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Want to know how to pay off a 30-year mortgage in 15 years? A homeowner can use one of a few strategies to pay off a home loan early and save a boatload of interest.

Here’s what you need to know about how to pay a 30-year mortgage in 15 years and what to consider before you do.

Paying Off a 30 Year Mortgage Faster

When you start paying on a 30-year mortgage, most of your payment will go toward interest rather than the principal (the amount you borrowed). This makes it hard to pay down your mortgage and build equity.

Over time, the percentage of your payment that goes toward interest vs. principal will change. Toward the end of your 30-year loan, you will pay more toward the principal than interest. This is what’s known as mortgage amortization.

Instead of following the amortization schedule, paying more on your mortgage — in one way or another — will reduce the principal more quickly, which means you’ll pay less interest on your loan.

Should You Pay Off Your Mortgage Faster?

Paying off your mortgage faster may give you a sense of accomplishment and save you a lot of money in interest charges, but if it takes you further away from your financial goals, it may not be worth it to you. Consider what you value most before deciding to put extra money toward paying off your mortgage.

Recommended: Is is Smart to Pay Off a Mortgage Early?

Pros and Cons of Paying Off Your Mortgage Early

Paying off a 30-year mortgage in 15 years has benefits, but in some cases, it may not make sense to. Consider these pros and cons.

Pros	Cons
	Higher monthly payment
Own your home outright sooner	You will lose the home mortgage interest tax deduction (if you itemize)
Ultimately no mortgage payment
Build equity faster	Less money available for retirement, higher-interest debt, a rainy day fund, etc.
Save money on interest	Gains by investing could trump interest saved

Factors to Consider Before Paying Off Your Mortgage Faster

While paying off your mortgage early — a few zealous borrowers aim to pay off a mortgage in five years — can save you tens of thousands of dollars in interest, the lost opportunities from not having money readily available for other things could be more valuable. Think about:

•   Have I been contributing enough to my retirement plans as an employee?

•   Have I been funding retirement as a self-employed person?

•   Do I have three to six months of expenses, or more, if my personal situation calls for it, in an emergency fund?

•   Am I able to secure a lower rate or shorter term for a refinance to pay off my mortgage faster? Would a cash-out refinance make sense?

•   Do I have higher-interest debt like credit card debt or student loans I should tackle first?

•   Have I set up a college fund for the kids?

•   Does my mortgage carry a prepayment penalty (unlikely for loans originated after January 2014)?

How to Pay Off a 30-Year Mortgage Faster

There are at least three methods to pay off a 30-year mortgage in 15 years if that’s your goal.

Make Extra Principal Payments

Paying more toward principal is the primary way to pay off a 30-year mortgage early.

Here’s an example of how interest adds up: Assuming you buy a $350,000 house and put 10% down on a 30-year mortgage at 5.5%, this mortgage calculator shows that total interest will be $328,870. Even by the 120th payment, you will have paid only $55,000 of the $315,000 principal and will have paid nearly $160,000 in interest.

Putting just $200 more per month toward principal, you’d save $80,837 in interest and pay off the mortgage six years and four months earlier.

Switch to Biweekly Payments

Biweekly payments are half-payments made every two weeks instead of a full payment once a month. Making biweekly payments instead of monthly payments results in one additional payment each year.

Using the example above, making one full, extra mortgage payment each year will reduce the amount of time it takes to pay off your 30-year mortgage by five years.

Look Into Refinancing

Refinancing your loan into one with a lower interest rate and/or a shorter term can help you pay off your mortgage faster. A shorter term usually comes with a lower interest rate, so you’re saving on interest while also paying your mortgage off sooner than 30 years.

Refinancing to a lower interest rate will reduce your monthly mortgage payment, so if you continue to make the higher payment, you’ll pay your mortgage off faster.

Recommended: Mortgage Questions for Your Lender

The Takeaway

There are a few ways to pay off a 30-year mortgage in 15 years. Paying off your mortgage early will result in substantial interest savings, but the tradeoff for many borrowers is not having extra money to put toward retirement and other purposes.

Whether you’re on the path to paying off your mortgage or shopping for a new mortgage, SoFi is here to help. SoFi offers traditional refinancing and cash-out refinancing. SoFi Mortgages come with competitive rates, flexible terms, and Mortgage Loan Officers who can help.

Take a look at SoFi home mortgage loans, and then get your own rate quote.

FAQ

Is it cheaper to pay off a 30-year mortgage in 15 years?

The amount of interest you’ll save by paying off your mortgage in 15 years instead of 30 is substantial.

Why shouldn’t you pay off your mortgage early?

Homeowners who haven’t fully funded their retirement accounts, who don’t have an emergency fund, or who have other debt with high interest rates may not want to pay off a mortgage early. Also, those who think they can earn a better return on their money with investments may not want to pay off their mortgage early. (They need to keep in mind that past performance is not necessarily indicative of future returns.)

How do you pay off a 30-year mortgage in half the time?

Paying more toward the principal early in the mortgage can help you cut the amount of time you spend paying on your mortgage in half. The good news is you don’t have to make double payments to cut the amount of time you pay on your mortgage in half. Because each payment will reduce the principal, you will pay less overall.

Are biweekly mortgage payments a good idea?

Biweekly mortgage payments, or half-payments made every two weeks, will add a full mortgage payment every year. Using this method can take a few years off your mortgage.

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Photo credit: iStock/everydayplus

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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If you plan to take out a $300,000 mortgage, the costs of the loan can vary considerably based on your rate, term, property tax and insurance costs, and whether you need mortgage insurance.

Read on to learn how much a $300,000 mortgage could cost over the life of the loan.

What Are the Monthly Payments on a $300k Mortgage?

In April 2022, Redfin found that the monthly mortgage payment on the median asking price home had risen 39% from a year earlier, thanks to rising mortgage rates.

Ouch. But calculating the average monthly payment on $300,000 mortgages is not straightforward.

The lower the interest rate, the lower the monthly mortgage payment, holding other loan terms constant. The interest rate can be calculated differently for different types of mortgages. For instance, fixed-rate mortgages maintain a steady interest rate, whereas an adjustable-rate mortgage fluctuates over time based on market conditions.

The mortgage term also affects mortgage costs. The 30-year fixed-rate mortgage is by far the most popular choice, but a 15-year loan translates to a higher monthly cost for a $300,000 mortgage yet much less total interest paid.

Owning a home comes with annual property taxes based on the local tax rate and the home’s assessed value, which can change over time. Generally, this expense is divided across your monthly mortgage payments.

Your down payment also matters. Borrowers putting less than 20% down on a conventional mortgage usually need to pay for private mortgage insurance, often 0.5% to 1.5% of the original loan amount per year, until the mortgage balance reaches 80% (homeowner requests cancellation) or 78% of the home’s value, or the mortgage hits the halfway point of the loan term.

FHA loans require mortgage insurance premiums, which will last for the whole loan term if your down payment is less than 10%. MIP ranges from 0.45% to 1.05% of the loan balance, divided by 12 and added to your monthly payments.

Homeowners insurance is typically required by mortgage lenders regardless of the down payment amount.

How Much Income Is Needed to Qualify?

When taking out a home loan, lenders often ask for proof of consistent income, such as W-2s. But income is just one aspect of your personal finances a lender will evaluate to determine if you qualify for a mortgage on a $300,000 house.

Lenders use borrowers’ debt-to-income ratio to get a more holistic assessment of their ability to make monthly payments. DTI is calculated by dividing your monthly debt payments by your gross monthly income, then coming up with a percentage.

For example, if you gross $5,000 a month and have a $400 car payment and a $600 student loan bill, your DTI ratio is 20%.

A DTI ratio of 43% is usually the highest a borrower can have to obtain a qualified mortgage, according to the Consumer Financial Protection Bureau. However, lenders may prefer a lower DTI ratio — usually below 36% — for greater certainty that borrowers can afford their mortgage payments.

Programs like the FHA loan and Fannie Mae HomeReady® loan allow a DTI of up to 50% when compensating factors like a higher credit score exist.

Your credit history is another important factor to qualify for a mortgage on a $300k house, and will determine the rate you’ll pay.

How Much of a Down Payment Is Needed?

So how much do you have to put down for a $300k mortgage? The traditional ideal of a 20% down payment is not always necessary or doable. In fact, the latest median down payment is 13%.

How much you need for a down payment depends on the mortgage type, the lender, and if you’re planning to occupy or rent the property.

This is how much you’ll need to put down for different loan types.

•   Conventional loan: As little as 3% down for a primary residence. Buying a second home or investment property typically calls for at least 10% down and 25% down, respectively.

•   FHA loan: As little as 3.5% down if your credit score is 580 or higher. Borrowers with lower credit scores will need to put down at least 10%.

•   VA loan: Usually available with no down payment. This option is only available for active and veteran service members and some surviving spouses.

•   USDA loan: No down payment required. Eligibility is based on income and buying a home in a designated rural area.

But do down payment requirements change for different types of houses?

If you’re planning on buying a duplex or up to four units, you’d still qualify for residential financing, with the same parameters, if you plan to live in one of the units.

Recommended: A Guide to Buying a Single-Family Home

What Are the Parts of a Mortgage Payment?

What you pay to your lender each month includes more than just what you owe on the loan. The mortgage payment consists of the principal, interest, and potentially, escrow costs.

Principal

The principal portion of the mortgage payment goes toward gradually paying the amount initially loaned to you.

When you start making mortgage payments, the amount paid toward the principal is somewhat low. Over time, greater proportions of each monthly payment will chip away at the principal balance.

Interest

The interest rate — how much you’re being charged to borrow the money — is determined by the type of loan, your personal finances, and market factors outside your control.

Borrowers with high credit scores are usually able to snag the best rates. Just a 1% increase in mortgage rate can add tens of thousands of dollars over the life of a 30-year loan.

The bulk of the mortgage payment goes toward interest at the beginning of an amortized loan.

You may be able to recoup some of the interest cost through the mortgage interest deduction.

Escrow

Most lenders require an escrow account to roll tax and insurance bills into monthly mortgage payments. This includes property taxes, homeowners insurance, and, if applicable, mortgage insurance.

How Much Interest Will Be Paid on a $300k Mortgage?

If you have a fixed-rate loan, the total interest can be easily calculated for the life of the loan. Borrowers with a 30-year fixed-rate mortgage at 5.6% APR would pay about $320,000 in interest on a $300,000 home loan.

Shortening the loan term to 15 years and getting a rate of 4.8% APR would reduce the total interest paid to $121,302.

With an adjustable-rate mortgage, the interest rate can change over time with market conditions.

Try out this mortgage payment calculator to see how much you might pay in interest with different rates and down payments. You can also toggle the amortization chart on a desktop.

How Much Is the Mortgage on a $300k House?

Using the previous example of a 30-year fixed-rate loan with a 5.6% annual percentage rate, the principal and interest would be $1,720 per month, and would total about $620,000 over the 30 years. To capture the full mortgage cost, you also need to estimate the tax and insurance costs.

•   PMI (if applicable): often 0.5% to 1.5% of the original loan amount but up to 2.25%. Assuming a 1% rate, monthly PMI would be $250, with $21,303 the total amount of PMI you’d pay until you reach 20% equity.

•   Homeowners insurance: $2,305 on average annually, or $192 per month.

•   Property taxes: 0.28% to 2.49% of assessed value on average, depending on U.S. state. Most states have a homestead exemption that gives homeowners a tax break.

Recommended: A Guide to Mortgage Relief Programs

How to Get a $300k Mortgage

Prospective homebuyers can take steps to help qualify for a $300k mortgage and obtain more favorable terms.

•   Budget: First, it’s important to estimate how much you can afford.

•   Check your credit: Assess your credit history and take care of any late payments to improve your FICO® scores.

•   Get pre-approved: Starting the mortgage pre-approval process with one or more lenders gives you tentative approval for a loan amount and type, making you a more competitive buyer.

   Consider the interest rate, fees, and closing costs among lenders when shopping for a mortgage.

•   Make an offer: When you find a home that meets your needs and budget, consult with a real estate agent to submit an offer with your pre-approval letter.

•   Apply for the mortgage and get loan estimates: Now that you have a property address, you might want to request loan estimates from a number of lenders. A loan estimate is a three-page standard form that details the loan after you apply for a mortgage. Applying with more than one lender within 14 to 45 days counts as a single credit inquiry.

•   Choose a lender, and wait for the lender to verify your finances and appraise the property to underwrite the loan.

•   Close the deal: Get your cash to close and homeowners insurance ready and finalize the paperwork to close on your $300,000 mortgage.

Recommended: SoFi’s 2022 Home Loan Help Center

Where to Get a $300k Mortgage

The Consumer Financial Protection Bureau and others recommend getting quotes from multiple lenders. Buyers can choose from banks, credit unions, online lenders, and mortgage brokers to finance a home purchase.

While we’ve identified the interest rate and loan term as key information to compare, keep an eye out for fees paid directly to the lender, like origination fees and mortgage points.

The Takeaway

How much will a $300,000 mortgage cost you? The interest rate, loan term, insurance costs, and taxes will determine the amount you pay each month and over the life of the loan.

As you begin comparing lenders, give SoFi a look. SoFi fixed rate mortgage loans require as little as 3% down for qualifying first-time homebuyers.

Check your rate in just minutes

FAQ

How much is a $300,000 mortgage per month?

The monthly payment on a $300,000 mortgage depends on the loan length, interest rate, whether mortgage insurance is required, and more.

How much do I need to earn to get a mortgage of $300,000?

The required annual income to get a $300,000 mortgage is affected by your other debts and the down payment amount.

Can I get a $300,000 mortgage with a bad credit history?

You might be able to obtain a $300,000 mortgage with subpar credit, but the terms may be less competitive. For instance, borrowers with credit scores from 500 to 579 could be eligible for FHA loans, but they’ll have to make a down payment of at least 10% instead of 3.5%.

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Photo credit: iStock/Vertigo3d

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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Looking to buy a manufactured home, a boat, or a piece of equipment for your business? You may need a chattel mortgage.

Chattel mortgages are used to finance movable assets separately from the land they occupy. They come with a higher cost than a traditional mortgage, so manufactured home dwellers who qualify for a standard mortgage will save money by choosing that route.

Here’s what you need to know about how chattel loans work and when you might want to look for alternative financing.

What Is a Chattel Mortgage?

First of all, a chattel mortgage is used for personal property, not real property. Real property includes land and property that cannot be easily removed from the land.

When a chattel mortgage is used for a large, movable asset like a manufactured home — called a mobile home before June 15, 1976 — or a piece of equipment (the “chattel”), the asset is held as collateral on the loan. If the borrower defaults on the loan, the lender can recoup costs by selling the asset.

A chattel loan may have a lower interest rate than an unsecured personal loan but a higher rate than a traditional mortgage.

How Does a Chattel Mortgage Work?

Chattel mortgages are used in two main instances: when an asset can be moved or when the land the asset sits on, or will, is leased. (In fewer cases, a chattel loan may be used when a borrower doesn’t want to encumber their owned land with a loan, as when land is owned jointly in a trust.)

Applying for a chattel loan is similar to applying for other types of loans, such as home equity loans and personal loans. The lender will look at your creditworthiness and ability to repay the loan before making a decision.

Chattel loans are typically small, with relatively short terms, but usually require no appraisal, title policy, survey, or doc stamps.

What Are Chattel Loans Used For?

Here are some of the most common applications for chattel loans.

Manufactured Homes

Manufactured homes are built in a factory on a permanent chassis and can be transported in one or more sections. Formerly known as mobile homes, they’re designed to be used with or without a permanent foundation, but must be elevated and secured to resist flooding, floatation, collapse, or lateral movement.

Many are titled as personal property. Manufactured housing that is titled as personal property or chattel is only eligible for chattel financing.

When a manufactured home is titled as chattel, you’re also going to pay vehicle taxes to the Department of Motor Vehicles instead of property taxes.

Many consumers may encounter a chattel loan at the sales office of a manufactured home builder. They’re convenient with quick closing times, but come with a higher interest rate and a shorter term than most traditional mortgages.

This makes the financing cost of the manufactured home high, even if the payment is low thanks to the lower cost of a manufactured home compared with a site-built home. Around 42% of loans for manufactured homes are chattel loans, according to the Consumer Finance Protection Bureau.

When you own a manufactured home and rent the land it occupies, such as in a mobile home park, you will need a chattel mortgage, except when an FHA Title I loan is used.

Tiny Houses

A chattel mortgage may be used for tiny house financing when the tiny house is not affixed to a permanent foundation and/or when the land is leased.

Tiny houses are usually too small to meet building codes for a residential home, so even if the home is on a foundation and on owned land, a traditional mortgage is almost always out of the question. Even if Fannie Mae or FHA allows the property, the lender won’t.

Tiny houses on foundations are usually classified as accessory dwelling units.

Vehicles

A chattel loan may finance assets that are not permanently affixed to the property, such as vehicles. Dump trucks and construction vehicles may qualify.

Equipment

A chattel loan can be used to purchase large equipment for a business, such as a forklift or a tractor. Even livestock can be purchased with a chattel loan.

How Much Does a Chattel Mortgage Cost?

Chattel mortgages are more expensive than many other different mortgage types. The Urban Institute concluded that interest rates on chattel loans were several percentage points higher than on non-chattel loans. Owners of manufactured homes would spend thousands more per year in interest compared with a traditional mortgage.

These types of mortgages are not being purchased by Fannie Mae or Freddie Mac on the secondary mortgage market. When a conventional mortgage is purchased by one of these entities, the loan originator obtains more liquidity and can provide more loans to more people. This drives the cost of the mortgage down.

A chattel mortgage, on the other hand, must stay on the books of the lender, making the loan riskier and more expensive.

If you qualify, you might want to consider refinancing your chattel mortgage into a traditional mortgage.

Chattel Mortgage vs Traditional Mortgage

To qualify for a conventional or government-backed mortgage instead of a chattel mortgage, you must own the land your home sits on, the home must be permanently affixed to a foundation, and it must have at least 400 square feet of living space (600 for Fannie Mae’s conventional loan for manufactured homes).

Mobile homes built before June 15, 1976, will not qualify for a mortgage loan. A personal loan is about the only option.

You must also meet all other requirements set forth by the lender to qualify for a traditional mortgage. A mortgage calculator tool can help with this.

For some types of assets, a chattel mortgage may be a good option to consider. Take a look at the major differences.

Chattel Loan	Traditional Mortgage
For movable property only	Includes the land and all attached structures
May have a lower interest rate than an unsecured personal loan	Usually has a lower interest rate than a chattel mortgage
Shorter terms (e.g., 5 years)	Longer terms (e.g., 15 years, 30 years)
Lower origination fees	Higher loan fees
Shorter close time	Longer close time
Lender holds the title, which is only given to the buyer when it is paid off	Lender holds a lien on the property, not title

Pros and Cons of a Chattel Mortgage

A chattel mortgage is more expensive than a traditional mortgage, so anyone who can qualify for a traditional mortgage may wish to pursue that option first. It’s not all bad news for chattel mortgages, though, especially for other types of property where a chattel loan is desirable.

Pros	Cons
Lender only has a security interest in the movable property, not the land	If you default on the loan, the lender can take your asset. Also, the lender owns the asset until the loan is paid off
Taxes may be lower on property titled as “chattel” rather than “real” property	Higher-cost loan than a traditional mortgage
Possible faster close and lower loan fees than a standard mortgage	Fewer consumer protections. Chattel loans are not covered by the Real Estate Settlement Procedures Act or CARES Act
Lower interest rate than a personal loan	Higher interest rate than a traditional mortgage
Pays down more quickly than a traditional mortgage	Shorter term may create higher payments
Interest paid is tax deductible	Interest paid is also tax deductible with a traditional mortgage

Consumer Protection and Chattel Mortgages

Chattel mortgages on manufactured homes are a special concern to the Consumer Financial Protection Bureau because that type of housing:

•   Serves an important role in low-income housing

•   Is typically taken on by financially vulnerable people

•   Has fewer consumer protections

Manufactured home sellers often have an on-site lender where borrowers can walk away with a chattel loan the same day as the home purchase. In certain scenarios, though, better financing options might be available.

The Takeaway

Buying a manufactured home, a plane, or a dump truck? A chattel loan could be the answer. If, though, you are buying a manufactured home and own the land, a traditional mortgage makes more sense than a chattel mortgage.

Find answers to home financing questions at SoFi’s help center for mortgages.

3 Home Loan Tips

1. Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, allow fixed rate mortgages with as little as 3% down for qualifying first-time homebuyers.
2. Thinking of using a mortgage broker? That person will try to help you save money by finding the best loan offers you are eligible for. But if you deal directly with a mortgage lender, you won’t have to pay a mortgage broker’s commission, which is usually based on the mortgage amount.
3. Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.

FAQ

Where can I get a chattel loan?

Lenders specializing in chattel or manufactured housing loans will offer this type of loan.

How much does a chattel mortgage cost?

The interest rate of a chattel mortgage could be up to 5 percentage points higher than that of a standard mortgage loan.

What happens at the end of a chattel mortgage?

When a chattel mortgage is paid off, the borrower receives legal title to the property or asset borrowed against. It’s also possible for landowners with permanently affixed manufactured homes to refinance into a traditional mortgage to end their chattel loans.

Is a chattel mortgage tax deductible?

A chattel mortgage qualifies for the same tax deductions that a traditional mortgage does. This includes a deduction on mortgage interest paid throughout the tax year.

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Photo credit: iStock/MicroStockHub

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

SOHL0722013

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Guide. Supporter. Educator. A mortgage loan originator wears many hats while finding a residential loan that will work for a borrower and steering the prospective homeowner or refinancer through the whole process.

The person or entity is the original point of contact for borrowers. Their role is regulated to prevent the kind of mortgage fraud that occurred during the housing crisis and financial meltdown of 2008.

Here’s what you should know about what they do, how they’re regulated, and how they can help you get the right loan to the closing table.

What Is a Mortgage Loan Originator?

A mortgage loan originator (MLO) evaluates and recommends approval of residential loan applications on behalf of customers. Some work directly for a mortgage lender; mortgage brokers offer options from several lenders.

MLOs might be paid a salary plus commission, but commission only is far more common. They must be licensed in the states where they do business or under the umbrella of the bank, bank subsidiary, or credit union that employs them.

MLOs work to find a mortgage for each borrower’s unique situation. They must be excellent communicators since they guide people through the mortgage process.

They educate the borrower about different kinds of mortgages, the application process, and how mortgages work, and ensure legal compliance and completeness to close the loan.

Since MLOs often work on commission, it’s usually in their best interests to find a compatible loan for the borrower that will make it to the closing table. They don’t get paid if the loan falls through. To get your business, it’s also in their best interests to offer the most competitive terms possible.

What Is the Difference Between a Mortgage Loan Originator and a Mortgage Loan Officer?

The upshot: Regulators and some others refer to mortgage loan officers employed by financial institutions as “mortgage loan originators.”

A mortgage loan originator is anyone who negotiates or takes a residential mortgage application for a client with the expectation that they will be paid for their services.

What Does a Mortgage Loan Originator Do?

MLOs are responsible for taking a loan from application to closing. They may also negotiate terms of a residential mortgage on behalf of a client.

Responsibilities of a mortgage loan originator may include:

•   Processing the customer’s application

•   Explaining the different types of mortgages available to a borrower

•   Asking for documents on the applicant’s background and financial information

•   Keeping track of documents

•   Submitting documents to underwriting

•   Relaying messages from underwriting

•   Scheduling a home appraisal

•   Addressing any home appraisal issues with the client

•   Asking for more documents as closing gets nearer

•   Scheduling the close

•   Answering questions the borrower may have

•   Ensuring compliance with applicable laws

•   Developing relationships with real estate agents, builders, and individual clients

How to become a Mortgage Loan Originator

Becoming a mortgage loan originator typically requires a bachelor’s degree and on-the-job training. Nonbank originators also need to be licensed.

Licensing

MLOs who are employed by banks, bank subsidiaries, or credit unions do not have to obtain a loan originator license. All others must be licensed in the states they do business in and register with the Nationwide Multistate Licensing System & Registry (NMLS).

General state license requirements include:

•   At least 20 hours of pre-licensing education

•   Authorization to provide a credit report and criminal record

•   General character standards and demonstrated financial responsibility

•   Passing the NMLS written test

•   Sponsorship by a company already registered with the NMLS

Licensing became required in 2008 following the housing collapse. It increases consumer protection and reduces mortgage fraud.

Average Salary

The median pay for mortgage loan officers in 2021 was $63,380 per year, according to the Bureau of Labor Statistics.

But because mortgage loan originators typically work solely on commission, earnings can vary widely based on the area, the number of closed loans, and the amount of the closed loans. The commission averages 1% of the loan amount.

Do I Need a Mortgage Loan Originator?

A mortgage loan originator is needed when you need a new mortgage. Few mortgages are assumable by a buyer.

You will most likely need a new mortgage for your purchase or refinance and will need a mortgage loan originator.

How Do You Find a Good Mortgage Loan Originator?

A good mortgage loan originator may be able to secure a loan that works for your situation and aptly guide you through the process. Want to know how to find a good loan originator? Here are a few tips.

Shop Around for a Mortgage

One of your most powerful tools for finding a good mortgage loan originator is to shop around for a mortgage. Meet the people who will work with you on your mortgage and get loan estimates for the specific type of mortgage you’re looking for.

•   Ask for quotes from your bank or credit union. Your existing relationship with a bank may be valuable to them and they may offer good terms.

•   Get recommendations from family or friends. From people who have been there and done that, you may find an originator that has great rates and is incredible to work with.

•   Conduct an internet search. You’ll find plenty of mortgage loan originators listed on the internet with a bounty of reviews. Try calling a few and you may find a competent loan officer with competitive rates.

Compare a Direct Lender With a Mortgage Broker

When you’re looking for a good mortgage loan originator, you’ll come across two main ways to find a mortgage for your home: mortgage brokers and direct lenders.

•   Direct lenders are the providers of the mortgage. When you go to a lender and apply for a loan, you’re working directly with the lender, which makes a decision without a middleman.

•   Mortgage brokers work for borrowers to find the best loans and terms for their individual situations. They may be able to point clients to a lender they would not have known about otherwise and save them money in the process. Lender commissions to brokers may span 0.50% to 2.75% of the loan amount, but lenders typically add the costs to the borrower’s loan. It’s a good idea to check credentials with the NMLS.

Both can help get you a mortgage that may work for your situation, but you may find that you prefer one over the other when you’re looking for a good loan mortgage originator.

If you apply for a mortgage with several, it’s smart to compare the loan terms being offered in the loan estimate that you will receive.

Have an Idea of What Type of Mortgage You’re Looking For

Some lenders may specialize in a certain type of mortgage, so if you know what you’re looking for, you may be able to find a good loan originator more easily.

If you’re looking for a renovation loan, for example, you might want to seek out a lender specializing in that type of loan.

Be Wary of Deals and Offers You See in Ads

Some lenders might advertise low payments or low interest rates, but those may not be what you’d end up getting. By law, lenders are required to disclose the loan terms to you on a standard form called a loan estimate after you’ve applied for a mortgage.

Using this form can help you compare loans fairly as it will list the mortgage APR, term, points, and all fees you’ll need to pay to engage the services of a particular lender.

Know What Questions to Ask

If you interview mortgage originators, certain questions can help you determine if you’ll be a match or not. Don’t know what to ask? Take a look at these mortgage questions.

The Takeaway

Finding a good mortgage originator is worth the time it takes to explore your options and interview potential candidates. After all, finding the right mortgage, as an initial borrower or a refinancer, can mean significant savings — not just at origination but over the life of the loan.

Looking for the right mortgage partner? Give SoFi a look. SoFi offers refinancing as well as home mortgage loans with competitive rates, flexible terms, and low down payment options.

Explore the advantages of SoFi Mortgages and find your rate in minutes.

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Photo credit: iStock/David Gyung

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

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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As winter approaches, it may make sense to prepare for the cold weather by sealing cracks and holes around doors and windows no matter where you live. Proactive steps like these may help cut down on your heating bills.

If you’re bracing for a big chill, or worse, a blizzard — predicted to become more intense in the coming years, despite shorter winters — you’ll be glad you protected or checked the pipes, roof, chimney, heating system, and water heater. Your wallet and physical well-being may benefit from the following ways to winterize a house and how to finance the projects.

Ways to Winterize a House

There are numerous ways to winterize a house beyond sealing cracks in doors and windows. And while the steps to winterize a home may differ in Alaska than in Texas, it still helps to get ahead of any issues that may arise.

You should also know that the timing of the first frost can vary from state to state. It may help to check the National Weather Service’s data that forecasts the first frost for each state to assist in your winterization preparation timeline.

The following tips to winterize a house may help you reduce future repair costs and heating bills. And figuring out ways to lower your heating bills is something to pay attention to due to the potential rise of the price of natural gas, which is often used to heat homes.

Protect Pipes or Pay the Piper

When deciding how to winterize a house, you may first consider how to address plumbing leaks and other issues.

Burst pipes can cause $5,000 or more in damage, according to Consumer Reports , citing information from the Insurance Institute for Business and Home Safety , which has a page of recommendations to help prevent frozen pipes.

Pipes in unheated places inside a home, including basements, attics, and garages, are among the most likely to sustain damage. But pipes running through exterior walls can also freeze in certain conditions, and so can those running through kitchen or bathroom cabinets.

Protecting the plumbing is clearly a situation where being proactive may save a homeowner money.

Pipe insulation can be as inexpensive as 50 cents per linear foot. Compare that to the $5,000 figure above, and the rewards of winterization can quickly become clear.

Adding insulation to attics, crawl spaces, and basements can help to keep those areas warmer, which can also help to keep pipes from freezing.

If sinks are located on exterior walls, it can help to keep the cabinet doors open during frigid temperatures (after removing any dangerous chemicals, including cleaners, if there are children or pets in the home).

Allowing cold water to drip can also help prevent pipes from freezing, making sense in frigid temperatures.

Address HVAC Maintenance and Repair

Nobody wants the heating system to perform poorly during the winter — much less have it break down.

It’s a good idea to schedule a professional maintenance appointment, including a filter change before freezing temperatures arrive. (Then it’s best to change the filter at least every 90 days.)

Additionally, maintenance and repairs to the heating, ventilation, and air conditioning (HVAC) system and cleaning out vents can improve airflow in your home.

It may be time to consider a new HVAC system for some people. The U.S. Department of Energy’s Energy Star program provides tips to homeowners to decide if replacing an HVAC system makes sense.

Signs that it might be time to replace the unit include:

•   The heat pump is more than 10 years old.

•   The furnace or boiler is more than 15 years old.

•   The system needs frequent repairs, and energy bills are increasing.

•   Rooms in the home can be too hot or too cold.

•   The HVAC system is noisy.

If people in a home are away during reasonably regular times of the day, it can make sense to ask the HVAC professional about a programmable thermostat to save on energy costs.

The Environmental Protection Agency’s Home Energy Yardstick can help a homeowner determine if replacing an HVAC system makes sense.

Check the Roof, Gutters, and Chimney

Before winter hits, clearing the roof and gutters of leaves and other debris will help prevent snow and ice from building up and damaging the gutters — or, worse, the roof.

If ice or snow gets beneath roof shingles, it can lead to leaks and interior water damage. You may want to ask yourself if you need to replace your gutters. Do any shingles need to be glued down or replaced? Do any small leaks need to be repaired before they become big ones?

Plus, a chimney inspection can make sense before winter arrives. A chimney could have an animal nest lodged within, and there can also be structural problems. If the home has a wood-burning fireplace, creosote buildup can create a fire hazard. With a gas fireplace, a blocked chimney could lead to carbon monoxide backup, which can be life-threatening.

Addressing all these issues before winter comes can help you prevent future damage, reduce future repair costs and energy bills, and avoid a potential accident.

Examine the Water Heater

You want to check your water heater before temperatures plunge to avoid a chilly shower during winter.

Are areas of the water heater rusting or corroding? If so, this can lead to a leak. A professional can examine it, bleed the system to remove trapped air and mineral deposits, clean the pipes, and recommend and do repairs.

Think About Outdoor Equipment and Plants

Preventive winterization isn’t just about your home. You want to winterize your outdoor equipment, like a lawn mower or other power tools, to protect them as well.

Draining the oil from the appropriate equipment and taking it to a local recycling or hazardous-waste site can be your first step.

You also want to take care of general maintenance on equipment, including replacing old parts. That way, when spring rolls around and you need to mow your lawn or trim your bushes, you should be ready to go.

Additionally, inspect gas caps to ensure O-rings are intact; if not, get replacements from the manufacturer. Also, replace filters and lubricate what needs lubricating.

You may need to bring in the plants you initially placed outside to enjoy the summer sun when temperatures drop. Before doing so, check the plants for mealybugs, aphids, and other insects. Remove them, so they don’t spread to other plants.

Some people prefer to prune plants before transitioning them back into the house. If so, prune no more than one-third of each, pruning an equal amount off the roots. When repotting, pick a container that’s two or more inches bigger than the current one.

Gradually transition your plants to the new environment, which has different light and humidity levels. For a few days, bring the plants inside at dusk and put them back outside in the morning.

Over a period of 14 days or so, increase the indoor time until the process is complete and they’ve become indoor plants again, finishing the transition before temperatures go down to 45 degrees.

What’s the Cost of Winterizing a Home?

Pipe insulation, as noted earlier, can be relatively cheap, perhaps 50 centers per linear foot.

If a homeowner decides to insulate further, perhaps an attic, costs can range between $1.50 and $7.00 per foot, or a total of $1,700 to $2,100.

On average, an attic insulation installer may charge $70 an hour. If electrical work needs to be done for safe insulation around cables or junction boxes, you may expect to pay $80 an hour.

To hire someone to clean gutters and downspouts, you may pay an average of $119 to $227. An HVAC inspection might cost $325 and up, while the cost to replace an HVAC system could run between $5,000 and $10,000, depending upon the size of the home, among other factors.

What each of these services costs will depend on the locale, what types of repairs or unusual circumstances exist, and so forth.

Additionally, there are websites that allow a homeowner to enter a ZIP code and get an estimate of what a winterizing activity may cost. It makes sense to get quotes from local professionals to get an exact price.

Financing Winterization Projects

Some people pay for their home winterization costs out of pocket, while others may decide to get a home improvement loan. If you’re leaning toward a loan, comparing a home equity line of credit (HELOC) and a personal loan can make sense.

Recommended: How Do Home Improvement Loans Work?

A HELOC uses your home as collateral; for this to be an option, there needs to be enough equity in the property to borrow against it. If there is, and the loan amount required is large, it could make sense to apply for a HELOC.

Interest rates may be lower than those for a personal loan. Also, you can typically take draws from a HELOC up to the loan’s limit.

So if winterizing is coupled with indoor projects done through the cold season, for example, this might be a practical solution. In some cases, interest payments could be tax-deductible.

Recommended: The Different Types Of Home Equity Loans

A personal loan can make sense for recent homebuyers who haven’t built enough equity or for people planning smaller projects. Home winterization often fits into this category.

Applying for and receiving money from an unsecured personal loan is typically much faster than with a HELOC, partly because no appraisal is required for the loan.

Having an excellent credit score and cash flow can help a borrower get approved or receive better loan terms.

The Takeaway

Preparing your home for the harsh weather of winter can be one step you take to protect your house and potentially reduce your energy bills. However, many homeowners don’t take steps to winterize a house due to the upfront costs. Fortunately, there are ways to finance any home improvement projects.

If taking out a home improvement loan for home winterization projects makes sense, then here’s more about the fixed-rate unsecured personal loans offered by SoFi:

•   Personal loans have no origination fees and no prepayment penalties.

•   Qualifying borrowers may be eligible for loans up to $100,000.

•   Applying online can be quick and easy.

•   Customer service is available to help seven days a week throughout the process.

Winterize and protect your home with SoFi home improvement loans.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

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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