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If you’re a homeowner, you may know those “uh-oh” moments when the basement floods or the roof leaks. If you’re in that situation, you may well need a considerable amount of cash to pay for repairs ASAP.

In this guide, you’ll learn the ballpark prices for some of the most common home repairs so you are better prepared if an emergency strikes. You’ll also gain insight into some financing options so if you find yourself dealing with an unexpected and significant bill, you can decide which source of funding is best for your needs.

How Much Do Common Home Repairs Cost?

From the roof to foundation, there are a lot of things in and on a home that might need to be repaired. Among these features are things that might be emergency home repairs at some point, whether that means you’ve discovered black mold in the basement or a kitchen appliance has conked out. Here, learn about some of the most common home repair costs.


💡 Quick Tip: Some lenders can release funds as quickly as the same day your loan is approved. SoFi personal loans offer same-day funding for qualified borrowers.

Roof

A home’s roof has a certain life expectancy, generally based on the material used. A roof made of asphalt shingles might last from 15 to 30 years, while concrete- or clay-tiled roof could last for more than 50 years.

Regular roof inspections are a good way to identify any minor problems, which may typically cost about $220, but can vary with your specific home and the region you live in. Minor repairs might include:

•   Gutter cleaning.

•   Patching leaks.

•   Replacing shingles.

•   Repairing flashing.

Issues found during a roof inspection might average $1,100. Replacing a roof, a major expense, may be necessary at some point in the life of a home. For an average-sized home, a completely new roof can cost $9,217 on average.

Foundation

Foundation issues can show up as cracks in a home’s walls, floors that are not level, gaps around windows, or doors that don’t close properly. Fixing these symptoms of a foundation issue won’t solve the underlying problem, but repairing the foundation at the earliest sign of the symptoms may mean a less costly foundation repair.

Hiring a structural engineer can be a good first step if there appear to be major foundation problems, as they won’t be trying to sell a product to fix any potential problems, so will likely be unbiased. A structural inspection typically costs about $600.

•   Cracks in a foundation that don’t affect the structure are minor repairs but are best not ignored, lest they lead to major issues. Potential cost: between $250 and $800.

•   A leaking foundation might be the cause of those cracks. Waterproofing a foundation, which may involve excavating around the foundation, installing tile drains, filling cracks, and then coating the structure with a sealant, can cost anywhere from $2,000 to $7,000.

•   A house with a settling or sinking foundation may have flooring that is warped or sloping, doors and windows that don’t open and close properly, or even exterior cracks, or other apparent issues. The cost generally depends on the type of repair. Raising a house using piers can cost between $1,000 and $3,000, while jacking might be between $600 and $1,600.

Water Damage

Water damage in a basement might be due to flooding from a storm or broken water line, for example, and is best fixed quickly so mold doesn’t grow and become another issue to take care of. In addition to being an unpleasant sight, standing water can cause structural or electrical issues in a home. Extraction of the water is generally the first step in this type of repair, followed by any necessary structural repairs.

•   For simple fixes, such as cleaning up after an overflowing toilet, the cost might be around $150.

•   Water damage restoration, though, is a bigger ticket item, averaging between $1,300 and $5,600, though it could go higher. If your entire home’s wood flooring is warped by water damage or basement flooding wrecks your electrical panel, that could spiral into five figures.

Recommended: How Much Does It Cost to Finish a Basement?

Mold

If the above water issues are not fixed in a timely manner, mold can grow on the surfaces, requiring additional necessary repairs. In addition to damaging any surface mold grows on, it’s also a serious health hazard, potentially causing allergic reactions, asthma attacks, and skin irritation.

Mold remediation costs average between $5,000 and $30,000 for a 2,000 square foot home. If the mold issue is localized (say, just in the attic or basement), your costs could be anywhere from $500 to $7,500 on average, depending on the specifics of your situation.

Pests and Rodents

Pests and rodents in a home can be more than just annoying. Infestations might cause major damage to a home if left untreated. One-time pest control costs around $450 on average. Ongoing services may cost $50 or more a month.

Attics can be inviting spaces to rodents like mice, rats, or squirrels, or other animals such as raccoons or bats. Eliminating the problem can cost $200 to $600 typically.

HVAC

A home’s heating, ventilation, and air conditioning (HVAC) systems control the regulation and movement of air throughout the building. Like other components in a home, it’s wise to have an HVAC system inspected regularly to catch any problems before they become serious (as in, needing to pull together the cost of replacing an HVAC system). A standard tune-up for an HVAC system might cost between $150 and $450, with any potential repairs added to that. Some companies might offer ongoing maintenance plans, which could be a cost saver over time.

And what if the entire HVAC system needs replacing? Your price tag could be between $5,000 and $12,000 or higher. This could be a good opportunity to investigate any rebates available. For instance, if you buy an eco-conscious heat pump, you might find rebates as part of the Inflation Reduction Act.


💡 Quick Tip: Unsecured home improvement loans don’t use your house as collateral — a relief for many homeowners.

Electrical

Electrical issues in a house can vary from minor repairs, such as replacing an outlet, to wiring overhauls that may require professional help.

•   Hiring an electrician to replace a home’s outlets, light fixtures, and switches can cost around $280 on average. For someone who is confident in their DIY skills, this relatively simple job can be done for about $5 per outlet.

•   Replacing a circuit breaker or the entire electrical panel is something homeowners might leave to a professional. Costs will depend on the number of breakers being replaced or, in the case of replacing the electrical panel, how many amps. Panel replacement or upgrade can be anywhere from $2,000 to $6,000.

•   Rewiring a home can be quite expensive and include other repairs, such as plaster or drywall repair. To rewire an entire home, a homeowner might expect to pay between $2,500 and $6,000 for a three-bedroom house.

Ways To Finance an Emergency Home Repair

Even with regular inspections and maintenance, sometimes emergency home repairs are necessary. Some roof tiles may blow away, allowing rain in, or mold can take root in a damp basement. How to pay for home repairs (especially major ones) might involve using a variety of sources, depending on what is available and a person’s individual financial circumstances.

Homeowners Insurance

Homeowners insurance may be the first source most homeowners look to when needing to pay for emergency home repairs. The policy will stipulate what is covered, how much the company will pay, and any amount the homeowner might be responsible for, such as a deductible.

Some things a typical homeowners insurance policy might cover are costs to repair or rebuild after a disaster, replacement of personal belongings that were destroyed because of a disaster, or the costs of alternative housing while repairs are being made or a house is being rebuilt.

Emergency Fund

If there is a sufficient amount in an emergency fund, paying for an unexpected home repair with cash on hand is an option that won’t incur interest. How much to save in a home repair emergency fund will depend on the home’s size, age, and value. Older or more expensive homes might mean higher repair costs.

A typical recommendation is to save between 1% and 3% of a home’s value in a home repair emergency fund. So for a home valued at $500,000, this means having between $5,000 and $15,000 saved for emergency home repairs. This is a goal to work toward, but even having $1,000 in savings can be helpful.

If you do dip into your fund to fix your house, it can be like an emergency home repair loan, without any interest charged or monthly repayment schedule.

Home Equity

Homeowners who have built up equity in their homes may choose to use that equity to get money for home repairs. Using this type of financing, however, does come with some risk because the home is used as collateral. If the borrower defaults, the lender may seize the home as a way to repay the debt.

There are two types of loans that are based on a home’s equity: home equity loans and home equity lines of credit (HELOCs).

•   A home equity loan is a fixed-rate, lump-sum loan. It has a set repayment term, and the borrower makes regular, fixed payments consisting of principal and interest.

•   A HELOC also uses the equity a homeowner has built up, but the borrower does not receive a lump sum. Instead, they access the loan funds as needed until the loan term ends. Funds can be borrowed, repaid, and borrowed again, up to the limits of the loan.

HELOCs are variable-rate loans and consist of two periods: a draw period and a repayment period. The draw period is the time during which money can be borrowed, and might be 10 years. The repayment period is the time during which the loan is repaid and might last for 20 years. The combination of the two would make this example a 30-year HELOC.

Recommended: The Different Types Of Home Equity Loans

Assistance Programs

If emergency home repairs are required but the homeowner can’t afford to pay for them, assistance programs might be an option to look into.

•   Government loan or grant assistance. The U.S. Departments of Housing and Urban Development (HUD) , Agriculture (USDA), and Veterans Affairs (VA) offer grants and loans to eligible homeowners for home repairs and improvements.

•   Disaster relief. HUD offers several programs for homeowners affected by federally declared disaster areas. HUD partners with other federal and state agencies to provide relief in the form of mortgage assistance, relocation, food distribution, and other types of disaster relief.

•   Community Assistance Programs. Funding assistance may be able to be found by looking at local sources, such as county or city governments or charities. A good place to start a search is through HUD’s state listings .

Credit Card

Using a credit card to finance unexpected and urgent work on your home may seem like an easy fix. It can certainly be a quick way to pay for such repairs and a viable option if you’re thinking of how to pay for home repairs with no money withdrawn from your bank account. There are pros and cons to using a credit card for this purpose.

•   On the positive side: If the credit card is a zero-percent-interest card — and the balance can be paid in full before the promotional period ends — this can be a way to pay for an emergency home repair without paying interest.

•   As for disadvantages, credit cards are more likely to have high-interest rates, which can add a significant amount to the account balance if not paid off quickly.

•   Credit cards also come with borrowing limits. A major emergency home repair might max out this limit or even exceed it.

•   In addition, using all available credit can potentially have a negative effect on a borrower’s credit score. It can raise a person’s credit-utilization ratio. And if they are applying for a loan, it could raise their debt-to-income ratio, which might make getting a favorable loan rate a challenge.

Should I Get a Home Repair Loan?

Another option to pay for emergency home repairs might be a home improvement loan, which is a type of personal loan.

•   An unsecured personal loan does not use collateral, like a home equity loan or HELOC, so the borrower is not risking losing their home if they can’t repay the loan. The potential loan value is also not limited by the amount of equity in the home.

•   An unsecured personal loan may be funded more quickly than a home equity loan or HELOC. Because there is no collateral to determine a value for, this cuts out a potentially time-consuming step included in secured loans.

•   How can you use a personal loan? They can be tapped for a variety of reasons, not just emergency home repairs. If there are expected repairs, planned repairs, or home renovations that might make a home more livable, an unsecured loan can be a good option.

The Takeaway

It’s probably safe to say that nobody likes to think about emergencies. But it’s wise to be prepared in the event that one arises. When pricey home repairs are required, a personal loan may be the option that works best for your financial situation.

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 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 .

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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When you think about your basic living expenses, your mortgage or rent may be top of mind, but utilities are a considerable component for most people. Doling out money for electricity, water, maybe natural gas, garbage/sewer/recycling, cable television, and internet access can really add up. The average American household can spend anywhere from $300 to $450 a month or more on utilities.

Here, you can learn smart ways to save money on your utility bills. Some are simple ways to cut costs by tweaking your daily habits, and others may require investment, such as buying an energy-efficient appliance that will cost less over the coming years.

Read on to see which money-saving tips work best for you.

5 Ways to Save Money on Your Electricity Bill

The average electric bill in the US is currently $142.73 per month, with an average cost of 16.11 cents per kilowatt hour (kWh). Here’s advice on saving money on electricity.

1. Unplug!

It may be possible to save $100 or more each year by unplugging your appliances and devices when they’re not in use. Bonus: When you unplug, you’re also protecting them from damage that could occur during power surges.

What’s known as standby power can add up to 5% to 10% of your monthly electricity bill, according to the US Department of Energy. Electronics can draw power when not in use: Your laptop’s sleep mode, for instance, is different from being turned off, and it can still use energy.

Your home entertainment system can use electricity to keep some indicator lights on, including the ones, ironically enough, that tell you the system is off. And if you are the type who has one or two mobile phone chargers always plugged in, ready to revive your low-battery phone, know that those too are raising your bill.

Granted, it may be too much of a hassle to unplug your washer/dryer when not in use, but you work on not letting your phone charger, coffee maker, and computer eat up electricity when not in use.

2. Replace Old Appliances

Is your dishwasher, refrigerator, or clothes dryer reaching the end of its lifespan? Do yourself and your budget a favor and opt for an energy-efficient model.

Although this strategy means you need to spend money up front, ENERGY STAR®-certified appliances can save significant dollars in the long run. In general, a home appliance lasts for 10 to 20 years, on average, with ENERGY STAR-designated ones can save you up to $450 a year on your utility bills, according to the US EPA (Environmental Protection Agency).

Plus, you can sometimes get federal, state, or local rebates (like those made available by the Inflation Reduction Act) when you purchase energy-efficient appliances, so it might be wise to research this before you buy. You could wind up with even lower costs this way.

3. Wash Clothes in Cold Water

When you wash your clothes in cold water, you save significantly on energy usage, while also being kinder to your clothes. ColdWaterSaves.org shares that 90% of the energy used while washing clothes goes towards heating the water.

To put a dollar figure on this, the site calculates that the average household could save $200 per year by switching from washing laundry in warm or hot water to using cold instead. And guess what? Today’s detergent technology uses enzymes that actually work more effectively in cold water.

Also make sure your loads are full to save even more money; you’ll do your laundry less frequently that way.

Recommended: How to Save on Streaming Services

4. Dial Down Your Hot Water Heater

Here’s an especially easy hack—heck to see where your hot water heater’s thermostat is set. If it’s above 120 degrees Fahrenheit, consider lowering it! For every ten degrees that you dial it down , you could save 3% to 5% on your energy bills. Plus, you’ll make it less likely that someone in your family gets burned by hot water.

5. Dry Clothes More Efficiently

According to Energy.gov, in a standard household, the appliance that uses the most energy is the dryer. To calculate your costs, try the calculator they provide, and follow the following tips. They’re ideas for how to save on utilities.

•   Right-size your loads. Too full, and it takes too long for your clothes to dry. Too small? You’ll be spending too much energy per item as you dry them.

•   Air-dry on a rack when you can.

•   Add wool or rubber dryer balls to cut down drying time.

•   Regularly clean your dryer’s lint filter.

•   Use the lower heat settings to use less energy.

•   If your dryer has a cool-down cycle, use it.

•   If your dryer has a moisture sensor option, use that as well.

2 Ways to Save Money on Your Water Bill

The national median water bill is about $30 or $35 a month, though some people may pay two or three times that amount. Follow this advice to take your costs down a notch.

1. Invest in Efficient Appliances

Is it time for a new washer? If so, note that energy-efficient washers typically use 40% to 50% less energy and use 55% less water than conventional models. This switch can save you up to $60 a year on utility and water bills.

2. Shower Smarter

By going with a lower-flow showerhead, you can significantly reduce water usage, to the tune of $70 a year. Want to save even more? Become a fan of the five-minute shower, and quit sending money (quite literally) down the drain.

Recommended: 10 Personal Finance Basics

3 Ways to Save Money on Your Gas Bill

The average gas bill in the US is about $63 but could be even lower if you follow these tips.

1. Save on Heating and Cooling Costs

By resetting your thermostat, you may be able to save a significant amount.

You might be able to save about 1% of your energy costs for each degree that you adjust for an eight-hour period, and the Department of Energy recommends that you adjust your thermostat by seven to ten degrees (up in summer, down in winter) for an eight-hour period each day to annualize savings of as much as 10%.

If you have a smart thermostat, you could set it to be higher or lower when you’re out at work. You might also reset it overnight, when you’re sleeping.

For example, the Department of Energy recommends keeping your thermostat at 68 degrees when you’re up and about in winter, and at 58 when you’re away from home or sleeping. When the season is warm, their recommendation is to keep your thermostat at 78 degrees when you’re home, and at 85 when you’re not. If you do this, you can save an average of $83 or more annually.

Recommended: How to Automate Your Finances

2. Go Solar

If you really want to invest in your energy efficiency, you could also consider solar panels to create clean electricity and minimize your gas usage. You can potentially receive tax credits for going green this way. Living sustainably can really pay off in multiple ways!

Yes, installing solar panels requires a big investment; one that will take years to amortize. But by starting on the path to passive energy, you’ll be on your way to saving for decades to come.

3. Seal up Your Home

Ready for another idea for how to save on utilities? In cold weather, warm air can escape through drafty windows and doors; in hot weather, the cool air your air conditioning is pumping out can vanish the same way. By weather sealing your home, you can save up to 10% of your energy bill. That means weather stripping and adding insulation (important ways to help maintain your home’s value) can really pay off.

Saving with SoFi

No matter the strategy you choose, stashing your money in a bank with minimal fees and a solid interest rate is an important move.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

What’s a good way to save on electricity costs?

One good way to save on electricity costs is to unplug electronics and other devices (your laptop, phone chargers, coffee maker) when not in use. Keeping them plugged in costs money.

What runs up your electrical bill the most?

Heating and cooling are the single biggest portion of your energy bill, accounting for up to 40% of your costs.

How can I save on my gas bill?

Calibrating your thermostat can be a big money saver, as can weather sealing your home.

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The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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.

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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Owning your own home is typically a foundation of the American Dream, and many people are saving for a down payment right this minute. But when you are already paying rent, it can be a challenge to save for a down payment on a house, especially if you live in an area with a high cost of living or are dealing with the impact of inflation.

But that doesn’t mean it can’t be done. You can save up for your home purchase by following some wise financial advice and simplifying the process of socking away your cash.

If buying a home is a priority for you, read on. You’ll learn how to grow your down payment savings while still paying rent.

5 Tips to Save for a Home While You’re Still Renting

Rent can take a big bite out of your take-home pay, but it doesn’t rule out saving for a down payment on a house. Here’s some smart budgeting advice to help you set aside money for your future homeownership.

💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

1. Pay Down Your Debt First

In order to save for a house, it’s wise to figure out a plan to pay down your existing debt. This will free up more money for you to save for that down payment. Also, when you do apply for a mortgage, you will likely have a lower debt-to-income ratio, or DTI ratio. Reducing you DTI ratio can help your application get approved.

Student loan debt is a common kind of debt to have; the average American right now has $37,338 in loans. If you’re a full-time employee, reach out to your company’s HR department to learn more about student debt repayment assistance. A recent survey by the Employee Benefit Research Institute found that 17% of companies in the U.S. currently have this type of assistance, so it’s worth a try.

As a more drastic measure, you could always think about going into a profession that offers partial or total student loan forgiveness (such as teaching in certain public schools) or moving to a state that will help pay off your student loan debt just for moving there (currently Kansas, Maine, Maryland, and Michigan).

For an easier fix, you could consider student loan refinancing options, which might lower your rate. By dropping your interest rates, you could significantly reduce both your payments and the length of time you’ll be making them.

However, a couple of points to note. If you extend your term to lower the payment, you will pay more interest over the life of the loan. Also, do be aware that, when refinancing federal loans to private ones, you may then no longer be eligible for federal benefits and protections. However, by getting a lower interest rate, you may accelerate your path to saving for your down payment and getting keys to your very own home.

Credit card debt can also play a role in preventing you from saving for a down payment. This is typically high-interest debt, with rates currently hovering just below 25%.

There are a variety of ways to pay down this debt, such as the debt avalanche method, which has you focus on your highest-interest debt first; the debt snowball; and the debt fireball methods.

If none of these techniques seems right for you, you might look into getting a balance transfer credit card, which will give you a period of zero interest in which you may pay down debt. Or you might take out a personal loan to pay off the credit card debt and then potentially have a lower interest loan to manage.

2. Create a Budget That Will Help You Spend Less and Save More

Another way to free up funds for that down payment is to budget well. Creating and sticking to a realistic budget can help you spend less while saving for a house. While budgeting can sound like a no-fun, punitive exercise, that really doesn’t have to be the case. A budget is actually a helpful tool that allows you to manage your income, spending, and saving optimally.

To get there, you can pick from the different budgeting methods. Most involve these simple steps.

Gather your data: Figure out how much you’re earning each month (after taxes), along with how much you’re currently spending. Add it all up including cell phone bills, insurance, grocery bills, rent, utilities, your coffee habit, the dog walker, gym membership, etc. Don’t miss a dime.

List your current savings: Are you currently putting money into an IRA, 401(k), or other savings plan? List it, so you can see what you’ve already got in the bank.

Really dig into and optimize your spending: Can you cut back anywhere? You might trim some spending by bundling your renters and car insurance with one provider. Perhaps you can save on streaming services by dropping a platform or two. And how’s your takeout habit? If you really want to save for a house, you may need to learn to cook. You might even consider taking in a roommate or moving to a less expensive place to turbocharge your savings for your down payment while renting.

Making cuts, admittedly, can be the toughest step in the budgeting process, but it’s crucial to be honest with yourself about your spending. Remember: However much you cut back can help you get a new home that much sooner.

Finally, check in on your budget every so often and adjust as needed. For example, if you land a new job, get a promotion, or are given an annual raise, perhaps you can add that money to your savings account or put it toward paying off your loans. Whichever one feels more important to you is OK, so long as that extra cash isn’t vanishing on impulse buys.

3. Investigate How Big a Down Payment You Actually Need

Many prospective homebuyers think they must have 20% down to buy a house, but that is not always the case. That is how much you need to avoid paying for private mortgage insurance (PMI) with a conventional conforming loan. Private mortgage insurance typically ranges from 0.5% to 2% of the loan amount, and it’s automatically canceled when your equity reaches 78% of the home’s original value.

Here are some valuable facts: You may be able to take out a conforming loan with as little as 3% down, plus PMI. Certainly, that’s a sum that can be easier to wrangle than 20%, though your mortgage principal will be higher. According to National Association of Realtors data, the average first-time homebuyer puts down about 6%.

In addition, you might qualify for government loans that don’t require any down payment at all, such as VA and USDA loans.

You might also look into regional first-time homebuyer programs that can provide favorable terms and help you own a property sooner.

💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as little as 3.5%.

4. Grow Your Savings

If you’ve paid off your debt, set realistic budgeting goals, and are raking in some dough to add to a savings account, you’re already on the right track. A good next move is to put your money to work for you. Among your options:

•   Open a high-interest savings account. These can pay multiples of the average interest rate earned by a standard savings account. You will frequently find these accounts at online vs. traditional banks. Since they don’t have brick-and-mortar branches, online financial institutions can save on operating costs and can pass that along to consumers. Just be sure to look into such points as any account fees, as well as opening balance and monthly balance requirements. (Features such as round-up savings can also help you save more quickly.)

You can also look into certificates of deposit (CDs) and see what interest rates you might get there. These products typically require you to keep your funds on deposit for a set period of time with the interest rate known in advance.

•   If you have a fairly long timeline, you might consider opening an investment account to grow your savings. The market has a historical 10% rate of return, though past performance isn’t a guarantee of future returns. You could try using a robo advisor, or you could work with a financial advisor who will walk you through investment strategies for beginners and beyond and help you invest. Just be aware that investments are insured against insolvency of the broker-dealer but not against loss.

Recommended: First-time Homebuyer Guide

5. Automate as Much of Your Finances as Possible

This is a lot of information to process, but once you get through all the work upfront, you can start automating as much as possible. For example, have a portion of your paycheck automatically go into your savings account each month to plump up that down payment fund.

You might set up the direct deposit of your paycheck to send most of your pay to your checking account and a portion to a savings account earmarked for your down payment. You can check with your HR or Benefits department to see if this is possible.

Another way to automate your savings is to have your bank set up a recurring transfer from your checking account, as close to payday as possible. That can route some funds to your down payment savings without any effort on your part. Nor will you see the cash sitting in your checking account, tempting you to spend it.

The Takeaway

While saving for a down payment isn’t exactly a piece of cake, it doesn’t have to feel overwhelming. By trying five effective strategies, which can include budgeting, paying down debt, and automating your savings, you can accumulate enough money to start on your path to homeownership.

Once you have the down payment taken care of, you’ll be ready to shop for a home mortgage that suits you.

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.

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*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.

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.

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.

^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 Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

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