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While it is possible to take out a Federal Housing Authority (FHA) loan to purchase a second home, it’s only allowed in a handful of specific scenarios. Many first-time homebuyers choose an Federal Housing Authority (FHA) loan because of its lower credit score and down payment requirements, so when they need to purchase a second home the natural instinct is to look at financing with a second FHA loan. Read on for more details on how FHA loans work and the few exceptions that allow borrowers to qualify for more than one at a time.

What Is an FHA Loan?

An FHA loan is a type of mortgage that’s insured by the federal government and issued by a lender. FHA loans were created in 1934 at the height of the Great Depression to make homeownership more accessible. Since the FHA assumes the risk in case of default, lenders are able to offer more favorable loan terms to borrowers who might not otherwise qualify for conventional home mortgage loans.

With an FHA loan, borrowers with credit scores of 580 or more may qualify for a down payment of 3.5% of the home purchase price. (Borrowers with credit scores between 500 and 579 will be required to put 10% down.) These FHA loan requirements are helpful for first-time homebuyers who haven’t built up their credit or borrowers with less savings to put toward a down payment. FHA loans are one of several options for low-income home loans so consider all your options, whether you are thinking about taking out a first or second FHA loan.

Borrowers must also get mortgage insurance with an FHA loan. FHA mortgage insurance involves an upfront premium and an annual payment that’s added to monthly mortgage payments. The upfront premium is equivalent to 1.75% of the loan, while the annual payment is calculated based on the loan-to-value ratio and loan terms.

Besides the purchase of a home, FHA-insured loans are also available for home renovations and refinancing an existing FHA loan.

Recommended: How Do FHA 203k Loans Work?

How You Can Get an FHA Loan for a Second Home?

It’s possible to get an FHA loan more than once. For instance, if you’ve sold a prior home and haven’t owned a home for three or more years, you’d qualify as a first-time homebuyer and be eligible for an FHA loan. (And if you have a conventional mortgage on your first home, you may be able to get an FHA loan for a second home provided your credit score is adequate and your budget can handle the cost of a second mortgage; you would also have to occupy the second home as your primary residence.)

Meanwhile, qualifying for a second FHA loan is more complicated. For one, the purchased property must become the primary residence for at least one borrower. This includes a requirement to occupy the property within 60 days and have it be their primary residence for at least one year. These occupancy requirements mean that an FHA loan can’t be used to buy vacation homes or rental properties.

Here are details on the exceptions that permit borrowers to get an FHA loan on a second home:

•   Relocation: If moving for employment-related reasons, borrowers who financed their current home with an FHA loan may qualify for a second FHA loan on a new home before or without selling their first property. However, to qualify, the job must be performed on-site and the new home must be located at least 100 miles away from the primary residence that was previously purchased with FHA-backed financing.

•   Increase in Family Size: Borrowers may qualify for a second FHA loan to purchase a larger home to accommodate their growing family. This is evaluated on a case-by-case basis but typically requires proof of an increase in legal dependents and having at least 25% equity in the home.

•   Vacating a Jointly Owned Property: Borrowers who are getting divorced or permanently vacating a home they inhabited with a co-borrower may qualify for a second FHA loan.

•   Cosigning: A borrower who cosigned an FHA loan but didn’t live in the property could qualify for another FHA loan to buy their own home.

Recommended: FHA Loan Mortgage Calculator

FHA Second-Home Requirements

For borrowers who can satisfy one of the exceptions outlined above, the next step is meeting financial eligibility requirements for a second FHA loan. With any loan, and especially a second mortgage, lenders will consider the borrower’s ability to afford monthly payments when determining if they qualify. FHA loans can allow a debt-to-income (DTI) ratio of up to 50%, meaning that half of a borrower’s income is going to debt payments. Lenders, however, may look for a lower DTI of 43%, accounting for the cost of both mortgages, to approve a second FHA loan.

Borrowers will need to meet FHA loan credit score criteria to determine whether they’ll need to put 3.5% or 10% down. Besides the down payment, lenders also factor in savings for covering closing costs and monthly payments.

Pros and Cons of Multiple FHA Loans

There are advantages and drawbacks to having FHA loans for borrowers to keep in mind.

Pros

•   A smaller down payment

•   No income limits

•   Lower credit score requirements

•   Can be used to purchase duplexes, triplexes, quadplexes, or condominiums

•   May have lower mortgage insurance premiums than private mortgage insurance

Cons

•   Loan limits of $472,030 to $1,089,300 for a single-family home, depending on the cost of living by state

•   May require an inspection and higher property standards

•   Can only be used for buying a primary residence

•   May require mortgage insurance for the life of the loan

Tips if You’re Considering Multiple FHA Loans

Consider these tips to be prepared to apply for a second FHA loan: To lower your DTI, you’ll either need to increase your income or lower your debt. Using your first home for rental income can demonstrate to lenders that you can afford having two mortgages. When evaluating debt, remember that established credit that’s in good standing is viewed more favorably than newer credit accounts.

Building more equity in the home you currently own is another option to help qualify for a second FHA loan. If possible, aim for at least 25% equity before applying for a second FHA loan, as this is the minimum required if you are citing an increase in family size as the exception.

The Takeaway

Can you get an FHA loan if you already have an FHA loan? Yes, but there are specific exceptions you’ll need to meet in order to qualify, and the new property must be used as a primary residence for at least one year. Not able to take out two FHA loans at once? Don’t worry. There are other options for borrowing that may suit your needs.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What will disqualify you from an FHA loan?

Borrowers could be disqualified from an FHA loan based on a high debt-to-income ratio, poor credit, or insufficient funds to cover the down payment, closing costs, and monthly mortgage payment.

Can you qualify for FHA twice?

Yes, you can get a second FHA loan if you are relocating for a new job, move at least 100 miles away, have an increase in family size, or vacate a jointly owned property. Borrowers who previously co-signed on someone else’s FHA loan may also qualify for FHA twice.

What is the 100 mile rule for FHA loans?

The 100-mile rule allows borrowers to get a second FHA loan without having to sell an existing property with a FHA-backed mortgage if they’re moving for employment-related reasons or buying a new primary residence that’s at least 100 miles away.

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Photo credit: iStock/nazar_ab

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
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.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are 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.

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.

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A home inspection is an examination of the home’s structure and mechanical systems. It’s typically performed during the escrow period of a real estate transaction so that buyers can gather information about the condition of the property. This information can help them decide if they want to complete the transaction or cancel the contract.

Many real estate professionals advise homebuyers to purchase a home inspection to protect their money and investment. While a home inspection can reveal many pitfalls associated with buying a particular piece of property, it also has limitations buyers should be aware of.

What Is a Home Inspection?

A home inspection is a visual assessment of a property’s condition, including the major mechanical, structural, and visual elements of a home. This includes things like the electrical, plumbing, foundation, walls, ceiling, heating and cooling systems, leaks, mold, and structural elements.

Getting a home inspection is one way that borrowers can protect their money when taking on a home mortgage loan. Because home inspection reports can reveal potentially expensive problems with a home, homebuyers may be able to renegotiate the contract, ask home sellers to fix problems, or withdraw from the contract entirely.

What Does a Home Inspection Include?

If you’ve been looking at properties, you probably already know some basics of what to look for when buying a house. But a home inspection delves more deeply than you could in your initial examination. It includes information about the home’s condition, including mechanical systems such as the HVAC, roof, electrical, plumbing, walls, ceiling, floor, windows, doors, foundation, and other structural components.

It’s important to note that inspectors have some limitations. If the electricity isn’t on, they can’t do an inspection of it. There are other systems that are not usually included in a standard home inspection, such as an inspection of a well or septic system.

💡 Quick Tip: A major home purchase may mean a jumbo loan, but it doesn’t have to mean a jumbo down payment. Apply for a jumbo mortgage with SoFi, and you could put as little as 10% down.

When Should You Get a Home Inspection?

Whether you’re a first-time homebuyer or have bought multiple properties, if you’re in a real estate transaction, you should get a home inspection when you want to feel more comfortable with your purchase. You’ll want to make an appointment with the home inspector as soon as your contract is signed. (A seller might also want to get an inspection before putting a home on the market, so that any big issues can be fixed before they hurt the home appraisal value.)

Home Inspection Checklist

Not quite sure what is checked on a home inspection? It’s helpful to know what the home inspection may include in a home inspection checklist.

Grounds

•   Is there proper grading and drainage away from the home or is standing water visible?

•   Are the walkways, yard, trees, and landscaping in good condition? Do branches or trees hang over the house?

•   Is there evidence of termite or water damage on exterior structures?

•   Are the railings secure and stable?

Structure

•   Are the sides of the house straight, without sagging or bowing?

•   Do windows and door frames appear square?

•   Do the roof ridge and fascia (the lower beam supporting the gutters) appear straight?

•   Is the foundation straight with no major cracks?

Exterior surfaces

•   Is the siding or stucco in good condition?

•   Do masonry veneers have cracks or flakes?

•   Is there any wood in contact with the ground?

•   Is the paint peeling or chipping?

•   Are there any vines covering the exterior surfaces of the home?

•   Are there stains on exterior surfaces?

Windows, door, and trim

•   Are door frames cracked or rotting?

•   Are windows in working order with no breaks?

•   Are the joints of windows and doors caulked?

Roof

•   Are shingles cracked, rotting, missing, or curling? Are there more than two layers?

•   Are there obvious patches, cracks, splits, or wrinkling on a flat roof?

•   Are the flashing and soffit in good shape?

•   Is there exterior venting for eave areas?

•   Are the gutters in good shape?

•   Are the chimneys straight, properly flashed, with no evidence of cracked joints?

Attic

•   Are there stains on the underside of the roof?

•   Is there damage or rot to the structure?

•   Is there sufficient insulation and ventilation?

•   Is there plumbing, exhaust or plumbing terminating in the attic?

•   Are there open electrical splices?

Interior rooms

•   Do floors, walls, and ceilings seem plumb and level?

•   Are there stains or cracks in the walls or ceiling?

•   Are the paint or wall covering, flooring, and trim in good condition?

•   Do the lights and switches operate correctly?

•   Are there enough electrical outlets? Do they work properly?

•   Is there heating and cooling in each room?

•   Is there cracked or broken masonry around the fireplace? Is there evidence of backdrafting? Does the damper operate properly?

Kitchen

•   Is there a working exhaust fan venting to the outside?

•   Are there GFCI outlets within 6 feet of the sink?

•   Does the dishwasher operate and drain properly?

•   Are there leaks in the pipes under the sink?

•   Does the floor under the sink have evidence of water?

•   Is the water flow adequate?

•   Are the cabinets in good condition?

•   Do built-in appliances operate properly?

Bathrooms

•   Is there a working exhaust fan that doesn’t terminate in the attic?

•   Is there adequate pressure and flow at all fixtures?

•   Is the toilet stable and working properly?

•   Are metal elements free of rust?

•   Is the caulking on the tub, toilet, and shower in good condition?

•   Are there stains or evidence of past leaking?

Basement or mechanical room

•   Is there evidence of moisture?

•   Are there stains or cracks on exposed foundation?

•   Is there visible sagging, stains, or damage from insects in exposed wood elements?

•   Is there insulation at rim/band joists?

Crawl space

•   Is the crawl space adequately vented to the exterior?

•   Is there insulation on exposed water supply, waste, and vent lines?

•   Is there insulation between the crawl space and the heated areas of the home?

•   Is there evidence of moisture or pest damage?

Plumbing

•   Is there evidence of leaking or cracked pipes?

•   Are there signs of rust on the water heater? Is it vented properly? Is it the correct size to produce enough water for the home?

•   Does the water pump short cycle?

•   Do the galvanized pipes restrict water flow?

•   Is the well water test acceptable?

•   Is the hot water temperature between 118 and 125 degrees Fahrenheit?

Electrical

•   Are there exposed splices? Knob and tube wiring?

•   Does the service panel have adequate capacity?

•   Is there aluminum cable for branch circuits?

Heating and cooling systems

•   Is there good air flow from all vents?

•   Are there open seams in the flues?

•   Is there rust around the cooling unit?

•   Is there a combustion gas odor?

•   Is the air filter clean?

•   Is the ductwork in good condition?

•   Is there asbestos on the components?

•   Are there separate flues for oil/gas/propane and wood/coal?

Miscellaneous

•   Are smoke and carbon monoxide detectors in place?

•   Are stair risers and treads in good shape?

•   Are stair handrails in good condition?

•   Does the garage door opener work properly?

Recommended: The Cost of Living by State

What Are Problems That May Fail a Home Inspection?

The most common problem areas that cause a home inspection to fail (meaning, the buyer pulls out of the transaction because of the severity of the issues) include:

•   Faulty roof or foundation

•   Pests

•   Low water pressure

•   Failing windows

•   Electrical issues

•   Drainage issues

•   Failing heating system

•   Wood rot

•   Leaks

•   Mold

•   Building code violations

•   Toxic building materials (like asbestos or lead-based paint)

What Happens if a House Fails Inspection?

If there’s an issue that’s too big to ignore, you have options.

1.    Ask the seller to make repairs. Sellers may be able to make the necessary repairs to get the property up to par.

2.    Ask for a credit from the seller at closing. If you’d rather have money to fix the problem yourself, you can negotiate for a credit from the seller.

3.    Resubmit a counteroffer with a lower price. You can submit an addendum to the contract that lowers the purchase price to reflect the condition of the property and remediation cost.

4.    Abandon ship. If the problems are too big and it doesn’t make financial sense to buy the property, you may just want to walk away.

5.    Buy it anyway. In a competitive real estate market, you may need to decide if the problems found during the inspection are worth bringing up. Sellers often have multiple offers or can sell the property “as is,” meaning, the property may be able to sell even with the problems found. This is dependent on the lender, of course, because lenders may not fund your mortgage if the problems found are severe. (Lenders find out this information in the home appraisal, not the home inspection. The home inspection is for you.)

What Are Home Inspectors Not Allowed to Do?

Home inspectors have some limits. The inspection may not include a close look at:

•   Outbuildings or fences

•   Pests

•   Mold

•   Sprinkler systems

•   Wells

•   Septic systems

•   Ducting

•   Vegetation and drainage

•   Swimming pools

Additionally, home inspectors may not climb on the roof, advise on the cost of repairs, or advise on the purchase of the property.

How Much Does a Home Inspection Cost?

According to the U.S. Department of Housing and Urban Development, the typical home inspection costs between $300 and $500. This will vary, of course, depending on the size of the home, region, age of the home, and other optional services you may want to opt for.

How to Find a Reputable Home Inspector

A good home inspector is invaluable and they’re not all created equal. If you want someone that will take a good look at your home, take these steps:

•   Ask for recommendations from family and friends. If someone you know had a great experience with a home inspector, get their number.

•   Ask your real estate agent for ideas. They’re in the business and likely have a good idea of which home inspectors are thorough and knowledgeable when it comes to a home inspection.

•   Read reviews. There are many sites that offer to connect service professionals with homeowners, and they usually have reviews of past work that you can see.

Pros and Cons of a Home Inspection

When it comes to a home inspection, there are a few pros and cons you’ll want to consider.

Pros

•   A trained professional can find issues you cannot. Even if you’re experienced in home construction, a professional has the advantage when it comes to thousands of potential issues the home could have.

•   It helps protect your money. A home inspection can help you determine if purchasing a certain property is right for you or not and can help you ensure that the home is fairly priced.

•   The report can be used as a negotiation tool. A home inspection that reveals an issue can be used to negotiate repairs, price reduction, or money to repair the issue.

Cons

•   It’s possible to miss major issues. Getting a home inspection doesn’t guarantee that there’s nothing wrong with the home you’re buying. The inspector can’t open up walls. And if the home doesn’t have all of its systems operational, the home inspector cannot inspect them.

•   You may need additional inspectors for specialized systems. If the property you’re buying has a well or a septic system, for example, you’ll likely need an additional inspection from someone qualified to inspect those systems.

💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.

Do the Homebuyers Have to Be There?

Home inspectors generally do not require potential purchasers to be present when they complete the home inspection. However, it can be very helpful if the buyers make time to be there. The inspector can point out issues, address the severity of them, or make recommendations that are hard to express in a report.

How Long Does a Home Inspection Take?

On the day of the home inspection, how long a home inspection takes depends on the size of the home. Generally, the home inspection takes between two and four hours. After the inspection is complete, the report is usually sent within 24 to 48 hours.

Home Inspection Tips

After you receive your home inspection, you may see some unexpected things. These tips can help.

•   Don’t panic. Every house has something wrong with it. Most things are fixable and you just need to find out what it costs to fix.

•   Get estimates. The home inspection is usually just a starting point. You’ll need to find professionals to determine how much it will cost to fix.

•   Negotiate for fixes. Your real estate agent can ask the seller to fix items found in the home inspection. The estimates you get can come in handy.

•   Make a decision by the deadline. In your contract, you’ll likely have a date that you need to cancel to ensure you don’t lose your deposit. If something in the home inspection is upsetting enough for you to cancel the contract, you need to do it by the deadline.

The Takeaway

Home inspections are recommended because they can help buyers make an informed decision when it comes to purchasing property. When there’s a sizable amount of money at stake, it’s usually worth it to pay a few hundred dollars to uncover potential problems.

However, sometimes even a home inspection doesn’t catch everything wrong with a property. Keep in mind that once your home inspection is finished, you may need to hire a specialist to get to the root of the problem identified by the home inspector. With better information in your hands, you can be prepared to commit your money to a mortgage.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What things are big red flags in a home inspection?

Some big red flags to look for in a home inspection are potential issues related to the safety and strength of its construction and systems, such as foundation issues, electrical hazards, drainage issues, and leaks.

What is the importance of an inspection?

A home inspection can reveal potential problems or defects in a property. It can help buyers make better decisions and help protect their money.

What does an inspection agreement typically include?

If you see a home inspection agreement, it may include the scope of work, exclusions, date and fee for the inspection, extras that can be performed for a fee, dispute resolution process, limitations of liability, and statement of no guarantee or warranty of the inspection.

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Photo credit: iStock/LSOphoto

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.

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

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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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Many Americans are finding tiny houses, or those that measure several hundred square feet in size, are a welcome way to live. They can be both economical and eco-friendly, and some people say they simplify life, which can bring many benefits.

If you’re curious about tiny houses or are currently contemplating one, it’s important to know that financing these dwellings may be different than securing a traditional mortgage. Here’s a guide to tiny houses and how to secure funds to buy or build one.

What Is a Tiny House?

A tiny house is often defined as a home that is between 100 and 400 square feet. In contrast, the median size of a single-family American home is currently 2,014 square feet. That’s five times bigger than the biggest tiny home. Here are some other facts to know about this kind of dwelling.

•   Owners live in their tiny homes themselves, rent them out, use them as a small vacation home or even build them as an accessory dwelling unit (ADU) on the same lot as their primary residence. Tiny homes may be on wheels, or they may sit on a fixed foundation.

•   Prefab homes can be delivered complete to the site, or there are modular homes that require some assembly on site. Those who would rather build their own house can hire an architect or draw up plans to their own specifications. There are small homes in all kinds of styles, from a classic Colonial or Victorian to a ranch style or A-frame or ultra-modern design.

•   Local zoning rules will determine whether or not a person can build or move into a tiny home. And building codes will determine things like ceiling height.

•   Tiny houses may not have good resale value since they are such a specific type of home and are often highly customized. Before buying a tiny house as an investment property, it might be wise to consult a real estate investment professional.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Tiny House Pricing

In 2023, the average sales price for a single-family home was about $430,300. Tiny homes cost quite a bit less, with an average of $45,000. That price can vary up and down depending on the size of the home, materials used, and amenities (yes, some tiny homes have luxe, spa-style bathrooms, for example). The price of the building is not the only thing to consider.

Buyers of tiny homes must factor in the price of buying or leasing land on which to place the home if they don’t already own it, as well as the cost of hooking it up to utilities.

If the tiny home is on a foundation, there may be state and local property taxes to pay. If the tiny house is on wheels, though, there likely won’t be property tax assessed.

Recommended: Is Buying a House a Good Investment?

Financing the Land

If property needs to be purchased to have a place to put a tiny home, an option for financing is a land loan. There are three types of land loans: raw land loans, unimproved land loans, and improved loans.

•   Raw land loans are for land that’s completely undeveloped with no electricity, roads, or sewer access.

•   Unimproved land loans are for properties that have more access to amenities like utilities, but lack utility meters.

•   Improved land loans are for land with access to roads, water, and electricity.

The size of the down payment and the interest rate of the loan will depend on what type of loan is needed. For example, lenders may consider raw land to be a riskier option than improved land and require a bigger down payment and higher interest rates.

Mortgages for Tiny Homes

Qualifying for a home loan for a tiny home may be tricky. Some lenders may not be willing to offer first or second mortgages for tiny home financing. However, if a tiny home has a foundation and complies with local building codes, it may qualify for certain mortgages.

Tiny homes may also qualify for what is known as a “chattel mortgage,” a mortgage for moveable personal property. The tiny home acts as security for the loan, and the lender effectively becomes the owner of the tiny home until the loan is paid off and ownership is transferred back to the borrower.

This differs from traditional mortgages that are secured by a lien on the property. Because the size of the loans are typically small, chattel mortgages may have relatively short terms, though interest rates may be relatively high.

Personal Loans

A personal loan can allow individuals access to money that they can use for any personal, family, or household purpose, from paying off credit cards to an effective tiny house loan. Depending on the lender, loan amounts can range from a few thousand dollars to $100,000. When the applicant is approved for a personal loan, they’ll receive the loan amount in a lump sum and pay it back in installments with interest.

Personal loans may be secured or unsecured. Unsecured loans are not backed with any collateral, and the interest rates currently range from about 6% to 36%, depending largely on the borrower’s credit score.

Secured loans are backed by collateral, such as personal savings, a car, or another home owned by the same borrower. They typically come with a lower interest rate than their unsecured counterparts. However, it’s important to note that if a personal loan is defaulted on, the borrower’s assets could be seized by the lender to repay the debt.

Home Equity Loans

The equity someone may have built up in a home they already own can be tapped to finance a tiny home for use as a vacation home, rental property, or ADU. A home equity loan is a fixed amount of money secured by a borrower’s home.

Usually, up to 85% of the equity accumulated in a home can be borrowed, though actual loan amounts will also depend on the applicant’s income and credit history. The home equity loan is repaid with monthly payments over a fixed term. And if the borrower fails to repay, the lender can foreclose on the house.

A home equity line of credit (HELOC) may be another option to finance a tiny home. HELOCs differ from home equity loans in that the borrower doesn’t receive a single lump-sum payment from the lender.

Rather, a HELOC gives the borrower access to a line of credit that can be drawn down, paid back, and drawn down again, if need be, within a certain time period. The HELOC is secured by the borrower’s home, so as with a home equity loan if the debt is not paid, the lender can use the home as collateral.

Loans From Tiny House Builders

A tiny house builder or contractor may be able to help secure financing through unsecured loans based on an applicant’s credit score, or secured loans backed by the value of the tiny home. These tiny-house loans may have longer terms and lower starting interest rates than personal loans, but they may require a downpayment.

RV Loans

If the tiny house has wheels and is certified as an RV by the Recreational Vehicle Industry Association, an RV loan may be another option for financing. Online lenders, banks, and credit unions may all offer RV loans. In many cases, the tiny house will serve as collateral for the loan, the same way a car would serve as collateral in an automobile loan.

Recommended: Guide to Buying, Selling, and Updating Your Home

The Takeaway

If you’re in the market for a tiny house, you may need to think beyond traditional mortgages. Home equity, HELOC, and personal loans, among other options, may be available forms of financing that can set you on your way to owning the tiny house of your dreams.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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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.

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 .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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Your home’s roof can take a beating, whether roasting in the sun during the summer, getting coated with ice in winter, and withstanding wind and rain year-round. In other words, it’s one of your house’s key MVPs. But eventually, roofs wear out and need to be replaced or fixed. You may notice a small (or big) leak. It could be 15, 20, or even 50 years, but at some point, your roof will likely need to be repaired or replaced. While costs can range widely, the average roof replacement currently costs $11,500.

In this guide, you’ll learn about roof replacement costs, as well as what your options are for paying for roofing expenses.

How Much Does a New Roof Cost?

The average roof lasts 25 to 50 years, though repairs (both minor and major) can pop up more often. Sometimes, damage to one part of a roof can nudge a homeowner to go ahead and replace the whole thing.

You likely got a general idea of the condition of your home’s roof during the home inspection, when you were buying your property. If now is the time to get the job done, though, you’ll want to understand the costs involved.

When looking at new roof installation costs, there are a number of factors that will impact the overall price:

•   Size of the roof being replaced

•   Material to be used on the roof

•   Style of the roof (those with multiple eaves, lots of detailing, or steeper pitches could take longer and cost more)

•   What part of the country you live in (cost of living can vary considerably)

•   What time of year you are having work done (doing so off-season could potentially save you extra money; roofers tend to be most in demand in late summer and early fall).

•   The size and style of the roof may contribute to the overall cost. The height and pitch of your roof are also important factors because there are additional safety and labor costs to consider.

The average cost to replace a roof is approximately $11,500 on average, but the price could range from $6,700 to $80,000.

When creating an estimate, roofers sometimes define costs per roofing square. One roofing square is equal to a 10-by-10-foot (100 square feet) area. So a 1,700-square-foot roof would be 17 squares. Currently, squares can range in price from $450 to $750, depending on materials and other costs.


💡 Quick Tip: A low-interest personal loan can consolidate your debts, lower your monthly payments, and help you get out of debt sooner.

Getting a New Roof

Some pointers on getting a new roof:

•   If you are replacing your roof as a part of general home maintenance, you may have a little more time to prepare for the costs associated with the repairs. It allows you to be more methodical about pricing the project out and selecting a roofer. And having a bit of a runway will allow you to start saving and develop a workable budget for the project.

•   Get an estimate from several reputable contractors. When doing so, be sure to pay close attention to the quality of the materials specified in the estimate. It’s even better if you can get a recommendation from someone you know. Regardless, definitely check reviews and references carefully.

•   Remember that, while a new roof can be a major expense, it can improve the value of your home for future sale, stave off ongoing repairs from leaks, and, of course, protect the residents.

Paying for Roof Repairs

If your roof is damaged, then you are faced with a different challenge than figuring the roof replacement cost.

•   In the case of a natural disaster caused by an earthquake or hurricanes, you may even be eligible for help from the Federal Emergency Management Agency“>Federal Emergency Management Agency (FEMA). Whatever the cause, it could be helpful to take photographs sooner rather than later to document the damage.

•   Your homeowners’ policy or home warranty may include coverage that could possibly help defray some of the costs, depending on the cause of the damage and the age of the roof.

•   If it’s determined that the damage is from normal wear and tear, then it will likely be considered regular maintenance and may not be covered. Many roofing jobs fall into that common home repair category.

•   Also, if your roof is older than 10 years, you may only be eligible for part of the cost determined to be a depreciated value of the roof. Whatever the circumstance, it could be worthwhile to call your insurance company and find out if you’re covered and to what extent.

•   And, before you start work, it bears repeating that it’s wise to get multiple estimates to help you make an informed decision and ensure that you’re getting the most value for your investment. You may want to consult with a few licensed roofing contractors and compare bids.

Recommended: How to Pay for Emergency Home Repairs

Ways to Help Pay for Home Repairs

Whether you are replacing your entire roof or just replacing a damaged portion, you may want to consider financing all or part of the work. One option worth considering: a personal loan.

•   A personal loan can be a good option for some homeowners. With a personal loan, you’ll usually get a lower interest rate than credit cards. Also, with an unsecured personal loan, there typically is no additional lien against your property. Often, these loans can be processed quickly and with minimal fees.

•   Another financing option homeowners turn to for home improvements is a home equity loan or a home equity line of credit (HELOC). The application for a HELOC is akin to that of a mortgage. How much you’re able to borrow depends on several factors, including the value of your home. You may also have to arrange and pay for a home appraisal.

As you consider your costs associated with a roofing or other home project, you may want to use a home improvement cost calculator to help you budget appropriately.

The Takeaway

Replacing your home’s roof is typically a big-budget home repair project; it often costs in the five-figure range. However, it’s an important investment in your home’s value and integrity. You can look into financing options such as HELOCs and personal loans to help you pay for the work.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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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.

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 .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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Putting in a pool can turn your backyard into an oasis for parties, playtime for kids, and weekend relaxation. Unfortunately, installing an in-ground swimming pool costs over $55,000 on average, which can leave many homeowners wondering how to cover the cost of installing a swimming pool.

What are your options if you don’t have enough cash? Can you get swimming pool financing? Fortunately, yes. You actually have several options for financing a pool, including a cash-out refinance, a home equity loan or credit line, and a personal loan. Read on for a closer look at different types of pool financing and their pros and cons.

How to Finance a Swimming Pool

If you don’t have enough money saved to pay upfront for a pool — or even if you do — you might be wondering what types of loans or other options are appropriate for this type of backyard remodel.

There are several pool financing choices available to homeowners — including credit cards, pool company financing, cash-out refinancing, home equity loans, home equity lines of credit, and home improvement loans.

Before you take the plunge into financing a pool, it’s a good idea to consider the pros and cons of each type, including the overall costs of borrowing and whether you might qualify for a particular type of loan. What follows is a guide to four of the most popular pool financing options.

Using a Cash-Out Refinance to Pay for a Pool

If you have significant equity built up in your home, you may want to consider a cash-out refinance. Equity refers to the amount of your home’s value that you’ve actually paid off. Put another way, it’s the difference between your mortgage balance and your home’s current value.

With a cash-out refinance, you replace your existing mortgage with a new mortgage for a larger amount. You receive the overage as cash back, which you can then use to cover virtually any expense, including the installation of a swimming pool.

Pros of a Cash-Out Refinance

A cash-out refinance comes with a number of potential benefits:

•   Access to large loans You may be able to borrow up to 80% of your home’s equity, which could be enough to cover the cost of putting in a pool — and maybe even some extras, like a new barbecue or lounge chairs.

•   A lower rate Borrowers with good or improved credit, or those who bought their home when interest rates were higher, may be able to refinance to a lower interest rate.

•   Potential tax deductions A mortgage interest tax deduction may be available on a cash-out refinance if the money is used for capital improvements on your property. (Consult with a tax professional for more details on how this applies to your situation.)

Cons of a Cash-Out Refinance

There are also some downsides to going the cash refi route, including:

•   Involved application process Borrowers must go through the mortgage application process all over again to get a new loan, which usually means submitting updated information, getting an appraisal, and waiting for approval.

•   Closing costs You may have to pay closing costs, generally from 2% to 6% of the total loan amount. (That’s the old loan plus the lump sum that’s being added.)

•   Foreclosure risk Your mortgage is a secured loan, which means if you can’t make your payments, you could risk foreclosure.

Using a Home Equity Line of Credit to Finance a Pool

Another way you can use your home’s equity to finance a pool is to take out a home equity line of credit (HELOC).

A HELOC is a revolving line of credit that uses your home as collateral. It works much like a credit card in that:

•   The lender gives you a credit limit to draw from, and you only repay what you borrow, plus interest.

•   As you pay back the money you owe, those funds become available to you again for a predetermined “draw” period (usually five to 10 years).

Pros of a HELOC

Here’s why a HELOC can be a popular way to pay for home improvements like adding a pool:

•   Flexibility Instead of borrowing money in one lump sum, a HELOC allows you to tap into the line only as needed. Plus, you only pay interest based on the amount you actually borrow, not the entire amount for which you were approved, as you would with a regular loan.

•   Low rates The interest rates are generally lower than credit cards and unsecured personal loans.

•   Potential tax deductions The interest on HELOC payments might be tax deductible if the funds were were to buy, build, or substantially improve your home, and you itemize your deductions.

Cons of a HELOC

HELOC also have a few potential drawbacks, which include:

•   Variable interest rates HELOCs generally come with a variable interest rate, which means when interest rates increase, the monthly payments could go up. Although there may be a cap on how much the rate can increase, some borrowers might find it difficult to plan around those fluctuating payments.

•   HELOCs are easy to use — and overuse Some of the same things that can make a HELOC appealing (easy access to cash, lower interest rates, and tax-deductible interest) could lead to overspending if borrowers aren’t disciplined.

•   Foreclosure risk A HELOC is secured by an asset (your house). If you stop making the payments on the HELOC, you could lose your home.

Recommended: The Different Types Of Home Equity Loans

Using a Home Equity Loan for Pool Financing

A home equity loan is yet another way to tap into the money you’ve already put into your home. But unlike a HELOC, borrowers receive a lump sum of money.

Pros of a Home Equity Loan

Home equity loans have several benefits that make them worth considering for financing a swimming pool:

•   Predictable payments Unlike HELOCs, which typically come with a variable interest rate, home equity loans usually have a fixed interest rate. The borrower can expect a reliable repayment schedule for the duration of the loan.

•   Low rates Because it’s a secured loan, lenders usually consider a home equity loan lower risk and, therefore, offer lower rates. Secured loans also tend to be easier to qualify for than unsecured loans.

•   Potential tax deductions And, once again, there is a potential tax break. If the loan is used for capital improvements to the home, and you itemize your deductions, the interest may be deductible.

Cons of a Home Equity Loan

There are also some downsides to a home equity loan:

•   Rates may be higher than HELOCs Because a home equity loan’s interest rate won’t fluctuate with the market, the rate for a home equity loan is typically higher.

•   Closing costs As with most loans involving real estate, you’ll likely have to pay closing costs. These costs can range from 2% to 5% of the loan amount.

•   Foreclosure risk You may put your home at risk for foreclosure if you can’t make your loan payments.

Using a Personal Loan

You don’t necessarily have to tap into your home’s equity to finance a swimming pool. Many banks, credit unions, and online lenders offer unsecured personal loans that can be used for home improvements, including the installation of a swimming pool.

If you haven’t owned your home for long, or if your home hasn’t gone up much in value while you’ve owned it, a personal loan may be worth considering.

Pros of a Personal Loan for Pool Financing

Here’s a look at some of the advantages of using a personal loan for a home renovation like a pool:

•   Simple application process Applying for an unsecured personal loan is typically quicker and simpler than applying for a secured loan. With a personal loan, you don’t have to wait for a home appraisal or wade through the other paperwork necessary for a loan that’s tied to your home’s equity.

•   Fast access to funds Personal loan application processing and funding speeds vary, but many lenders offer same- or next-day funding.

•   Lower risk Because your home isn’t being used as collateral, the lender can’t foreclose if you don’t make payments. (That doesn’t mean the lender won’t look for other ways to collect, however.)

Cons of a Personal Loan for Pool Financing

Personal loans also come with some disadvantages. Here are some to keep in mind:

•   Higher interest rates Personal loans are unsecured, which means they generally come with a higher interest rate than secured loans that use your property as collateral. (However, borrowers who have good credit and don’t appear to be a risk to lenders still may be able to obtain loan terms that work for their needs.)

•   Origination fees Many (though not all) personal loan lenders charge an origination fee of between 1% and 6%, adding costs you might not have anticipated.

•   Less borrowing power Personal loan amounts range from $1,000 to $100,000 but how much you can borrow will depend on the lender and your qualifications as a borrower. With a home equity loan or credit line, you may be able to access more — up to 80% of your home’s value, minus your outstanding mortgage.

Should You Finance a Pool?

Installing a pool is an expensive home improvement, so you may need to borrow some money to pay for all or part of the project. Even if you have enough cash saved to pay upfront for a pool, you may still want to consider financing some or most of the project if you want to keep cash accessible for emergencies and other needs.

Financing with a low-interest loan (provided you can afford the payments) can make paying for a pool manageable. But before you borrow a large sum, you may want to consider how long you plan to live in your current home, how much pool maintenance might cost each month, if you’ll actually use the pool enough to make it a worthwhile purchase, and if the value added to your home is worth the investment.

The Takeaway

Due to the high initial investment required for installing a new pool, many homeowners opt to borrow money for the project and pay it off over time. Fortunately, you have a few different options for pool financing.

If you have significant home equity and are looking for fixed monthly payments, you might consider using a home equity loan to finance your pool. If you have significant home equity but want flexibility in your payments, you might prefer a HELOC.

If, on the other hand, you have good credit but not a lot of equity in your home — or you’d prefer not to put your home on the line — it may be worth looking at a personal loan for pool financing.

Ready to dive into your pool project? Consider a SoFi Personal Loan. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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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.

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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