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The term “accessory dwelling unit” describes a secondary dwelling unit on the same lot as a primary single-family home. It is sometimes called an in-law suite, granny flat, or, more romantically, carriage house. Barndominium is a relatively new term for this kind of dwelling.

As zoning laws across the country have changed to allow ADUs, the trend has boomed, especially along with population growth in the South and the West. Read on to learn more about why ADUs are popular and are what it takes to build one.

ADU Meaning Explained

An ADU goes by many names, but its features make it unique among types of dwellings.

•   ADUs are smaller than the primary residence they accompany. In California, which passed statewide laws making many city restrictions on ADUs obsolete and streamlining the approval process, the size generally ranges from 500 to 1,000 square feet.

•   ADUs are self-contained. They usually include a bathroom, kitchenette, living area, and separate entrance.

•   ADUs require a special permit, which varies by location, according to the American Planning Association. Building codes may limit the size of the ADU and the number of occupants. Some cities, however, are offering an ADU amnesty program to help legalize under-the-radar units.

•   Unlike a duplex, ADUs usually share utility connections with the primary residence.

Recommended: A Guide to Buying a Duplex

What Are the Different Types of ADUs?

All ADUs have to follow ordinances and laws, but they don’t all look the same. Depending on homeowner preference, it might look like one of the following:

•   Detached This is likely new construction, formal or informal.

•   Converted garage This might mean retrofitting the garage or adding a second floor to create an ADU.

•   Attached Typically this is an addition to the existing residence.

•   Interior conversion An existing portion of the house, perhaps the basement, is transformed into an ADU. Fans of Full/Fuller House might recall the Tanners’ attic conversion and the basement/garage living space.

Benefits of an ADU

For the right homeowner, an ADU has upsides.

•   Rental income Choosing to rent out the space could bring in income, whether with a long-term rental or short-term Airbnb.

•   A true mother-in-law suite or adult-child dwelling For multi-generational families, adding an ADU could be a good way to create privacy and be close … but not too close. An ADU can also house an adult child who returns to the nest.

•   A space to age in place Conversely, aging homeowners or empty-nesters might choose to build an ADU for themselves. The homeowners could move into the smaller, more manageable space and rent out the larger property for passive income.

•   Flexibility An ADU could become a home office or art studio. For some homeowners, it might just be a good place to host guests.

•   Enhanced property value Compare the cost of buying a second small home or condo in your area with the cost of adding an ADU. How much value will a permitted habitable accessory dwelling add? A property appraisal will answer that question.

Recommended: A Guide to Unsecured Personal Loans

Drawbacks of an ADU

ADUs may also come with their fair share of potential downsides.

•   Can be expensive A detached ADU may cost as much as a small house to build (though the homeowner already owns the land). The home improvement site Angi says that currently, it costs an average of $180,000 to add an ADU. An attached ADU or conversion of an existing structure will probably cost less, but still may cause sticker shock. Size, features, and the cost of professional services, permits, and any financing come into play.

•   Occupancy requirements Some local ordinances require that a home that has an ADU be owner-occupied in some capacity. That means a property with an ADU may not be the right fit for someone who wants to rent out the entire property.

•   Higher taxes On one hand, adding value to your property is a good thing. On the other hand, an ADU can make a property tax bill spike.

•   A smaller yard Unless a homeowner is retrofitting an ADU into their existing dwelling, building an ADU will cut down on outdoor space.

•   Financing Can be tricky. Learn more below.

Recommended: 8 Steps to Buying a Vacation Home

Ways to Pay for an ADU

While ADUs have different shapes and designs, they have a commonality: a price tag. If homeowners don’t have cash on hand to finance the build, they’ve got a few options to move forward.

A home improvement loan is a personal loan used to pay for a home renovation or update. When a homeowner takes out a home improvement loan, it’s not secured by the property — meaning the home isn’t collateral in the transaction.

A home equity loan or home equity line of credit (HELOC) leverages homeowners’ equity in a property and allows them to borrow money against the value of the home. Unlike a home improvement loan, a home equity loan or credit line is tied to the house, meaning the property is used as collateral. A home equity loan provides you with a lump sum of funds at one time and typically has a fixed interest rate. With a HELOC, homeowners can draw different amounts at different times, typically with a variable interest rate.

With sufficient equity in your home, homeowners could also consider a cash-out refinance. This replaces your current mortgage with a larger one, paying off the original loan and giving you additional cash, drawn against your equity.

Recommended: How to Apply for a Personal Loan

The Takeaway

Determining if an accessory dwelling unit is the right move for a homeowner comes down to needs, preferences, and finances. ADUs have pros and cons, but many areas have eased the way for this cottage industry. The average cost of $180,000 for a newly installed ADU can require financing. Homeowners who don’t have much equity in their property or don’t want to use their home as collateral may want to consider a personal loan to cover ADU costs.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What does ADU mean?

ADU stands for accessory dwelling unit, and it can refer to an additional dwelling on a lot that already has a single-family property on it.

How much do ADUs cost?

The cost of an ADU can vary tremendously depending on the size, location, style, and other factors (attached or freestanding) of the dwelling. Angi reports a current average price of $180,000.

How can an ADU be used?

Depending on your needs and local zoning, you could have a parent or adult child live in an ADU, you could rent it out, you could have guests stay there, or you could use it for a studio or home office, among other purposes.

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.

SOPL-Q225-046

Maybe you’ve considered refinancing your mortgage, but haven’t quite decided. Is now the right time? Will rates go lower?

It can be hard to know when to take the plunge.

Whether you purchased a home recently or bought a home years ago, you probably know the average mortgage rates now are high compared to the near-historic lows in early 2021.

But as with any financial rate or data point, it is hard – if not impossible – to time the market or predict the future.

Homeowners often look to refinance when it could benefit them in some way, like with a lower monthly payment. Refinancing is the process of paying off a mortgage with new financing, ideally at a lower rate or with some other, more favorable, set of terms.

Here are seven signs that locking in a new mortgage could be the right move.

7 Signs It May Be Smart to Refinance Your Mortgage

You Can Break Even in Two Years or Less

Refinancing a mortgage costs money — generally 2% to 5% of the principal amount. So if you are refinancing to save money, you’ll likely want to run numbers to be sure the math checks out.

To calculate the break-even point on a mortgage refinance — when savings exceed costs — do this:

1.    Determine your monthly savings by subtracting your projected new monthly mortgage payment from your current monthly payment.

2.   Find your tax rate (e.g., 22%) and subtract it from 1 to get the after-tax percentage of the savings.

3.   Multiply monthly savings by the after-tax percentage. This is your after-tax savings.

4.   Take the total fees and closing costs of the new mortgage loan and divide that number by your monthly after-tax savings. This yields the number of months it will take to recover the costs of refinancing — or the break-even point.

For example, if you’re refinancing a $300,000, 30-year mortgage that has a fixed 7.50% rate to a 6.50% rate, refinancing will reduce your original monthly payment from $2,098 to $1,896 – a monthly savings of $202. Assuming a tax rate of 22%, the after-tax percentage would be 0.78, which results in an after-tax savings of $157.56. If you have $12,000 in refinancing costs, it will take about 76 months to recoup the costs of refinancing ($12,000 / $157.56 = 76.2).

The length of time you intend to own the home can affect whether refinancing is worth the expense. You’ll want to run the calculations to make sure that you can break even on a timeline that works for you. But two years is a general rule of thumb.

The rate and fees usually work in tandem. The lower the rate, the higher the cost. (“Buying down the rate” means paying an extra fee in the form of discount points. One point costs 1% of the mortgage amount and lowers your interest rate by 0.25%.)

If you’re shopping, each mortgage lender you apply with is required to give you a loan estimate within three days of your application, so you can compare terms and annual percentage rates. The APR, which includes the interest rate, points, and lender fees, reflects the true cost of borrowing.

2. You Can Reduce the Rate by at Least 0.50%

You may have heard conflicting ideas about when you should consider refinancing. The reason is that there is no one-size-fits-all answer; individual loan scenarios and goals differ.

One commonly cited rule of thumb is that the home refinance rate should be a minimum of two percentage points lower than an existing mortgage’s rate. What may work for each individual depends on things like loan amount, interest rate, fees, and more.

However, the combination of larger mortgages and lenders offering lower closing cost options has changed that. For a large mortgage, even a change of 0.50% could result in significant savings, especially if the homeowner can avoid or minimize lender fees.

If rates drop low enough, you might even choose to take a higher rate with a no closing cost refi.

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

3. You Can Afford to Refinance to a 15-Year Mortgage

When you refinance a loan, you are getting an entirely new loan with new terms. Depending on your eligibility, it is possible to adjust aspects of your loan beyond the interest rate, such as the loan’s term or the type of loan (fixed vs. adjustable).

If you’re looking to save major money over the duration of your mortgage loan, you may want to consider a shorter term, such as 15 years. Shortening the term of your mortgage from 30 years to 15 years will likely cost you more monthly, but it could save thousands in interest over the life of the loan.

For example, a 30-year $1 million loan at a 7.50% interest rate would carry a monthly payment of approximately $6,992 and a total cost of around $1,517,172 in interest over the life of the loan.

Refinancing to a 15-year mortgage with a 5.50% rate would result in a higher monthly payment, about $8,171, but the shorter maturity would result in total loan interest of around $470,750 -– an interest savings over the life of the loan of about $1,046,422 vs. the 30-year term.

One more perk: Lenders often charge a lower interest rate for a 15-year mortgage than for a 30-year home loan.

4. You’re Interested in Securing a Fixed Rate

Borrowers may take out an adjustable-rate mortgage because they may get a lower rate (at least initially) than on a fixed-rate mortgage for the same property. But just as the name states, the rate will adjust with market fluctuations.

Typically, ARMs for second mortgages such as home equity lines of credit are “pegged” to the prime rate, which generally moves in lockstep with the federal funds rate. First mortgage ARM rates are tied more closely to mortgage-backed securities or the 10-year Treasury note.

Even though ARM loans come with yearly and lifetime interest rate caps, if you believe that interest rates will move higher in the future and you plan to keep your loan for a while, you may want to consider a more stable fixed rate.

Refinancing to a fixed mortgage can protect your loan against rate increases in the future and provide the security of knowing how much you’ll be paying on your mortgage each month, no matter what the markets do.

5. You’re Considering an ARM

You may also be considering a move in the other direction—switching from a fixed-rate mortgage to an adjustable-rate mortgage. This could potentially make sense for someone with a 30-year fixed loan but who plans to leave their home much sooner.

For example, you could get a 7/1 ARM with a potential lower interest rate for the first seven years, after which the rate may change once a year, when up for review, as the market changes. If you plan to move on before higher rate changes, you could potentially save money.

It’s best to know exactly when the rate and payment will adjust, and how high. And it’s important to understand the loan’s margin, index, yearly and lifetime rate caps, and payments. For further details, try using an online mortgage calculator

6. You’re Considering a Strategic Cash-Out Refi

In addition to updating the rate and terms of a mortgage loan, it may be possible to do a cash-out refinance, when you take out a new loan at a higher loan amount by tapping into available equity.

The lender will provide you with cash and in exchange will increase your loan amount, which will likely result in a higher monthly payment.

If you go this route, realize that you’re taking on more debt and using the equity you have built up in your home. Market value changes may result in a loss of home value and equity. Also, a mortgage loan is secured by your home, which means that the lender can seize the property if you are unable to make mortgage payments.

A cash-out refi may make sense if you use it as a tool to pay less interest on your overall debt load. Using the cash from the refinance to pay off debts carrying higher rates, like credit cards, could be a good move.

Depending on loan terms and other factors, a lower rate may allow for overall faster repayment of your other debts.

Recommended: How Does Cash-Out Refinancing Work?

7. Your Financial Situation Has Improved

When putting together an offer for a mortgage, a lender will often take multiple factors into consideration. One of those is prevailing interest rates. Another is your financial situation, including things like your credit history, credit score, income, and debt-to-income ratio.

The better your personal financial situation in the eyes of the lender, the more creditworthy you are – and the better the terms of your loan offer could be.

Therefore, it may be possible to refinance your mortgage loan into better terms if your financial situation has improved since you took out the original loan, especially when paired with relatively low market rates.

The Takeaway

Is it time to refinance? It might be if you could get a lower interest rate or better loan term. For instance, locking in a lower rate now may help you achieve your long-term goals by freeing up cash for other stuff, like retirement or a big vacation.

SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.

FAQ

How do you know if it’s the right time to refinance?

To see if now is a good time for you to refinance, you can calculate your break-even point – when your savings exceed your costs. You can do this by dividing the total closing cost amount by the net monthly savings you’d get from the refinance. This will give you the number of months it will take to pay off the closing costs and let you know where the break-even point is.

What is the timeline for refinancing?

Refinancing typically takes between 30 and 45 days, though it can vary. Being prepared with relevant documents and responsive to requests can expedite the process.

How long after signing a mortgage can you refinance?

The length of time required after you sign a mortgage to when you can refinance can vary based on the type of loan. For conventional loans backed by Fannie Mae or Freddie Mac, you may be able to refinance immediately. However, there may be a “seasoning period” of six months required by your lender before you can refinance with that lender. FHA loans have a waiting period of 210 days to 12 months; VA loans require 210 days or six on-time payments, whichever comes later; and USDA loans can be refinanced after 12 months of on-time payments. Jumbo loan terms are set by the lender.

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.

Homeownership comes with plenty of perks, But one important financial benefit is the opportunity to build home equity, which is how much of a property you actually own. Home equity is considered a common way to generate wealth over time.

Read on to learn how homeowners can help build equity and increase the value of their home.

What Is Home Equity?

In order to understand how building home equity works, it’s important to understand exactly what it is.

Equity is the amount of your home you actually own. More specifically, it’s the difference between how much you owe your lender and how much your home is worth.

To calculate home equity, simply subtract the amount of the outstanding mortgage loan from the price paid for the home. So if a home is worth $350,000, and the homeowner owes $250,000 on their mortgage, they have $100,000 of equity built up in their house. Their mortgage lender still has an interest in the home to the tune of $250,000 and will continue to have an interest in the home until the mortgage is paid off.

7 Smart Ways to Build Your Home Equity

Here, learn some techniques for growing home equity.

1. Making a Big Down Payment

Homeowners can get a jump on building home equity when they’re buying a home by making a large down payment.

Typically, homebuyers using a conventional loan will put down at least 20% as a down payment to avoid having to pay mortgage insurance. That means that right off the bat, the homeowner has a 20% interest in their home. They can increase this amount by putting even more down. A down payment of 30%, for instance, will increase equity and potentially give the homebuyer more favorable mortgage payments and terms. (It can also help you avoid paying mortgage insurance.)

If making a large down payment means having less in emergency savings, however, the home buyer may want to use other methods to build equity.

2. Prioritizing Mortgage Payments

Each mortgage payment a homeowner makes increases the amount of equity they have in their home. Making mortgage payments on time will avoid potential late fees.

Keep in mind that a portion of each mortgage payment goes toward interest and sometimes escrow. You’ll want to take these amounts into account when calculating how much equity is accruing.

3. Making Extra Payments

Extra payments chip away at a loan’s principal, help build equity faster, and potentially save thousands of dollars in interest payments. Even if it’s only a little bit each month, paying more than your regular mortgage payment amount can help you increase how much home equity you build.

If adding some extra cash each month isn’t feasible, perhaps making one-time payments whenever possible — when you get a bonus at work, for instance — would be an option. Using a money windfall this way can help you build equity more quickly.

To ensure those payments are applied correctly, be sure to notify the lender that any extra or lump-sum payments should be put toward the loan’s principal.

Beware that some lenders may charge a prepayment penalty to borrowers who make significantly large payments or completely pay off their mortgage before the end of the term. Before making extra payments, consider asking the lender about a prepayment clause.

4. Refinancing to a Shorter Term

You may also consider refinancing with a loan that offers a shorter term. For example, a homeowner could refinance their 30-year mortgage to a 20-year mortgage, shaving off up to a decade of mortgage payments. However, doing so means they will also be increasing the amount they pay each month.

Still, shorter-terms loans may have the added benefit of lower interest rates, which could soften the blow of higher monthly payments.

Mortgage refinancing is not necessarily a simple process, nor is it guaranteed that a lender will offer a new loan. Homeowners can increase their chances of securing a refinanced mortgage by maintaining healthy credit and a low debt-to-income ratio. It may also help to have equity built up in the home already.

5. Renovating Your Home

Making home improvements typically increases the value of a home, which will likely increase equity. Renovating a home’s interior can be a good place to start.

Minor renovations like updating light fixtures and repainting can add some value to a home. Larger projects such as updating the kitchen, adding bathrooms or finishing the basement may yield good returns on the investment.

Weighing present cost against potential future gain may be a good thing to do before tackling a big project. The idea is that making these improvements now, and then being able to sell at a premium will mean recouping your expenses and then some. An online home improvement project calculator can help you estimate the cost of projects and how much value they could potentially add.

6. Sprucing Up the Outside

Similarly, adding to a home’s curb appeal may also increase its value. A fresh coat of paint, a well-maintained lawn, and tasteful landscaping could help increase a home’s desirability and the amount that buyers are willing to pay.

Mature trees, for example, can potentially add thousands of dollars to a home’s resale value. If you’re thinking of selling in a decade or more, planting a tree now could have a big effect on sale price later.

Increasing usable outdoor space by adding a deck or patio and installing good outdoor lighting may increase the value of your home.

7. Waiting for Home Values to Rise

The real estate market is always evolving, and sometimes, playing the waiting game could help you build equity. For instance, if your neighborhood becomes more popular, home prices could start to rise. If that happens, it may be worth keeping a home there longer to take advantage of the trend. Of course, the flip side is that housing prices may drop over time, which could mean a loss in equity.

Why Build Home Equity?

Building home equity is important because it gives the homeowner the opportunity to convert that equity into cash when the need arises. This is commonly done when a home is sold. But the equity in a home can also be important when taking out a home equity loan, which could allow the homeowner to use the value of their home while still living there.

For a home equity loan, a lender provides a lump-sum payment to the borrower. The amount must be repaid over a fixed time period with a set interest rate. As with a personal loan, home equity loans can be used for a variety of purposes. The loan is backed by the value of the home and typically must be repaid in full if the home is sold.

A home equity line of credit, or HELOC, is a revolving line of credit that uses the value of the home as collateral. Unlike lump-sum loans, a HELOC allows the homeowner to borrow money as needed up to an approved credit limit. That amount is paid back and can be drawn on again throughout the course of the loan’s draw period. While a person’s home is likely to be their most valuable asset, it’s also valuable purely because of its provision of shelter.

Researching and understanding all of the risks involved with loans that use a home as collateral, including that it could be lost if the loan is not paid back, is important before considering this option.

Of course, there may be times in your life when you want to access cash but you prefer not to tap into your home equity loan. For those times, a personal loan may be a good option, allowing you to access a lump sum of cash (typically, from a couple of thousand dollars to $50,000 or $100,000) to use for almost any purpose, such as a home renovation, a big medical bill, or a vacation.

In this case, you would repay the principal and interest over a term that’s usually two to seven years. Interest rates for an unsecured personal loan tend to be somewhat higher than those for secured loans in which collateral is involved.

The Takeaway

There are many ways to build equity in a home. Different strategies include making a large down payment or extra monthly mortgage payments, refinancing to a shorter term, renovating your home, or waiting for home values in your area to rise. Whatever your strategy, home equity can provide you with a valuable resource that can be used when a financial need arises. Often this resource is tapped into by means of a loan that is secured by the home. However, this means if the loan is not repaid, a homeowner could lose their home. If you want to avoid using a home as collateral for a loan, consider a 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. See your rate in minutes.

FAQ

What is the fastest way to build home equity?

Among the faster ways to build home equity are to make a larger down payment and to apply money windfalls to the principal of your home loan.

What is the three-day rule for home equity?

The 3-day rule for home equity says that you can cancel a home equity loan or a HELOC within three days without any penalties, provided you are using your main residence as collateral.

What credit score do you need for a home equity loan?

Many lenders want to see a credit score of at least 620 to approve a home equity loan. Usually, the higher your score, the more favorable your rate and loan terms will be.

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.

SOPL-Q225-048

Replacing windows can range tremendously in price, with basic, standard-size windows costing just $100 or so to expansive, custom bay windows that can run $7,000 or more. Having quality windows can not only make your home look better, it can boost energy efficiency, too. Here, learn more about this important home improvement project and the usual costs.

How Much Do Windows Cost?

A standard new window, installed, can cost anywhere from $500 to $1,000, according to Home Depot. Those prices, however, can go much higher if you are shopping for something special, such as a bay or casement window, wood vs. vinyl windows, or a custom size.

Window frames are commonly made of wood, vinyl, metal, or fiberglass.

•   Of those, vinyl windows are the most popular choice. The average cost of a double-hung, double-pane vinyl window, is around $600 in 2025. Installation, according to HomeGuide, can add another $300 to the cost.

   Vinyl windows typically last for 30 years, don’t need to be painted, and are easy to clean. Compared with their cheaper cousin, aluminum, vinyl windows excel when it comes to insulation and improving energy efficiency, and they will not rust.

•   Fiberglass and fiberglass-composite windows are stronger than vinyl. Like vinyl, they offer a high degree of energy efficiency, and with both types of window, there are options to enhance the energy efficiency. Expect to pay $600 to $2,000 for one fiberglass window, installed.

•   Wood windows can lend a classic look. Expect to pay more — around $875 to $1,875 in 2025, including installation, according to This Old House. Custom sizes and styles can cost significantly more. Wood windows tend to be harder to maintain than vinyl windows, given that the paint can peel or the wood can start to rot if it gets wet.

Recommended: How Much Does It Cost to Remodel or Renovate a House?

When Should I Replace My Windows?

If you’re thinking about replacing your windows, consider these questions. First, do your windows show any damage? Are they drafty, or have you noticed an increase in your electrical bills in the winter when the heat is on, or in the summer when the air conditioning is on?

Is there frequent moisture buildup, or condensation, on the outside of the glass, or is moisture trapped between layers of glazing, signaling leaky seals? Can you hear too much noise outside? Are you ready for a new look?

If the answer to any of these questions is yes, it may be time to consider replacing your windows. Or if you are on a smaller budget, consider repairing them.

If you’re buying a new home, an inspection will be a part of your mortgage process. It’s best to have the windows inspected, and if there are major issues, try to negotiate for their replacement before you close on the house.

Can I Repair Old Windows?

If your windows are in pretty good shape, it may make sense to repair or update them rather than replace them. Doing so can be a cost-effective way to help you save money on energy costs and reduce drafts and moisture in your home.

•   Check windows for air leaks.

•   Caulk and add weather stripping as needed.

•   Consider solar control film that can block heat and reduce glare.

•   If a pane is cracked, in a pinch the glass alone can be replaced with an insulated glass unit.

Recommended: What Are the Most Common Home Repair Costs?

How Long Do Windows Last?

The lifespan of a window depends on a number of factors, such as quality and type of material, local climate, and proper installation. In general, you can expect windows to last 15 to 30 or even 50 years.

Wood windows can last a long time, but might require a bit of maintenance on your part, whereas vinyl or fiberglass windows may require none. Fiberglass typically lasts the longest period of time.

Your local weather can play a big part. Extreme heat or cold can shorten the lifespan, salt spray from the ocean can corrode window exteriors, while humidity can lead to warping or rotting.

Whether or not a window is properly installed can also impact how long it lasts. If it is sealed improperly, for example, moisture may get in and damage the frame.

Finally, consider how much a window is used. Normal wear and tear on parts in windows that are opened and closed frequently can lead to replacement more often than windows that are rarely opened.

Should I Replace All My Windows at Once?

Whether or not you decide to replace all of your windows at once will largely depend on your budget. Consider that the price to replace 10 windows in a modest house could be several thousand dollars.

However, replacing all your windows at once can yield bulk savings, qualify for discounts, and save by having installation done once vs. paying for multiple visits. You might consider a home improvement loan (which is a kind of unsecured personal loan) to get the job done all at once if you don’t have enough cash saved up.

If you don’t have the budget to replace all your windows in one go, it’s common to swap windows out in stages. In this case, windows at the front of the house are generally the first to be replaced. They’re public-facing and add to the curb appeal of the home. The windows in the back of the house tend to come next, followed by any upstairs windows.

What Type of Window Should I Buy?

The first thing to consider is materials. You might consider wood windows if you’re trying to match them to an existing wood exterior or trim. You might choose fiberglass or composite for its durability and ability to look like painted wood. Or you might decide on vinyl for its affordability.

You’ll also want to consider the many types of windows available. For example, single-hung windows are among the most popular and cheapest options. They have a fixed upper window and allow you to open a lower window sash.

Double-hung windows are pricier but have two moving window sashes that allow for increased airflow and easier cleaning. There are also bay windows, arched windows, sliding windows, and many more to choose from.

The glass option you choose is an important decision. There are a variety of insulating options, such as dual-pane or triple-pane windows. Glass can be treated with a low-emittance coating to reflect heat in the summer and keep it in in the winter.

In climates where you need to cool the house for much of the year, consider three-coat low-e glazing, which best reduces heat from the sun. In colder climates that require more heating, it may make sense to go with a two-coat low-e treatment.

The space between glass may be filled with a nontoxic gas that can provide better insulation than air.

What’s the Best Time of Year for Replacing Windows?

Spring and fall tend to be the most popular times to replace windows. That’s because in these more moderate months, you don’t have to worry about winter air getting into your house, requiring you to jack up your heat or close off rooms to control drafts. The same holds true for summer: Avoiding the hot season can help you sidestep blasting the a/c as windows are taken out and replaced. These factors can be especially irksome if you’re having multiple windows replaced.

Weather can affect how materials behave. For example, caulk doesn’t adhere well in extreme cold, nor does it cure well in very high temperatures. As a result, you may want to aim to replace windows when temperatures are between 40 and 80 degrees.

If you can stand the cold, you may be able to secure a discount to have windows installed in the winter. A contractor can help you decide on the right time of year to have your new windows installed.

The Takeaway

The cost of replacing windows depends on the materials (wood, vinyl, fiberglass), style, size, and labor costs. Prices can range from several hundred to several thousand dollars per window. Think of new windows as a long-term investment that may provide energy savings, visual appeal, and, potentially, enhanced resale value. Typically, people finance them from savings or with a 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. See your rate in minutes.

FAQ

What is the average price for replacement windows?

Windows can typically cost anywhere from $100 or so to a few thousand dollars each, depending on such factors as size, material, and where you live and purchase from. As you might guess, custom windows can be pricier than standard-size ones.

Is it cheaper to replace all windows at once?

Yes, it can be cheaper to have all your windows replaced at once. You might save on a bulk purchase, qualify for discounts, and pay less by having installation done just once vs. having contractors make multiple visits.

Should I replace windows that are more than 20 years old?

Yes, windows that are 20 years or more old and are experiencing issues like drafts, condensation, and diminished energy efficiency can benefit from replacement. They may not be at the very end of their lifespan but could probably be nearing the date that they should be upgraded.

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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.

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Whether you’re thinking about a small bump-out or a full-blown two-story addition, increasing the size of your home can make it more functional, look more attractive, and increase its resale value. The trouble is, additions tend to be big, time-consuming, and expensive projects — and they can easily go wrong if you don’t plan them right. Read on to learn six key steps that will help you complete an addition on time, on budget, and with the least possible amount of stress.

How to Get Started With a Home Addition

Home additions can boost the value of the home while enhancing aesthetics and functionality. In fact, home additions and renovations can be among the most effective ways to increase your home’s value, and you can tailor the construction to fit your needs and wants.

To transform your home addition ideas into a completed project, there are a few steps to consider first:

•  Create a plan.

•  Set a clear budget.

•  Work with trusted professionals.

•  Decide what parts of your home addition you can do yourself.

•  Research and obtain permits.

•  Fund your project.

Create a Plan for Your Home Addition

Perhaps you’re adding an extra bedroom and bathroom to the back of your house so you have a place for guests to stay. As part of the process, you’ll need to first make sure that the addition will fit within your property lines. You’ll also want to check with your local government to see how closely codes in your city allow you to build next to someone else’s property.

While creating your home addition plan, also ensure that any construction will not interfere with utility lines or pipes, as well as whether the structural changes you’re considering will fit into the framing and foundation of your building.

As you design the addition, think about them from two perspectives: first, how these rooms will add value to your living space; then, how the construction will impact the outside of your home, architecturally speaking.

You’ll also need detailed plans drawn up by an architect or builder that describe the scope of the work and the materials needed. To consider how home additions may increase the value of your home, you may want to use an online home project return on investment (ROI) calculator.

One strategy for approaching home additions is to create your dream list, then have alternate choices in mind if your budget, material availability, or other external factors create a need to alter the project down the road. For example, you may love the look of marble flooring, but its price point might be higher than you’d initially estimated — or perhaps it doesn’t blend in with the rest of your house once you’ve started laying out the plans. Having a back-up plan — and one that’s cost-efficient at that — could help keep your budget in check.

The cost for an addition will depend on the size and type of addition, as well as where you live, but you can expect to pay somewhere in the neighborhood of $100,000 to $300,000 to add 1,000 square feet to a house.

Also keep in mind that if you want your addition to blend in with the rest of your house, you also may need to plan for improvements in existing rooms.

Set a Clear Budget for Your Home Addition

To come up with a budget for your home addition, it’s a good idea to obtain bids from three different contractors, adding in 15% to 20% to the overall project price given by the contractor to cover unforeseen costs.

If the ballpark figure is too high and doesn’t align with your budget, then you might want to look at alternative choices for materials that will still give you the general renovation you desire. You could also scale back on your plans or save some of the more costly home addition projects for the future when your budget allows.

If you intend to work with a specific contractor, then your chosen company may be able to help you find lower-cost options — for example, replacing granite countertops with laminate ones — and offer creative solutions gleaned from years of industry experience. Or, you may want to look at reducing the scope of your project to a smaller addition or even asking the contractor for competitive pricing for the off-season.

Work With Trusted Professionals

Whether you do some of the home addition work yourself or plan to have the professionals build the entire addition, it’s crucial that you hire the right contractor for your needs. Tips for working with contractors include:

•  Get three to six bids, then research companies that seem like good matches. You can check for information about these contractors at LinkedIn, Angie’s List, and the Better Business Bureau. Have any complaints been filed at your state’s contractor board?

  For contractors who interest you, you may want to reach out to references they provide for personal experiences from past clients.

•  Be wary of suspiciously low bids. If a quote comes in significantly lower than that of the other contractors who bid your home addition project, it’s possible that the contractor did not understand exactly what you want. This can lead to significant problems if you hire this company without clarifying specifics.

•  Hire a contractor who you think you can work well with, but don’t base your decision largely on emotion.

Decide What Parts of Your Home Addition You Can Do Yourself

Say the home addition ideas you have are necessary to solve space problems, perhaps you’re having a baby, or maybe your mother is moving in with you — but you’ve got to find a way to contain the costs of the addition. In this case, it might make sense to figure out what you can do yourself.

If you’ve got the experience needed to do the demo work safely without damaging load-bearing walls, electrical wires, and the like, this can save you some money on labor. If you’ve got professional-level skills in plumbing or drywall, you might talk to your contractor about taking on those tasks yourself and further reducing the cost of labor. Or you can attempt to do the finish work, such as sanding walls, painting, and general cleanup.

Research and Obtain Permitting Requirements

Unfortunately, a home addition isn’t as simple as deciding what you want to do, saving up, then paying for the work. You also need to make sure your home is appropriately zoned for the home addition or remodel. Depending on the scope of the project, you may or may not need a permit.

For example, if you want to build a deck in some states, you need a permit if you intend for it to be more than 30 inches off the ground. Getting to know your local codes can help you overcome significant hurdles as the project unfolds, which often will save time and money for homeowners.

Strategically Fund Your Project

To find materials for your home addition on a budget, you could shop at stores like a Habitat for Humanity ReStore, attend auctions, or explore similar options to find salvaged materials. If you’re employing a contractor, however, you’ll want to make sure they are willing to work with recycled materials and ones that may not be standard size.

For a higher-priced project, it might be tempting to use credit cards to pay for expenses. If you’re doing this to maintain a record of your spending or to take advantage of credit card reward points, this can be a good strategy provided you can pay off the balance quickly, ideally within a single billing cycle.

But when you can’t pay off the balances, it can be easy to get caught up in a spiral of debt. And credit card debt is especially challenging. Why?

Credit card interest rates are notoriously high. What’s more, credit card companies typically compound daily, which means they calculate the interest you owe daily and add that to the card’s balance. You then pay interest on your balance, plus any accrued interest, until you pay your balance off in full.

Getting a Home Improvement Loan for Your Home Addition

If you don’t have enough cash to pay for your addition in full and up front, and don’t want to run up credit card debt, you might consider getting a home improvement loan. This is essentially an unsecured personal loan that is used for home upgrades and renovations. Unlike a home equity loan or line of credit, you don’t need to have any equity built up in your home, or use your home as collateral for the loan.

With a home improvement loan, you receive a lump sum up front which you can use to pay for your addition. You then repay the loan over a set term, often five to seven years, with regular monthly payments. Interest rates are typically fixed.

The Takeaway

A home addition can increase the value of your property while also allowing you to retrofit your house to your current lifestyle. There are many factors that figure into a big decision like a renovation — including how you’ll pay for it — and it’s important to consider the project from as many angles as possible.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Is it worth it to put an addition on a house?

Adding on to your home can be expensive, but the investment is often worthwhile. Home additions typically provide a good return on investment. According to the home services site Angi, you can see a return toward the value of your home of between 50% to 60% for most additions.

When should I start planning a home addition project?

Before starting a home addition, you’ll want to give yourself at least two months to plan and design, hire a contractor, and secure the required permits.

What are some mistakes to avoid with a home addition?

Adding on to your home is a major project, but there are steps you can take — and pitfalls you can avoid — to help the work go smoothly. For starters, be sure you understand and comply with all the building codes and regulations in your area. And obtain all necessary permits before work begins. You’ll also want to set a realistic budget. Your contractor can help you understand the costs involved and how much to set aside for unexpected expenses.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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.

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