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How to Save Money for a House

The moment you decide to buy a house is a huge one, even if it just pops into your head on a whim. It might happen while you’re getting a tour of your friend’s renovated farmhouse, or waiting for the landlord to come fix the dishwasher again. But when it happens, it changes everything.

Your first thoughts are likely excitement at the idea of having your very own space to call your own, whether it’s a countryside ranch or a high-rise condo, and you’ll join the steadily rising numbers of Americans who are choosing to become homeowners.

But for better or worse, it’s not as simple as writing a check and moving in (at least, not for most of us.) Along with being one of the biggest decisions you’ll make, purchasing a home can also be one of the most expensive.

And if you’re currently strapped with credit card debt, student loans, rent, or other large bills, it could be easy to get discouraged.

With planning, budgeting, and a solid savings plan, however, there are many roads to home ownership. Here are some key considerations for saving up for your dream home.

Consider All the Costs

Saving money for a house is about more than you might think. It might start with a down payment and closing costs, but it can also include costs like, moving expenses, buying new furniture, sprucing up the landscaping, and even that first stock-up trip to the grocery store after you move in.

And while the decision to buy might be easy, the actual buying process can require discipline, mental fortitude, and a lot of stick-to-itiveness. So grab a calculator (and maybe a glass of wine) and start drawing your financial picture.

Down Payment

A myth that’s been percolating in culture for a while, especially for potential homebuyers age 45 and over , is that a 20% down payment is required in order to purchase a house. The reality, though, is that the median down payment on a conventional loan was around 13% last year.

To come to your real-life goal for a down payment, you can start by calculating how much house you can afford.

One option you can look into for your mortgage loan is government programs that offer low or no-down-payment mortgage options:

•  Federal Housing Administration (FHA) loans are government-backed loans. For those that qualify, they may require that only a 3.5% down payment at credit score of 580 or higher. Loan limits apply by property location.

•  United States Department of Agriculture (USDA) loans offer up to 100% financing in rural areas for eligible properties and borrowers.

•  Veterans Administration (VA) loans are available for military service and eligible family members with up to 100% financing.

Even though 20% down isn’t a given these days, it might still be a good idea for a number of reasons if you can swing it. First, you avoid paying private mortgage insurance (PMI), which is used to insure the lender against loss on a loan with less than 20% down. Putting 20% down could potentially mean lower monthly payments, less interest overall, a quicker path to home equity and more .

Closing Costs

In addition to your down payment, you’ll likely need to come to the table with your portion of the closing costs. These include fees that go along with the home buying and loan approval process, such as lender fees, payments to the home inspector, appraiser and surveyor, escrow payments, attorney and title fees, —it’s a long list, and typically falls between 2% and 5% of the home purchase price and while it’s true that closing costs can be a point of negotiation with both the seller and the lender, it can’t hurt to err on the side of caution and budget for the mid to higher percentage range on lower loan amounts. It’s good to note that some closing costs amounts are fixed no matter the loan size or purchase price.

Moving Costs

One easy way to cut down on moving costs is to DIY the entire process, from finding free moving boxes from friends, family, and grocery stores to loading and driving your stuff across town in a friend’s truck. It’s safe to say that even the most frugal moving strategy, however, will likely incur some costs.

So even if you have every intention of moving on the cheap, it could be a smart idea to get some moving quotes. If you have a lot of stuff, or specialty items that need to be moved, or if you’re heading across the country, moving can cost thousands of dollars. At least having a ballpark figure in your head could be helpful in determining how much you’ll need to save.

Repairs and Decor

It may be difficult to estimate these costs before you have an accepted offer on a home, but it is good to keep in mind. One final line item to consider is how much you would like to put into decorating or repairing your new home.

If you’re moving to a larger space, will you need an extra bedroom set? Are you thinking the back yard is perfect for a fire pit, or even a pool? If you are considering a fixer-upper, repairs or upgrades could be thousands of dollars.

One bit of good news here is that you may not have to fork out the cash in order to pay for renovations. The FHA offers 203k rehab loans to homebuyers. Eligible improvements include structural repairs, elimination of health or safety hazards, modernization, adding or replacing roofing and you can also add loan fees and mortgage payments during renovation up to the maximum loan amount.

Luxury items such as pools, hot tubs are not eligible. The program was designed to not only help homeowners improve their own properties, but to elevate communities.

In addition, considering a fixer-upper could be a more affordable way into the housing market. The property might be available for less than market value due to needed work, and any sweat equity you put into the house could equal larger returns down the road. That said, keep in mind that not all properties are eligible for financing due to structural or other issues and the costs of home repairs can add up quickly, so it’s essential to do your research in advance.

Establish Your Timeline

It’s often one of the first questions on those online home-buying questionnaires: When are you planning to buy your home? And the answer can vary widely, from “Not until I have the money” to “I’ve already found my dream home.”

For renters, the situation is far from perfect. According to Zillow subsidiary Hotpads, a U.S. renter can expect to spend an average of 6.5 years saving for a 20% downpayment on a median-priced home. And we don’t blame you if that seems like exactly forever years from now.

There’s that really long timeframe again, but a long-term roadmap can give you time to build or improve your credit if necessary, start saving and pay down some debt (all of which could improve your position with lenders).

Another approach to a realistic timeline is that once you identify the loan program that best fits your needs and have an estimate of how much money you will need under this program, divide the total that you need to save by the amount you can afford to save each month. That can give you the number of months—or years—are left before you can buy that house.

Make an Savings Plan

Once your timeline is in place, you can choose to invest your money in ways that can help you either get to closing day sooner, or save even more than you need.

One way to think of investing for a down payment is to compare it to a retirement plan, where a common approach is to save aggressively when you’re younger, then start to your investments into more stable options as you get close to retirement.
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Here’s some ways you could apply this philosophy to saving for a down payment:

•  If your timeline is under 3 years, consider a conservative portfolio, or maybe a high-yield savings account.

•  If you are looking at 3 to 5 years, consider a conservative or moderately conservative portfolio that can grow your money faster than a cash-based account.

•  If closing day is 5 to 10 years in the future or more, consider a moderate or moderately aggressive investment portfolio that can yield higher returns in the long run.

Dealing with Debt

A lot of open, revolving debt could hinder your savings plan in a number of ways, from leaving you with little or no money left over for savings to not qualifying for a home loan.

A number of factors come into play when applying for a mortgage, including your debt-to-income ratio (DTI). Lenders use this number to assess your risk as a customer, whether you have too much debt to be able to afford your monthly mortgage payments.

Qualifying DTIs can vary depending upon elements such as credit, type of property and other. For Non Conforming or Jumbo loans, Lenders generally look for a DTI maximum of 43%. Conforming loan programs can have an eligible DTI range of up to 50%, depending upon different factors.

When you’re dealing with a long list of bills and debts, consider ways to make those payments work hardest for you. Take, for example, these three ways to approach putting as much money toward debt as possible without having to remove it from your daily budget.

•  The snowball method, made popular by financial guru Dave Ramsey, is based on the philosophy that little steps can lead to big changes. Here’s how it works: Make a list of all your debts, then put extra money toward your lowest balance first while paying the minimum on the others. Once that debt is paid off, you can apply that entire payment to your next debt on top of the minimum, rinse and repeat.

•  The avalanche method is similar, however it focuses on the highest-interest balance first. By eliminating that high-interest debt first, the theory goes, you’ll pay less debt over time as the money starts to roll downhill into your other payments.

•  The snowflake method is a bit different in that the objective is to put any and all extra money (not already budgeted) toward debt as often as possible. Called micropayments, these can be anything from credit-card cash back to the money you pocket by eating at home instead of a restaurant.That holiday money from Grandma? Goes toward debt. Same with any work bonuses.

Loan consolidation or refinancing are two other ways that could potentially allow you to get out from under high interest payments. While they won’t eliminate your debt, with better terms, they could help reduce the number of monthly payments you’re responsible for.

Make Adjustments Based on Progress

While creating a plan can be a smart first step, that doesn’t mean it will go off without a hitch, especially if it’s long-term. You or your partner might change jobs, unexpected medical expenses might pop up, the heating bill could go way up due to a cold winter—life happens.

That’s why it’s important to check in on your budget periodically, see how you’re doing, rebalance your portfolio if needed, and make adjustments to your plan if you’ve gotten off-track from your goal.

If you’ve suddenly increased your cash flow, for example, you could determine how to divvy up that extra money. Is your emergency fund low? Should you put it toward the house?

Use it to pay off debt? Perhaps some combination of the three. Oppositely, if you’ve encountered a financial hurdle, see if you can get creative with how you move things around. For example, can you lower or eliminate one source of spending (we’re looking at you, fancy coffee) in order to move that money toward something else?

Keeping diligent track of your income and spending can help you easily see where changes can be made, but when money is spread out across several accounts, that can be challenging.

One easy way to stay on track is to use an all-inclusive app that keeps all your money information in one spot. With SoFi Relay, for example, you can see all of your accounts in one place, set multiple goals, track your spending and more. And before you know it, you could be handed the keys to your dream home.

Ready to see your financial big picture? SoFi Relay could help.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

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What is PMI?

Buying a house is quite possibly the largest investment that most people will ever make. And when you consider that the median price of a new home in the U.S. is $342,000 , the thought of actually hitting that milestone may seem out of reach for some. It is also one of the most confusing, especially for first-timers. Homebuyers attempt to master a whole slew of new vocabulary terms, from “contingencies” to “escrow” to “fixed versus adjustable rate mortgages.”

One of the most mystifying terms is PMI, which stands for “private mortgage insurance.” When you hear “insurance,” you may think it’s there to protect you in case something goes wrong with your home loan.

Actually, PMI is there to protect the lender that’s likely offering you a conventional mortgage whether it be a refinance or a purchase loan.

If you are making a down payment of less than 20% of the home’s value, the lender will typically require PMI on the mortgage from a private insurance company. Why would you pay for insurance that benefits your lender and not you? And should you take on this expense? Read on to find out how PMI works.

Why PMI?

The purpose of PMI is to make low down payment mortgages less risky for the lender so they in turn can offer you a loan if you don’t have sufficient funds for a 20% down. If you have PMI and default on your home loan, the insurer will be responsible for paying a portion of the loan balance, so that the lender isn’t on the hook for the entire amount.

When a lender is considering whether to extend a mortgage loan, and on what terms, they look at something called the loan-to-value ratio, or LTV. This is equal to the mortgage balance divided by the value of the property.

The more money you have for a down payment, the less you need to take out a loan for, and therefore the lower your LTV ratio. Whether you’re buying a home or refinancing, the higher your LTV ratio, the more of a gamble you’re likely to appear to lenders. And they’ll usually want you to have PMI when your LTV is less than 80%, which is what happens when you put less than 20% down.

Who Takes Out PMI?

Private mortgage insurance has been around for more than 60 years . Over that time period, more than 30 million families , including 1 million in 2017, relied on PMI in order to buy or refinance a mortgage. A significant amount of those who did were low-income or buying their first homes.

Specifically, more than 40% of borrowers who have taken out PMI earned less than $75,000 a year, and 56% were first-time homebuyers. In 2017, the top five states for homeowners with PMI were Texas, California, Florida, Illinois, and Michigan.

PMI generally costs between 0.55%-2.25% of the mortgage amount annually, but premium costs can vary depending upon the loan scenario.

If you’ve found your dream home, explore
the different mortgage options SoFi offers.


How to Pay PMI

There are a few different options for paying PMI, which depend on your preferences. Most borrowers pay PMI as a monthly premium that is added on to the mortgage payment. You can see what the premium is in both the loan estimate you get when you apply for the mortgage and again in your closing disclosure.

The PMI factor can change between these two estimates because the appraisal valuation which drives the final LTV (loan to value) may be received by the lender after the Loan Estimate is generated. Another option is to pay your PMI all at once in a single sum when you close on the house. Or you can ask the lender if they can cover some or all of the PMI cost through lender rebate money.

Generally, in this scenario a borrower accepts a higher rate and the rebate money in that higher rate comes back to the borrower as a credit and the borrower can use that lender credit to cover some or all of the PMI cost. Ask a lender to generate a quote with different PMI payment options so you can compare and choose the best plan for your budget.

Keep in mind that some PMI policies are refundable and some are non-refundable. A third scenario is to pay some of the PMI up front and get the rest added on to your mortgage payment each month.

If you’re confused about the different policies and payment options, ask the lender’s representative to explain the options to you and ask for a quote on how much you will owe in different scenarios. If you are purchasing a home you may be receiving a seller credit towards your closing costs, this can be another way to cover the PMI in one lump sum and not have ongoing monthly payments.

How to Get Rid of PMI

For a principal residence or second home, the borrower can initiate cancellation of PMI under the following scenario: The LTV ratio must be:

•  75% or less, if the seasoning of the mortgage loan is between two and five years.

•  80% or less, if the seasoning of the mortgage loan is greater than five years.

If Fannie Mae’s minimum two-year seasoning requirement is waived because the property improvements made by the borrower increased the property value, the LTV ratio must be 80% or less.

For automatic termination of PMI the guidelines are:

•  Loan is closed on or after July 29, 1999 and is secured by a one-unit principal residence or second home.

•  on the applicable termination date, provided the borrower’s payments are current on the termination date.

The applicable termination date is:

•  the date the principal balance of the mortgage loan is first scheduled to reach 78% of the original value of the property, or

•  the first day of the month following the date the mid-point of the mortgage loan amortization period is reached, if the scheduled LTV ratio for the mortgage loan does not reach 78% before the mid-point.

How to Avoid PMI

PMI can come in handy for people who want to become homeowners and otherwise wouldn’t qualify for a mortgage. However, the costs can add up, and unlike other types of insurance, you’re not gaining any protections yourself. Luckily, there are ways to avoid PMI altogether.

As stated above, lenders can cover the cost of PMI through lender credit. Lender credit can be generated by the borrower taking a higher rate in exchange for rebate money which is used to pay for some or all of the PMI cost. Whether or not this higher rate ends up saving you money vs paying a lower rate and monthly PMI depends on your unique situation.

An alternative is to take out a mortgage that is not a conventional loan, such as a Federal Housing Administration Loan . FHA loans require a government insurance (MIP) which usually runs with the life of the loan. FHA loans have an upfront premium as well as a monthly premium. Whether a conventional or government loan is the best fit for you depends on many factors , such as your credit history and the mortgage market.

The most surefire way to help avoid paying PMI is to save 20% down before you buy a house. Even if it might take you a bit longer to become a homeowner, consider whether it makes sense to rent until you can save up that magic number.

There are also some loan programs that do not require PMI. VA loans would be one loan program that does not require PMI and some lenders do not apply PMI requirements to their Jumbo loan products. It is good to note that SoFi offers as little as 10% down on their Jumbo purchase loans with no PMI.

If you’d like to put away more than you currently are, start by making a budget. Note down all the money coming in and going out every month, and see if there’s room to cut expenses so that you can save a bit more. Once you’ve freed up some cash, set up an automatic transfer from your savings to your checking account to make sure that money is set aside.

If you don’t have a lot of wiggle room as far as cutting spending, you may want to consider ways to increase your income. This can include asking for a raise, applying for a higher-paying job, or taking on a side hustle.

If you can save 20% down before applying for a mortgage and avoid PMI, you may save yourself a significant chunk of money for years to come. That said, only you can decide whether paying PMI is worth it in your particular situation and housing market.

Looking Into a Mortgage with SoFi

With SoFi, you make your dream home a reality with competitive rates, no hidden fees, and as little as 10%. When deciding on loan eligibility, SoFi, like other lenders, will consider your credit history, your income, your employment, and other factors. You can see if you pre-qualify in just two minutes online.

Explore a mortgage loan with SoFi.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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Are You Ready to Buy a House? – Take The Quiz

Buying a house can be the biggest financial investment you’ll make in your lifetime, so it can make sense to step back and decide if you are, in fact, ready to take that step.

Issues to consider typically include:

•   what you have saved for a down payment
•   your monthly income
•   your monthly expenses
•   your credit score
•   the condition of the housing market
•   lifestyle considerations

In the rest of this post, we’ll delve into these factors more deeply, to shed light into how to know if you are ready to buy a house. We have also created a quiz and a first-time home buyers guide, so you can be informed and prepared! We encourage you to review the guide and take the quiz today.

Financial Factors

The first four bullet points focus on your personal financial situation, and each deserves a closer look before you move forward. As far as the down payment, ideally lenders like to see 20% down (although SoFi offers flexible down payment options as low as 10%), plus you’ll need to have enough money left over for closing costs, moving costs, and any renovation costs involved.

Lenders also want to see two years of steady income, because both job continuity and consistent income are important. Then, you’ll need to see if your monthly income is high enough to afford the mortgage payment you’d be taking on; in other words, you’ll need to calculate your debt-to-income ratio.

As just one example, let’s say that you make $6,000 a month, before taxes. You’re paying $1,500 a month in rent and, when you add in car payments, credit card debt, and student loan payments, that equals another $800.00. You’ve got monthly expenses, then, of $2,300; when you divide that by your monthly income ($2,300/$6,000), then your debt-to-income ratio is 38.3%, which is in the range of what many lenders like to see.

To find out more specifically what a lender requires for a down payment, debt-to-income ratio, credit score and more, it can make sense to get prequalified or even pre-approved for a certain mortgage amount before you go house shopping. That way, you’ll know what you can afford.

Housing Market Conditions

When you’re looking for a house, a key factor is its location. You’ll want your home to be in a desirable location, however you define “desirable.” It could mean being in the heart of a busy city—or in a peaceful place along a river. If you have or plan to have a family, quality schools are likely important, and so forth.

In desirable locations, competition is fierce today, with homes often selling quickly after being put up for sale. And, as demand has increased, available housing (especially for first-time home buyers looking to purchase in affordable price ranges) has therefore decreased. So, you’ll have to be prepared to compete in the current housing market conditions, which means having your financial situation in order so you can make a timely offer on a house of choice.

Earlier in this post, we focused on financial factors, and we’ll expand that concept to say that it’s important to make sure you have the financial resources you need for the home you want in the location you desire.

Check out local real estate
market trends to help with
your home-buying journey.


Lifestyle Considerations

Let’s say you’re confident that you have the financial resources to purchase a home in your neighborhood of choice. But, before you move forward, here are a couple of lifestyle issues to consider:

•   Are you ready to do your own home maintenance? If you’re used to renting, your landlord has played a key role in home repairs and so forth. If you buy a home, you would now be your own landlord.
•   Are you ready to settle down in a particular community for at least a few years? If not, you may not break even when you sell the house you bought, because it can take time to recoup closing costs and other costs you paid when purchasing the home.
•   Are you ready for the responsibility associated with a long-term loan? You’ll also need to pay for repairs, renovations, general upkeep, utilities, taxes, insurance, and more.

Ready to Buy? SoFi Mortgage Loans

If you ultimately decide it’s time to buy, then we’ve got plenty of resources to share, including a post that provides 12 tips for first-time homebuyers. Plus, you can get painlessly pre-qualified for a SoFi mortgage loan, with both fixed and adjustable rate programs available.

Ready to explore getting a mortgage? We invite you to discover what SoFi has to offer!


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

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Home Buying Mistakes to Avoid

Buying a home is a big deal, both emotionally and financially. For many people, homeownership is still an essential part of the American dream. And, of course, it’s the biggest investment some will ever make.

But many times real-life home buying isn’t the same as the 1-2-3, in-and-out, fun-and-done experiences portrayed on reality TV shows.

In the midst of the thrill of the search and daydreaming of the perfect home and how your family will fit into it, some things can go wrong.

You could improve your chances of getting it right by taking a proactive approach from the beginning of your search to the day you sign on the dotted line. When you’re ready to take the leap, here are five home-buying mistakes you might want to avoid:

Not Getting Your Finances in Order

Before you start browsing online listings or get your heart set on a certain neighborhood, it might be a good idea to contact a lender (or lenders) to prequalify for a loan. You’ll provide basic information about your debt, income, assets, etc., and they can give you an idea of how much you can borrow.

Mortgage prequalification isn’t a commitment for the lender or buyer—it’s just a first step. If you appear to meet a lender’s standards, you could move on the pre-approval stage submitting income and asset documentation for a more in-depth review of your finances.

Once the lender approves your official loan application, you’ll receive a conditional commitment for a designated loan amount—called a pre-approval letter —and have a better idea of what your loan terms will be. Mortgage pre-approval can help demonstrate to sellers that you’ve completed the first step in getting a mortgage because your credit, income and assets have already been reviewed by an underwriter, and that could give you an edge.

Not Being Realistic about What You Can Afford

The lender you choose will tell you the maximum amount you’re approved to borrow for a home, but you don’t have to use every penny of that money. It’s important to keep other factors in mind, including:

Will your new mortgage payment fit comfortably into your monthly budget? You may have to make some tradeoffs—less travel, shopping, or dining out—if your new payment is higher than your current rent or mortgage payment. Not sure if you’re ready?

If you have some idea of what your new payment will be, you might want to try living with it for a few months before actually committing to a loan. You could put the difference between old and new into a savings account to see if the new payment is within your budget and, as a bonus, save some money in the meantime.

Your mortgage might not be the only expense that goes up. If you’re buying a bigger place, you may have to pay more for utilities—especially if you’ve been a renter and some of those costs were included every month. If the home has a lawn or pool, you might have to maintain them or pay someone else to do it. Or you may have a homeowner association (HOA) fee.

You’ll also have to purchase homeowner’s insurance and pay property taxes . You can get some idea of what those costs will be by searching for homes online—but you might want to hit some open houses as well. It may help you set some priorities (are you willing to give up a bathroom to get a bigger kitchen?), and you could talk to the Realtor to get information about HOA fees and other expenses.

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Digging Too Deep for a down Payment

If you have to drain your emergency savings to manage the down payment on a home, you might want to dial down the amount or wait and save up a bit more. Consider what could happen if the home needs a costly repair or, worse, if you or someone in your family suddenly has an expensive medical bill. That’s what an emergency fund is for.

The same thing holds for taking money from your retirement savings. The IRS allows first-time homebuyers (IRS defined as not owning a primary residence in the past 2 years) to withdraw money from an IRA penalty-free , but you’ll still pay federal and state income taxes on the money—and lose out on the growth you’d possibly have if you left those funds alone.

If you have a 401(k), you could take a loan against those funds, but again, there are consequences . There may be a provision in your plan that prohibits you from making additional contributions until the loan balance is repaid, you’ll miss out on any growth, and you may be required to pay back the loan immediately if you quit or lose your job . If that happens, the money you borrowed will become fully taxable and may be subject to a 10% early withdrawal penalty .

There are benefits to putting 20% down on a home: You’ll avoid paying private mortgage insurance (PMI) and your monthly payments will be lower. But 20% isn’t required. For example, The minimum down payment required for a conventional loan is 3%, and for an FHA loan, it’s 3.5%. According to the National Association of Realtors’ Profile of Homebuyers and Sellers , overall, buyers made a median 13% down payment in 2018, and first-time buyers put a median 7% down.

With all the other costs you could be looking at as you move into a home—closing costs, utility deposits, moving expenses, decorating, and more—your down payment amount is something to consider if you want to avoid getting in over your head.

Passing on a Full Inspection

It may be tempting to waive the home inspection when you’re trying to buy the home of your dreams—whether it’s to save on this extra expense or to make your offer more appealing to the sellers.

A quality home inspection might reveal critical information about the condition of a home and its systems—from electrical problems to hidden mold to a leaky roof. And your inspection report might serve as a useful negotiating tool: You could use it to ask for repairs or to work out a better price from the seller. And if you aren’t happy with the inspection results, you may be able to use it to cancel the offer to buy.

Letting Your Emotions Get The Better of You

Home buying can be a roller coaster, so it’s important to prepare yourself psychologically as well as financially. If you’ve ever talked to someone buying a house, you know there are potential pitfalls all through the purchasing process.

You might fall in love with the perfect house and find it’s way over your budget. You might get annoyed with the sellers or their realtor, especially during the negotiation process. You might disagree with your spouse or a co-buyer about priorities.

Loan Satisfaction is Important

When you’re ready to line up your financing, the loan terms you get could be nearly as significant as your home’s location as far as long-term satisfaction.

You might want to look at more than just your monthly payment and consider the interest rate, the length of the loan, and other factors that make one lender a better fit than another.

With a SoFimortgage loan, for example, the prequalification process is quick and easy—it takes just minutes and it costs nothing. And with SoFi, you can put as little as 10% down on a home, with no hidden fees.

Buying a home, whether it’s your first or your fifth, is seldom accomplished without a few stressful days and sleepless nights . But you might be able to make things easier if you do your research, work with professionals, and make sure your financial plan is in place before you throw yourself into a serious search.

If you’re thinking about buying a home, take a look at what a SoFi mortgage could do for you.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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

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Preparing for the Cost of a New Roof

Snow, wind, sleet, rain, and more—a sturdy roof will help protect you from it all. But eventually, roofs wear out and need to be replaced or fixed. You may notice a small (or big) leak. It could be 15, 20, or even 25 years, but at some point, your roof will likely need to be repaired or replaced.

It doesn’t matter if the reason is a particularly nerve-racking storm, or deferred maintenance (as in “you-know-I-should-really-get-that-roof-fixed-soon”). It may even have a little something to do with how lucky you are.

Maybe it’s not leaking at the moment, and you just feel it’s time for a newer roof. Either way, if you are considering your roof replacement cost or paying for roof repairs, there are a number of things to keep in mind.

How Much Does a New Roof Cost?

When looking at new roof installation costs, there are a number of factors that will impact the overall price—including with what part of the country you live in and what time of year. Deciding to have the work done in the off-season could potentially save you extra money . If possible, try to avoid having repairs done in the late summer and fall, when roofers are typically at their busiest.

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

Finally, the complexity of the roof design can drive the price higher as well. Does it have gables? Is it a mansard roof? Is it especially steep? The more complex your roof design is, the more labor and materials will be required.

The average cost to replace a roof is approximately from $4,900 to $14,100 , but can vary a great deal depending on where you live. It will also depend on the roofer you choose, the type of roof you have, and the type and quality of the materials. When creating an estimate , roofers sometimes define costs per roofing square.

One roofing square is equal to a 10-by-10-foot (100 square feet) area. So a 1,700-square-foot roof would be 17 squares. A 1,700-square-foot residential roof using standard asphalt shingles typically ranges from $6,000 to $8,500 including tear off of the old roof.

This is why it is doubly important to get several estimates from reputable contractors. When doing so, be sure to pay close attention to the quality of the materials specified in the estimate. It’s even better if you can get a recommendation from someone you know.

And while the price is important, it also matters how professional the work is. Will they complete the project in a timeframe they have proposed and will they take care with cleaning up? And most important, is the quality of the work up to standard? This is a big investment and you want to get it right.

Getting a New Roof

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

While replacing a roof is an expensive home improvement project, keeping your roof up to par could end up paying off. Not doing so could result in leaks that can drip down the inside of the walls. If the leaks continue, you could eventually be required to cut out drywall or even replace flooring. These repairs could end up costing you thousands extra in repairs.

Another reason for a roof replacement? Bringing the house up to date. Maybe you’re renovating the home for your own benefit, or are hoping to improve the value of your home for future sale. If you’re replacing your roof as a part of renovations, you’ll also likely have time to save money for the project and work within your budget. And if you plan on selling your house after the roof replacement, having a new roof can be a major selling point.

Paying for Roof Repairs

If your roof is damaged, then you are faced with an entirely different challenge other than figuring the roof replacement cost. It could be from a particularly nasty storm causing damage from water, high winds, or hail. Maybe it was a fallen tree.

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

Your homeowners’ policy or home warranty may include coverage that could possibly help defray some of the costs, depending on the cause of the damage and the age of the roof. If it’s determined that the damage is from normal wear and tear, then it will likely be considered regular maintenance and may not be covered.

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

And importantly, you’ll want to find a licensed roofing contractor who you can rely on. Multiple estimates can help you make an informed decision and ensure that you’re getting the most value for your investment.

Ways to Help Pay for Home Repairs

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

A personal loan allows you to borrow the money you need quickly, with little hassle and minimal fees. With a personal loan, you’ll usually get a lower interest rate than credit cards and the loan is unsecured in most cases, so there is no additional lien against your property.

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

On the other hand, the application process for a personal loan is usually fairly straightforward. Lenders will review your financial situation, including your credit score and earning power, to determine how much they are willing to loan you and at what interest rate. Some personal loans, including SoFi loans, boast no origination fees.

When you take out a personal loan with SoFi you’ll fill out an easy online application that takes just minutes. You can get an idea on approximate costs for updating your roof using SoFi’s Home Improvement Cost Calculator.

Consider a SoFi home improvement loan to take care of your roofing replacement or repair needs! Check your rate today!


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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