possible project.

For example, you could indicate that you want to do a basic update on your medium-sized kitchen. Say you live in the 90013 zip code and the house was built in 1980. The calculator will give you a rough estimate of your kitchen project.

One thing to keep in mind: this total amount also includes a 20% margin for contractors. Consider doing the same when creating your budget from scratch.

Long Term Goals

Refacing your cabinets might feel like a small project with short-term effects but in reality, the changes you make to your home now can help you in the long run.

Consider using tools like SoFi’s Home Improvement ROI Estimator to get a sense of which home improvement projects could help increase the value of your home.

Getting Started

Now it’s just a matter of figuring out when you want to start this project. Some homeowners plan out their remodeling project for the winter season, when more contractors might be available.

HouseLogic states that the process takes around two to four days , so keep that in mind when trying to find a good time as well. Research professionals in your area who can do it for you, or consider finding more information on how to do it yourself.

Whatever your decision, have fun with the project and know that it will potentially add value to your home in the long run.

Financing Your Home Improvement

If you’re officially ready to get started on this home improvement project, but you are short on cash, you could think about the possibility of taking out a personal loan to offset the costs. You can get a quote, apply online, and get your funds in as little as three days.

SoFi personal loans are unsecured and completely fee-free, with no origination fees or pre-payment penalties. To get an idea of what your loan could look like, take a look at SoFi’s personal loan calculator.

Check your home improvement loan rate in two minutes.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.


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