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A home loan backed by the U.S. Department of Veterans Affairs (VA) can be a great way for eligible service members and their beneficiaries to take out an affordable mortgage — but even though they don’t require a down payment, they’re not free. The VA loan funding fee is a one-time charge associated with taking out a VA home loan. The amount you’ll pay depends on what type of loan you’re taking out, how much you are borrowing, whether or not it’s your first time taking out such a loan, and the size of your down payment.

However, there are some circumstances in which you may not have to pay the VA funding fee — or in which you might be eligible for a funding fee refund. Read on to learn everything you need to know about how the VA home loan funding fee works, and how much you might expect to pay if you’re planning to get one.

What Is a VA Funding Fee?

As discussed above, the VA funding fee is a one-time fee an eligible service member, veteran, or survivor must usually pay in order to take out a VA home loan. This is separate from any down payment the borrower might make, homeowners insurance, or any other cost associated with home-buying: the funding fee’s purpose, per the VA itself, is to help “lower the cost of the loan for U.S. taxpayers.”

Whether you’re buying, building, renovating, or repairing a home, or even refinancing an existing mortgage, if you take out a VA loan, you’ll need to pay the funding fee unless you meet an exemption requirement, which we’ll talk about in more detail below. Of course you’ll also need to meet any other VA loan requirements, much the way you would if you were qualifying for a conventional home loan.


💡 Quick Tip: Apply for a VA loan and borrow up to $1.5 million with a fixed- or adjustable-rate mortgage. The flexibility extends to the down payment, too — qualified VA homebuyers don’t even need one!†

How Does the VA Funding Fee Differ From Mortgage Insurance?

Mortgage insurance, also known as private mortgage insurance or PMI, is usually required on conventional mortgages when the borrower makes a down payment less than 20%. In most cases, when you take out a VA loan, you’re not required to make a down payment at all, nor to pay mortgage insurance. The VA funding fee is a totally separate cost.

Even though it might sound like a downer at first, paying the VA funding fee rather than PMI is really good news for borrowers: Although the VA funding fee is calculated as a percentage of your overall home loan, just like mortgage insurance, it’s far less expensive than having to pay mortgage insurance over time. That’s because the funding fee is assessed just once, while mortgage insurance is paid every month as part of your mortgage payment until you’ve paid off more than 20% of the home loan. That means PMI has the ability to stack up to very high amounts over time.

Recommended: The Different Types of Home Mortgage Loans

Why Is the VA Loan Funding Fee Assessed?

As discussed above, the VA loan funding fee is meant to help lower the cost of VA loans to American taxpayers, since these loans don’t require the borrower to make a down payment or pay mortgage insurance. It’s a relatively small, one-time cost that makes the whole program more affordable for everybody in the long run — what some might call a win-win situation.

How Much Is the VA Funding Fee?

The amount of the VA funding fee varies depending on whether or not this is your first time using a VA loan and how large of a down payment you’re planning to make. (Which type of loan to get is one of many things you’ll have to consider if you’re a first-time homebuyer.) The higher a down payment you make, the lower your VA funding fee will be — and the fees are always lowest the first time you take out a VA loan.These fees can be adjusted over time, and they actually went down in 2023. Today, they range from 1.25% to 3.3%.


💡 Quick Tip: Active duty service members who have served for at least 90 consecutive days are eligible for a VA loan. But so are many veterans, surviving spouses, and National Guard and Reserves members. It’s worth exploring with an online VA loan application because the low interest rates and other advantages of this loan can’t be beat.†

2023 VA Funding Fees for Purchase and New Construction Loans

Here are the rates active-duty military members, veterans, and their survivors can expect when taking out a VA loan. If you used a VA loan in the past to pay for a manufactured home, you’re considered a first-timer for the purposes of this fee. And if your loan from the VA is a Native American Direct Loan, you pay a flat 1.25% regardless of whether this is your first VA loan or how much your down payment is.

	Down Payment Amount	VA Funding Fee
First VA Loan	Less than 5%	2.15%
	5% to 9.99%	1.5%
	10% or higher	1.25%
Subsequent VA Loans	Less than 5%	3.3%
	5% to 9.99%	1.5%
	5% to 9.99%	1.5%

How Is the Fee Paid?

The VA funding fee is due when your loan closes. You can either pay it all at once as a lump sum then, or incorporate it into your financing and pay it off over time. Of course, if you choose to finance your funding fee, you will likely accrue interest on it, making it more expensive in the long run.

Are There Any VA Funding Fee Exemptions?

Yes! If you fall into one of the following circumstances, you won’t have to pay a VA funding fee:

•   You’re receiving VA compensation for a disability connected to your service.

•   You’re eligible to receive VA compensation for a disability connected to your service, but you’re being paid for active duty or receiving retirement compensation instead.

•   You’re the surviving spouse of a veteran and you receive Dependency and Indemnity Compensation (DIC).

•   You’ve received, before the date your loan closes, a proposed or memorandum rating that says you’re eligible for compensation because of a pre-discharge claim.

•   You’re an active duty service member who provides evidence before or on your closing date of having received the Purple Heart.

Is Anyone Eligible for a VA Funding Fee Refund?

In addition to the above circumstances, if you’re later deemed eligible for VA compensation due to a disability connected to your service, you may be entitled for a refund of your VA funding fee. To confirm, you’d need to call your VA regional loan center at (877) 827-3702 (TTY: 711). They’re available Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.

Recommended: The Cost of Living by State

What Do You Need to Provide to Get a VA Funding Fee Refund?

While the VA regional loan center will walk you through your funding fee refund claim, be aware that you’ll need to provide some documentation to prove your eligibility for a refund. That includes:

•   A copy of your disability award letter — the office may also be able to verify your compensation in your system if you’ve lost the letter

•   A copy of the signed closing documents

•   A copy of your current mortgage statement

Some or all of your VA funding fee may be refunded depending on the eligibility of your claim.

The Takeaway

The VA funding fee is a one-time fee that borrowers must pay to take out a VA loan. It’s due at closing, and the amount varies depending on how much you borrow, the size of your down payment and other factors. First-time VA borrowers always enjoy lower fees than those who take out subsequent VA loans.

SoFi offers VA loans with competitive interest rates, no private mortgage insurance, and down payments as low as 0%. Eligible service members, veterans, and survivors may use the benefit multiple times.

Our Mortgage Loan Officers are ready to guide you through the process step by step.

FAQ

What is the typical funding fee for a VA loan?

For a first-time borrower who doesn’t make a down payment as part of their home purchase, the VA loan funding fee in 2023 is 2.15% of the loan amount. So if you borrowed $200,000 in this scenario, the fee would be $4,300.

What is the new VA funding fee for 2023?

Fees now range from 1.25% to 3.3% of the loan amount, depending on your circumstances. The VA home loan funding fee percentage was reduced as of April 7, 2023 by 0.15% in most categories — and 0.3% for those taking out a VA loan that is not their first and who put down less than 5%.

How to avoid VA funding fee

Unless you are eligible for an exemption due to a service-connected disability (or in a few other instances), it’s impossible to avoid the VA funding fee entirely if you’re taking out a VA loan. That said, your funding fee will be lower if you put down a higher down payment. It’s also lower for first-time borrowers than those taking out subsequent VA loans.

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Photo credit: iStock/kupicoo

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.

^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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Buying a house at auction could be a great opportunity to scoop up a deal on a property. When homes are auctioned off, either due to foreclosure or other reasons, the highest bidder gets the property. Once the property is yours, you could move in, rent it out, or fix and flip it.

How does a house auction work? In terms of the mechanics, they’re not that different from other types of auctions. If you’ve ever been to an estate auction or charity auction, for example, then you might already have an idea of what to expect. But the dollar amounts are likely higher than you would encounter in a typical auction, so if you’re considering buying a house at auction, it’s wise to study the landscape before you start. Here’s what you need to know.

What Are House Auctions?

An auction is a sale that’s open to the public in which something is sold to the highest bidder. House auctions are regulated by state laws. An auction house or company can run the auction on behalf of whoever owns the home, which may be a bank, lender, or individual. How does an auction house work? Auction companies typically get a share of the sale proceeds in exchange for running the auction.

Real estate auctions can save buyers the time and stress of house-hunting for weeks or months on end. If you’re paying cash for the home — and most auction winners do — you don’t have to go through the home mortgage loan process either.

Why Are Some Houses Sold at Auction?

There are different reasons why a home may be sold at auction, but it’s often due to financial hardship on the part of the owner. For example, a home could be auctioned for sale if the owner:

•   Defaulted on the mortgage payments and the home is in foreclosure

•   Agreed to a short sale with the bank in order to avoid foreclosure

•   Failed to make property tax payments

•   Had their property seized as part of a government forfeiture

•   Didn’t pay homeowners association fees as agreed

In other instances, a homeowner may decide to put a property up for auction simply to unload it quickly. If someone inherits a home, for instance, they might decide to auction it off so they can walk away with cash in hand rather than listing the property on the market and waiting for it to sell.

Recommended: What Is a HUD Home?

How Do Auctions Work?

How does an auction work for a house? It’s not that different from any other type of auction. The auction company can announce the date and time of the auction beforehand, giving prospective bidders a chance to research the details of the property. People place bids on the property, either in person or online, by a prearranged deadline, and the person submitting the highest bid wins.

Types of Auctions

House auctions can be absolute, minimum bid, or reserve. How the auction is structured can depend on the seller’s preferences. Here’s how each type of auction works.

•   Absolute auction. In an absolute auction, the property is sold to the highest bidder. Unless there are no bidders at all, a sale is guaranteed.

•   Minimum bid auction. In a minimum bid auction, the auction company sets a minimum bid amount. Bidders must then submit starting bids that are equal to or above that amount.

•   Reserve auction. In this scenario, a minimum bid is not published but the seller reserves the right to reject any bids that don’t meet their reserve price — sometimes as much as several days after the auction concludes. This means there is no guarantee that the property will actually be sold, even to the highest bidder.

House auctions can be held online or in person. The format may depend on the auction house or again, the seller’s preferences.

Most auctions, including house auctions, also involve a buyer’s premium in addition to the so-called “hammer price” (the winning bid). The buyer’s premium is typically a percentage of the hammer price, usually under 10%. The premium is not part of your bid, but you should know what it is and factor that into your overall budget for bidding so that you don’t exceed your resources.

Types of Bids

In addition to there being different types of house auctions, there can also be different types of bids. The seller has the option to choose whether they’d like bids to be blind or open.

•   Blind bids. In a blind bid auction, bids are not disclosed. In other words, you won’t know what the person next to you is bidding. This type of bidding requires buyers to be able to make an educated guess in order to avoid overpaying for a property.

•   Open bids. In an open bid auction, bidders can see what price everyone else is offering for a property. This type of arrangement offers transparency and makes it less likely that you’ll overbid, however, it can lead to a bidding war if there’s a lot of competition for a property.

If you’re researching how buying a house at auction works, it’s important to know which type of bid arrangement the auction house uses beforehand. Otherwise, you could end up in a situation where bidding gets tricky and you risk going over budget or losing the property.

How Much Should I Bid?

There is no simple answer to this question, as the amount you’ll need to bid to win a house at auction can depend on the terms of the auction itself. If you’re in a minimum bid auction, for instance, then you’ll need to bid at least enough to meet the seller’s base requirements. However, you may need to bid well above the minimum to win the auction.

Doing your research before auction day can help you get a better idea of how much to bid on a house at auction. If you know, for example, that there’s still $100,000 remaining on the mortgage of a foreclosed home then you might set that amount as your maximum bid if there is no minimum.

However, you’d also want to know what the home is worth. If the property’s appraised value is only $70,000, then you’d likely want to adjust your maximum bid down. The more you know about the property, the easier it becomes to establish your minimum and maximum thresholds for bidding.

Example of a House Auction

How does buying a house at auction work in real life? Again, it can depend on several factors, including the state the auction is being held in, the auction company that’s being used, the seller’s preferences, and the home itself. Here’s an example of what an absolute, open-bid auction might look like.

You, along with other prospective buyers, are bidding on a home with no minimum. You know from your research that the property has an appraised value of $80,000 so you decide your maximum bid will be $70,000. Another buyer makes an opening bid of $30,000, which is followed by bids of $35,000, $42,000, $53,000, and $60,000 from the remaining bidders.

At this point, you decide to bid $63,000, which is still under your maximum bid threshold. As the auction continues, buyers one and two stop making new bids. Buyer three counters with $65,000 and you bid $67,000. Buyer three bumps their bid to $69,000, which prompts you to go to $70,000.

If there are no more bids, then you win the property and move on to the next step, which is to arrange payment with the auction company. If buyer three counters with $72,000, you’d need to decide if you want to go above your maximum bid or let the property go.

Buying a House at Auction: In Person vs. Online

Auction companies can host home auctions in person or online. The process is still largely the same, though there are some differences to know.

In Person

At an in-person auction, you and other interested bidders will meet at an appointed date, time, and place to make your bids. An auctioneer will run the auction and accept bids, according to the seller’s preferences. Should you win an in-person home auction, you’ll need to make arrangements for payment that day.

Attending an in-person auction can be more stressful if you’re in an open bidding situation and it starts to get competitive. You might be driven by emotion to make a bid that you otherwise wouldn’t if you felt less pressure to secure a particular property.

Online

Online house auctions also require you to show up at an appointed day and time to place your bids but you’re able to do it from the comfort of home or wherever you happen to be at the moment, as long as you have a strong internet connection. You and other buyers can make bids on the property and again, the winner gets the home.

Buying a house at auction online may be more convenient if you’re not able to go to the auction site in person. You could bid on homes on your lunch break at work or while you’re waiting in the carpool line to pick up kids from school. You may feel less pressure since you’re not surrounded by other eager buyers shouting out bids.

How to Find Real Estate Auctions

There are several ways to find real estate auctions near you, starting with an online search. You can visit real estate auction websites and filter for properties near you by your current location. Auction websites may also allow you to filter by property type or opening bid so you can narrow down your search to find properties that fit your budget. The number of properties available is driven in part by foreclosure rates in each state.

You can also look for home auctions near you using other means, including:

•   Craigslist

•   Facebook

•   Local newspaper advertisements

•   County treasurer or tax assessment notices online

•   County court websites

If you know a local real estate agent, you might also contact them to ask if they know of any upcoming property auctions. Finally, you can ask around with friends, family, or coworkers to see if anyone in your circle has a lead on a home that may be going up for auction.

What Bidders Need to Know

Before buying a house at auction, there are a few rules to be aware of. If you’re a first-time homebuyer or investor, here’s what you’ll need to know.

•   You don’t need a real estate agent to buy a house at auction, though it might be helpful to talk to one informally about how the auction works or the details of a home you’re interested in.

•   Houses sold at auction are usually as-is, meaning that if you buy a home that needs repairs, you’re responsible for making them.

•   Depending on the reason for the auction and who the seller is, you may not be able to get a full home inspection (or any inspection) before buying.

•   You may need to bring cash to the auction house to make a down payment or pay in full for any properties you win.

•   If you’d like to attend a house auction online, you may first need to demonstrate to the auction company that you’re a qualified, legitimate buyer.

•   Failing to follow through on the purchase after winning can result in the loss of any down payment or deposit you’ve made and you could also be barred from participating in future auctions.

It’s usually a good idea to read through the auction company’s policies beforehand so you know what obligations you have in attending the auction and if you win a bid.

Pros and Cons of Real Estate Auctions

Should you buy a house at auction? There are some advantages and disadvantages involved. On the pro side, you could buy a home for much less than what you could purchase one for on the open market. Homes that sell at auction may sell for below their appraised value, which could make it easier to find a bargain on a property. That might appeal to you if home prices are where you live have put home buying out of reach.

How much money you can save when buying a house at auction can depend on how motivated the seller is to get rid of it as well as the overall demand for properties in that area. When you compare the cost of living by state, the cost of living in California is much higher than other areas, largely because of how competitive the housing market is.

In terms of the downsides, most homes at auction are sold as-is. You run the risk of buying a home that looks like a great deal on paper, only to find out that it needs extensive repairs in order for it to be livable. If you’re trying to make some quick money with a fix and flip investment, for example, the final profit may fall short of your goals.

Another concern is ensuring a clear title on the property, particularly if it is in foreclosure or bank-owned. Order a title report on the property and look for secondary mortgage or tax liens. Sometimes the auction agreement will make the buyer responsible for these costs, so it’s a good idea to read the agreement carefully and to buy title insurance as well.

Unless the auction house offers a financing option, you’ll need to have cash on hand to complete the purchase. Coming up with tens of thousands of dollars to buy a home in cash may not be realistic for the average buyer. Last but not least, house auctions aren’t guaranteed. You’ll still need to go through escrow and closing on the property and, during that time, if the original homeowner is able to work out an agreement with the lender or bank that allows them to keep the home, your efforts to try to buy it could come to nothing. Think of winning a house auction as winning the right to buy the house, not winning the house itself.

Recommended: What Is a VA Loan?

Tips to Buying Auction Homes

If you’re interested in how to buy a foreclosed home or bank-owned property at auction, it pays to do your research as mentioned. For example, you might ask these questions before the auction.

•   Why is the home being sold?

•   Is it a foreclosure or bank-owned?

•   Will I be able to inspect the property beforehand or is it being sold as-is?

•   What type of auction is it and are bids open or blind?

•   How much cash will I need to bring? How much would I need to have easily at hand in the event that I have the winning bid?

•   Does the auction house allow financing?

•   What happens if the owner is able to reclaim the property?

The other tip to keep in mind is to know what you can comfortably bid, based on your budget. A real estate agent can also give you some valuable insight into the condition of the local housing market, which may make it easier to identify a good or bad buy.

If you go into a house auction without a firm limit set, it’s easy to go over budget and potentially end up paying too much for a property.

Risks of Buying Houses at House Auctions

House auctions are not risk-free, as you’re not always guaranteed total transparency. Some of the biggest risks to be aware of include:

•   Buying a home as-is, only to find out it needs a lot of work to make it livable. Big-ticket problems that may not be immediately visible might include mold, a defective septic system, or electrical problems.

•   Getting caught in a bidding war and paying too much for a property

•   Tying up all of your cash in an investment property that may take months to become profitable

•   Having your bid superseded if the homeowner is able to work out a last-minute agreement with the bank or lender

Being aware of the risks can help you to decide if buying a house at auction is right for you. And remember that there are other ways to invest in property, without having to own it directly. For example, you might collect dividends from a real estate investment trust (REIT), hold real estate mutual funds or exchange-traded funds (ETFs) in your brokerage account, or buy property alongside other investors through a real estate crowdfunding platform. If you are open to investing in commercial real estate, real estate options contracts are, well, another option.

The Takeaway

If you’re interested in how to buy a house on auction for yourself, it’s important to know what the risks are and what the process involves. At the end of the day, you might find that it’s easier to go the traditional route for buying a home.

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 are the advantages of buying a house on auction?

Buying a house at auction could save you money if you’re able to pay less for a property than you would on the open market. Home auctions can offer opportunities for investors or would-be first-time buyers to save money on the purchase of a property.

What is the benefit of an auction house?

Houses sold at auction can be more affordable than homes sold on the open market. That’s an advantage if you’d like to buy a home, either to live in or as an investment property, but high prices are keeping you out of the housing market.

What happens when you bid at an auction?

When you make a bid on a house at auction, your bid can be topped by another prospective buyer or accepted if it’s the highest bid. If you make a winning bid, then you can move to the next phase, which involves signing the necessary paperwork and arranging payment to assume ownership of the home. \

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Photo credit: iStock/bymuratdeniz

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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Tenancy in common and joint tenancy with right of survivorship describe two different models of ownership for people who share a property. The main difference between tenancy in common vs. joint tenancy is how property is treated when one of the owners passes away. Joint tenants are entitled to inherit the other person’s share of the home, while tenants in common are not.

That’s an important distinction to understand if you’re considering buying a home or another piece of real estate with someone else. Whether it makes sense to hold property as joint tenancy vs. tenancy in common can depend on your situation and overall financial plan.

What Are Joint Tenants With Right of Survivorship?

What is joint tenancy? In simple terms, it’s a means of owning property or assets equally with someone else. For example, if you own a home as a joint tenant with right of survivorship, both you and the other tenant have an undivided interest in the property. You both have an equal right to live in and use the home and when one of you passes away, the other tenant will automatically inherit the property.

In order for a joint tenancy to exist, these four things must be true:

•   Each owner’s interest is equal.

•   Each owner acquired their interest in the property at the same time.

•   Owners agree to have the right of survivorship.

•   The property title must specify a joint tenancy vesting.

Joint tenancy arrangements can only exist between individuals. That means that a trust cannot be listed as a joint tenant on a property with an individual. It’s important to note that states can place additional restrictions on when a joint tenancy arrangement exists, what rights each tenant has, and when ownership is terminated, so check the rules for your state before making a decision.

Examples of Joint Tenants With Right of Survivorship

There are different scenarios in which you might own property with someone else. For instance, you might have a joint tenant with right of survivorship situation if:

•   You get married and jointly purchase a home with your spouse. Your mortgage document specifies that you’re both listed as joint tenants of the property once the sale is complete.

•   Your aging parent decides to add you as a joint tenant to their bank account or sets up a joint brokerage account so that you can inherit those assets once they pass away, without having to go through the probate process.

•   You purchase an investment property with your sibling, agreeing to share in the ownership of the property and any profits gleaned from renting it out. You also split the costs of owning and maintaining it.

The common thread here is what happens to the property or assets being shared when one of you passes away. In that case, the other joint tenant is entitled to inherit it automatically.

Pros and Cons of Joint Tenants With Right of Survivorship

Joint tenancy with right of survivorship can hold some advantages for co-owners of a property or other asset. If you’re a first-time homebuyer, for instance, then making a purchase with someone else as joint tenants could make it more affordable. Home mortgage loans can be easier to qualify for when there are two borrowers in the mix.

Once the purchase is complete, you’d both own the home equally and share responsibility for the mortgage payments, taxes, maintenance, and upkeep. That’s a plus if you live in a more expensive area. (When comparing the cost of living by state, for instance, it’s easy to see that some locations come with a higher price tag.)

Being a joint tenant can also simplify things should one tenant pass away. Rather than having to go through probate, which can be lengthy and time-consuming, the surviving owner in a joint tenancy can inherit the property right away.

As far as the downsides go, there are some limitations. For one thing, joint tenants cannot share their ownership share of the property without the consent of the other tenant. Think about the previous example of buying a rental property with a sibling: Let’s say you decide you’d like to sell, but your sibling doesn’t want to sell her half, and nor does she want to buy you out. That’s where it gets messy.

Joint tenancy arrangements can also cause issues if you’d like to leave your share of the home to someone besides the other tenant, such as your children. Legally, you wouldn’t be able to do that; you’d need to have a tenancy in common arrangement instead. And if you’d like to get a home equity line of credit based on your equity in the property, your lender might require the other tenant’s consent to do so.

Recommended: The Cost of Living in California

What Are Tenants in Common?

What does tenants in common mean? Tenancy in common is an ownership arrangement in which two or more people share a property or asset. Ownership can be split equally between all tenants but it doesn’t have to be.

All co-tenants have the right to use the property. Two important differences between this and joint tenancy with right of survivorship: A tenant in common could sell their share without the other tenants’ consent. And when a tenant in common passes away, their share of the property would go to their heirs and if they have no heirs, to their estate.

Examples of Tenants in Common

There are different reasons for choosing to hold property as tenants in common vs joint tenancy ownership. Here are some examples of how it might work if you share a property with one or more individuals.

•   You purchase an investment property with two of your siblings. Your oldest sibling put down half of the down payment, so you agree that they should get a 50% share of the property while you and your other sibling get 25% each.

•   You’ve purchased a home with your significant other as tenants in common, but the relationship goes south. You both agreed to split the home 50/50 and you decide to sell your share to your former partner’s cousin who wants to move in.

•   You get remarried and buy a home with your new spouse, agreeing that you’ll get 60% ownership while your spouse gets 40%. Both of you have adult children from a previous relationship. You choose a tenants in common arrangement so that when you pass away, your children — not your spouse — will inherit your 60% ownership share in the property.

How you decide to share ownership in a tenancy in common situation is up to you. It may be easiest to make the split equal but if one person has more money invested in the property than another, it might be more fair to give them a larger share.

Pros and Cons of Tenants in Common

Some of the pros and cons of tenancy in common are similar to those associated with joint tenancy. For instance, buying a home can be more affordable when you own it with someone else or multiple people. There are no limits to the number of people you can include in a tenancy in common arrangement.

Tenancy in common also allows you some flexibility since you can sell your share at any time. You can also leave your property to your heirs, rather than having it automatically go to your co-owners.

In terms of drawbacks, owning a property as tenants in common can be tricky if one tenant passes away and you don’t get along with the person who inherits it. For example, if your ex-partner’s child inherits their share and they don’t want to own the home, they might try to force its sale. That’s a worst-case scenario, but it’s something to consider if you’re buying a home with a non-spouse.

Tenants in common also share responsibility for taxes and other financial obligations associated with the property. If you buy a home with another person or multiple people and one of them isn’t pulling their weight, you may be forced to pick up the slack.

What’s the Difference Between Joint Tenants With Right of Survivorship and Tenants in Common?

The difference between joint tenancy vs. tenants in common centers largely on who owns what and what happens to their ownership share when they die. In a joint tenancy situation, both owners share the property equally. Each one is entitled to inherit the property from the other should one of them pass away.

Tenants in common don’t have that same right. Instead, their share of the property goes to their heirs or estate when they pass away. That means that tenancy in common doesn’t avoid probate the way that a joint tenancy would. Additionally, tenancy in common does not guarantee equal ownership of the property.

Recommended: How to Get a Mortgage in 2023

How to Transfer Property Held in Joint Tenancy After One Joint Tenant Has Died

When property is held in a joint tenancy arrangement, one tenant automatically inherits the other tenant’s share when they pass away. There’s no need to transfer the deed or title to the property if both tenants were already listed on it. You wouldn’t need to go through probate either.

You may be required to file a copy of the deceased tenant’s death certificate along with an affidavit certifying your joint tenancy status with your register of deeds or county clerk’s office. An estate planning attorney can help you to determine what documentation, if any, might be necessary to affirm your ownership in the property.

What if you want to transfer property you inherited as a joint tenant? In that case, you’d most likely need to deed the property over to the new owner. For example, you could get a warranty deed to transfer a property you inherited from your husband to your oldest child if you’d like them to own it. Keep in mind that if you’re giving the property to them, that could potentially trigger gift tax.

Tips on How to Plan Your Estate

Estate planning allows you to have some control over what happens to your assets. Some of the things to consider when creating an estate plan include:

•   Whom you would like to inherit your assets when you pass away

•   How minor children will be provided for and taken care of, if you’re a parent

•   What will happen to property you own with someone else, either as joint tenants or tenants in common

•   How any debts you leave behind will be handled

There are different financial tools that you can use to create an estate plan, starting with a last will and testament. A will allows you to outline your specific wishes for whom you’d like to inherit your assets. You can also use a will to name a guardian for minor children.

If you have a more complicated estate, you might consider establishing a trust as well. A trust allows a trustee of your choosing to manage your assets on behalf of your beneficiaries, according to the terms and conditions you set. For instance, you might establish a trust to set aside money for the care of a child with special needs or to ensure that your adult children don’t blow through their inheritance.

Life insurance is another piece of the puzzle. A life insurance policy can provide a death benefit to your loved ones should something happen to you. They could use that money to pay final expenses, pay off debts, or simply cover day to day living expenses if needed. Talking to a financial advisor or estate planning attorney can help you decide what elements to include in your plan.

The Takeaway

Understanding the difference between joint tenancy vs. tenancy in common matters if you’re planning to buy a home with someone else. There are different rights and responsibilities associated with each type of ownership, and you’ll want to determine the best option for you before you get to the closing table.

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 is a primary difference between joint tenancy and tenancy in common?

In a joint tenancy situation, both owners have an equal right to the property. When one joint tenant passes away, the other automatically inherits their ownership share. In a tenancy in common arrangement, the heirs of a joint owner would be entitled to inherit their share of the property when they die.

How does a tenancy in common differ from a joint tenancy with right of survivorship?

In a tenancy in common arrangement, when one owner passes away, their heirs receive their share of the property. In a joint tenancy with right of survivorship agreement, each joint owner stands to inherit the other owner’s share of the property should one of them pass away.

What is the advantage of being tenants in common?

Tenants in common can sell their ownership share of the property, without requiring the other owner’s permission, and new owners can be added to the arrangement. When making their estate plan, tenants in common also have the flexibility to leave their share of the property to whomever they wish.

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Photo credit: iStock/fotodelux

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.

This article is not intended to be legal advice. Please consult an attorney for advice.

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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Mortgage interest is, simply put, the money you pay the bank for the service of lending you the amount you need to buy your home. Interest is expressed as a percent of the loan amount. It is usually rolled right into your monthly mortgage payment of the principal and interest.

This means interest can be something of a hidden cost to homebuyers, especially those on the market for the first time. But it’s still an expense that can really add up. That’s why it’s important for buyers to set themselves up for the best (i.e., lowest) mortgage rate possible.

Here’s what you need to know, including:

•   What is mortgage interest?

•   How does mortgage interest work?

•   How are mortgage rates set?

•   How does an adjustable vs. fixed mortgage differ?

•   How can you get the lowest mortgage rate?

What Is Mortgage Interest?

When a bank offers a borrower a significant sum of cash to purchase a house, they’re offering a valuable service, one they expect to be paid for. While an origination or processing fee may apply, the main way a bank makes money on offering a mortgage (or any kind of loan, for that matter) is by charging interest.

Interest is generally expressed as an interest rate, or a percentage of the amount of money you borrow. A lower rate means a lower overall loan cost, since you’ll pay less interest over time.

First-time homebuyers often overlook the impact of interest on the total cost of their home purchase, but it can be significant.

•   An example: At a mortgage interest rate of 6%, a buyer could expect to pay $382,599 on a 30-year mortgage loan of $330,000 This equals a total cost of $712,599, most of which would be interest.

As you can see, it pays to find the lowest rate possible! Fortunately, there are some things you can do as a borrower to set yourself up for the lowest rate possible. It is, however, worth noting that many factors affecting interest rates are out of the borrowers’ control.


💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.

How Are Mortgage Rates Set?

Mortgage rates are calculated using a complex set of factors including both the borrower’s financial status and the health of the economy.

While there’s a lot to say about the economy’s impact on mortgage rates, the simplest rule of thumb is this:

•   When the market is doing well, interest rates tend to be higher.

•   When the market is not doing so great, interest rates tend to be lower.

Mortgage rates also tend to increase with increasing inflation.

Many think that mortgage rates are set by the Federal Reserve (otherwise known as the Fed), but this is a misunderstanding. The Fed sets short-term interest rates that banks use between themselves, but this figure does influence the interest rates of consumer loans including mortgages. So if the Fed’s interest rate is high, chances are mortgage interest rates will be pretty high, too.

Personal financial factors that affect mortgage rates include your credit score, the size of your down payment, and whether the house will be your primary residence or a secondary home or investment property. Generally, rates are higher when the loan is a riskier investment for the bank, which can make sense. The greater the danger of default, the more the servicer wants to be sure they get paid.

Types of Mortgage Rates

There are a variety of mortgage offerings available. You may see offers with varying rates for:

•   Loans designed for lower-income earners, such as FHA, USDA, and VA loans

•   Loans of different lengths, such as a 15-year vs. 30-year home loan

•   Jumbo loans, for those borrowing a larger sum of money to finance a home.

However, one of the biggest decisions is which of the two main types of mortgages, fixed-rate and adjustable-rate, you choose.

Fixed Rate vs Adjustable Rate Mortgages

Fixed-rate mortgages, as their name implies, have one fixed interest rate over the entire lifetime of the loan. If you sign a contract for a fixed-rate mortgage at 5.75%, you can expect to pay that same 5.75% interest rate throughout its term.

Adjustable-rate mortgages, on the other hand, adjust the interest rate depending on market factors. They may start with a fixed rate for a certain amount of time, such as five, seven, or even 10 years. Thereafter, your interest rate (and therefore your monthly mortgage payment) will change over time.

These mortgages can be attractive since they often offer lower rates upfront, and they may come with rate caps to protect borrowers from excessive interest rates. It’s worth noting, though, that they can also be harder to predict and budget for in the long run.


💡 Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).

Why You Have to Pay Interest on Mortgage Loans

As mentioned briefly above, paying interest compensates a lender for extending you a chunk of cash to buy a home and pay it back over time.

Interest can be one of the key ways that banks make money. For instance:

•   A financial institution might pay customers 3% interest on the money they keep on deposit.

•   The bank might then use some of that money to fund home loans on which borrowers might pay 6.75% in interest.

•   The difference between the 6.75% that the bank is earning on loans vs. the 3% it is paying depositors is part of the way a bank profits and stays in business.

How Lenders Calculate Your Mortgage Payments

As you learned above, interest is rolled right into your home mortgage loan payment. But exactly how much of that money is interest? And how much is going toward the mortgage principal (i.e., the borrowed cost of the home itself)?

The answer depends on where in the loan’s term you are: Earlier on in the mortgage, most of your payment will go to interest. Again, this makes sense: The bank wants to make sure they get paid for their services, even if you decide to repay the mortgage early or stop paying the loan entirely.

Even in the beginning, some of your monthly payment will go to principal — along with any taxes or insurance you may also be paying as part of the mortgage.

Eventually, though, the principal will represent the majority of your payment. The moment when this happens is known as the “tipping point” of a loan — and it’s yet another reason to look for the lowest rate possible. The lower your interest rate, the more quickly your tipping point will arrive, which means you’ll grow your home equity more quickly.

How Interest Works for Different Types of Mortgages

You’ve already read about the two main types of interest: fixed-rate vs. adjustable-rate home loans. But how else does interest on a mortgage work?

Here’s one other option to know about: There is also such a thing as an interest-only mortgage, which allows the borrower to pay — you guessed it — only interest for the first three to 10 years of the loan. Interest-only mortgages can be either fixed-rate or adjustable-rate loans, as described above, but all of them carry some risks since monthly payments can rise so sharply after the initial interest-only period.

How to Get a Lower Mortgage Interest Rate

By this point, you’re probably on board with the idea of finding a good mortgage interest rate.

Given the cost of living in states across the United States — and especially in expensive states like California — keeping housing costs as low as possible is a priority.

While it’s not all under a borrower’s control, there are some ways to ensure your interest rate is as low as it can be. Here are some tips to help.

Get Your Finances in Ship Shape

Although there are lots of things you can’t control about your mortgage interest rate, it’s worth it to take advantage of the things you can. That means getting your financial profile into the best possible shape before applying for a mortgage: reviewing and building your credit score, paying down debt ahead of time, amassing a larger down payment, and, if possible, increasing your income. These steps may take some effort up front, but they can really pay off over time.

Shop Around For Lower Interest Rates

While interest rates are relatively consistent across the market, banks do compete with each other to offer the lowest rates possible — and attract more borrowers. That benefits you because it means shopping around, even just a little bit, can be worthwhile. Reducing your rate by even half a percentage point can save you tens of thousands of dollars over a 30-year loan.

Look into Paying Points

While this may not be the right option for everyone, if you can put additional funds down on some home loans, you could get a better rate. A point equals 1% of your mortgage amount, and if you can pay a point, you can usually lower the rate on your mortgage by 0.25% over the life of the loan.

Recommended: Cost of Living in California

How Mortgage Interest Deduction Works

Although it’s not a way to lower the cost of interest, the mortgage interest deduction allows you to deduct the amount of money you pay on mortgage interest from your taxable income — which lowers what you owe to Uncle Sam come April. In general, how the mortgage interest deduction works is for up to $750,000 in home loan debt.

Tips on Mortgage Interest

Here are a couple of additional ways to get the best deal possible on your mortgage rate:

•   Try the online mortgage calculators that are available. Not only can you get a feel for monthly payments in different scenarios, you can also compare different products, such as a 30-year vs. a 15-year home loan.

•   Consider whether a qualified mortgage broker could help you find offers to suit your needs. These professionals can work as an intermediary between prospective homebuyers and lenders to facilitate the process and research a variety of options.

The Takeaway

Mortgage interest is the money a bank charges for the service of providing a home loan, expressed as a percentage of the loan amount. Getting a lower mortgage interest rate is an important way to keep your home — and your life — affordable over the long run.

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

How is interest calculated on a mortgage?

How does interest work on a mortgage? Prevailing Interest rates are calculated as a percentage that is based on a variety of economic factors. In terms of borrowers doing the math for a specific interest rate on a certain loan, there are online tools to help with that. And while borrowers can’t control the market, they can work ahead of time to ensure their financial profile is in good shape to get the lowest interest rate possible.

How much interest is paid on a 30-year mortgage?

That depends on the rate, among other factors. For example, a 30-year mortgage for $400,000 at a rate of 6.82% and on a house purchased for $425,000 would cost $540,717 in interest. The total payment of principal and interest would be $940,717. However, if that rate were 5.50%, the borrower would spend only $417,703 in interest.

Do you pay mortgage interest monthly?

Yes, you typically pay mortgage interest monthly. Most home loans roll interest right into their monthly payment, though the amount you pay in interest versus principal will change over time.

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Photo credit: iStock/Chainarong Prasertthai

*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.

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

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When babies start crawling, they can get into all sorts of trouble. Aside from creating messes, they can hurt themselves. That’s why it’s important to babyproof a home before a child begins to explore.

The process of babyproofing can take time, effort, as well as a financial investment. But the payoff is huge — you’ll be able to relax, knowing that your little one will be able to crawl — and eventually walk — around your home without getting hurt.

If tackling your entire home all at once seems daunting, don’t stress. What follows is a simple, step-by-step babyproofing checklist that will help you turn your home into a safe haven for your little one.

Put Up Gates

If you don’t have doors throughout your home, you’ll want to install baby gates.

Baby gates that can be screwed into a banister, wall, or door frame are the most secure. But pressure-mounted gates can be a good alternative if you live in a rental and don’t want to put holes in any walls.

Some gates allow parents to step through, while others swing open. When looking for baby gates, it’s a good idea to seek out the ones that are the top-rated for safety and the most convenient for your home. For instance, you might get frustrated if you have to constantly step over a gate, so a swinging gate could be a better fit.


💡 Quick Tip: Home improvement loans typically offer lower interest rates than credit cards. Consider a loan to fund your next renovation.

Buy a Hexagon Play Yard

When you can’t constantly watch your baby, you can put your little one in a hexagon “play yard” with toys and comfort items.

The panels can also be used to block off certain rooms or areas of a room.

However, keep in mind that as your child grows and develops, they may be able to move the play yard or climb over the panels.

Cover the Outlets

Another part of a babyproofing checklist is covering all the outlets in your home.

The easiest option is to push heavy furniture in front of outlets so your baby can’t get to them. But if that’s not possible, you can buy plug-in plastic covers, outlet shields, or sliding plate covers.

Remember to also get power strip covers and electrical cord covers so your baby can’t play with those either.

Babyproof the Doors

Babyproofing doors is important so that babies can’t get into certain rooms or get their fingers jammed in doors.

To babyproof doors, you can install door knob covers, which are rounded, plastic covers that are too hard for babies to squeeze in order to turn the knobs.

You can also use a door strap, which will keep babies out of a room but allow small pets in.

Recommended: Common Financial Mistakes First-Time Parents Make

Put Away Heavy Objects

If young children pick up a heavy object, they could drop it and break it or, worse, hurt themselves.

A major part of a babyproof checklist is putting away heavy objects that could injure your child. These objects could go in a closet or another room. It doesn’t matter where they go, as long as they are out of baby’s reach.

Install Latches on Drawers

One key part of babyproofing a home is to make sure that children can’t get into drawers and cabinets where dangerous objects like knives are stored.

Parents have a few options for babyproofing cabinets and drawers. You can use slide locks for double door cabinets, which tie adjacent knobs together. Or, you might opt for magnetic locks, which go in drawers and cabinets and require a key to unlock them.

Other options include: adhesive strap locks (which use heavy-duty, removable adhesive) and spring-action locks (which unlock when parents open a drawer and hold down on the lock at the same time).

Recommended: 20 Small-Kitchen Remodel Ideas & Designs

Remove Choking Hazards

If you have more than one child, there could be little toys around the house or other objects that are choking hazards for your baby.

You can store these objects in a safe spot and instruct your older kids to do the same. For instance, an older child could have a special trunk where they put all their toys when the baby is around.

Keep Chemicals Locked Up

Before having a baby, you may have kept household cleaners and bug spray underneath the sink.

Now, when babyproofing, you’ll need to put a lock on the cabinet where these chemicals are stored and/or install a gate to keep your baby far away from them.

A number of household substances must, by law, have child-resistant packaging. Still, one look around the average home shows potential dangers, including perhaps colorful single-load laundry detergent pods and dishwashing liquid.

Recommended: How Much Does it Cost to Raise a Child to 18?

Use Corner Guards

Installing corner guards is an essential babyproofing step. Corner guards, which may prevent a bad bruise or eye injury, can be used on sharp corners of wooden desks, glass tables, and metal fireplace hearths.

Some corner guards are made of high-density foam; others from silicone rubber. They come in different colors and may include double-stick tape for easy installation.

Babyproof Window Blinds

Cords attached to window coverings are a strangling hazard for babies. Ideally, you’ll want to switch any corded window treatments for cordless options. If that’s not possible, your next best option is to shorten the cords, attach plastic covers to the ends, and secure them to the wall with a tie-down device, or cleat. Cord cleats should be installed at least 5 feet above a floor, where a baby can’t reach.

Recommended: The Top Home Improvements to Increase Your Home’s Value

Secure Furniture to the Wall

Babies start to become very curious when they roam around the house. They may push furniture and try to move it. Every year children are injured in tip-overs of TVs, tables, dressers, and bookcases, some fatally. This is why all furniture they have access to should be secured to walls.

It’s important to secure furniture not only in the living and dining room but also in the nursery. Pay special attention to the baby’s bookshelf and dresser.

Secure Rugs

Once babies start to crawl and even walk, they could slip and fall on rugs. A good way to avoid mishaps is to make rugs immovable by placing nonskid rug pads underneath them.

Double-sided carpet tape can also be used to keep down any slight upturns on the edges and corners of the rugs.

Block or Babyproof Stairs

Babies tend to love stairs, but of course stairs can be dangerous. You can block stairs off with a baby gate and/or add carpeting, nonskid step pads, or a carpet runner to make stairs less slippery.

Paying for Babyproofing

Any way you slice it, raising kids is expensive, and that includes babyproofing your home.

The total cost of baby-proofing a home will depend on its size and specific baby-proofing needs. On average, babyproofing a home can cost between $500 and $2500, with most parents paying around $1,500 to make their homes safe and secure for their child.

Costs typically include essential items for each room like baby gates, outlet plugs, furniture anchors, electrical protection covers and materials, and locks for drawers and doors. Your outlay can run much higher than the average babyproofing cost if you install all new child-safe window treatments or make some structural changes to your home to make it safer for your little one.

If you aren’t able to pay for babyproofing out of pocket, you might consider using a low- or no-interest credit card or taking out a personal loan for home improvement.


💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.

The Takeaway

A babyproof checklist is a must before babies start crawling, cruising, or otherwise getting around. Some key babyproofing steps include: using gates on stairs, locking or latching cupboards and drawers, containing dangerous items, placing outlet covers on all electrical outlets, and securing and mounting large unstable furniture to the walls.

Unfortunately, babyproofing typically isn’t a one-and-done home project. It’s a good idea to frequently reassess safety as your child ages and develops new skills (such as pulling up and walking) or you make any changes to your home.

Some babyproofing steps are free, while others can be costly. If you don’t have the cash on hand to cover safety-related home improvements, you might consider using a credit card with a 0% introductory interest rate or getting a low-interest personal loan.

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.

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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