Can You Make Mortgage Payments With a Credit Card?

Can You Make Mortgage Payments With a Credit Card?

Whether you want to rack up points on a rewards credit card or give yourself some breathing room during financial hardship, you can pay your mortgage with a credit card. You’ll have to find a workaround to do so though, because mortgage companies won’t let you make payments directly with them using a credit card. Plus, it’s important to understand other factors involved when paying your mortgage with a credit card, such as possible fees and other financial consequences.

Read on to learn how to pay your mortgage with a credit card and what to consider before you do.

How to Pay Your Mortgage With a Credit Card

There are several ways you can pay your mortgage with a credit card, including using a money order, utilizing third-party services, and getting a cash advance.

Use a Third-Party Service

Some third-party services facilitate mortgage payments using your credit card and send a payment to your lender on your behalf. Companies like Plastiq allow you to use Mastercard and Discover/Diners Club/JCB credit cards to make mortgage payments through their platform. Many third-party services don’t allow mortgage payments using popular issuers like Visa and American Express.

For the privilege, you’ll most likely need to pay a convenience fee — Plastiq charges 2.85% — each time you make a mortgage payment using your credit card. You may also have the option to make recurring payments or to make your payments manually.

Buy a Money Order

Depending on your location and the retailer, you may be able to purchase a money order with your credit card. Then, you’ll simply take the money order and deposit it at your bank and transfer the amount to your mortgage lender.

Keep in mind that many retailers may not accept credit cards as a form of payment for money orders — it’s best to check ahead of time if you plan to do so. Even if you can, money orders tend to have a limit of $1,000. That means if you want to go this route, it may take you a few tries before you have enough for your mortgage payment.

Additionally, you may incur a fee for each money order you buy. Also keep in mind that some credit card issuers treat money order purchases as cash advances, which can result in a fee and interest charges at a rate that’s usually higher than the purchase APR on a credit card.

Transfer a Balance to Your Bank Account

You could attempt to conduct a balance transfer, with the funds going into your bank account — some credit card issuers may allow this type of transaction. Most commonly, credit card issuers provide cardholders with balance transfer checks to facilitate these types of transactions. There may be balance transfer fees involved, and interest may accrue depending on your credit card terms.

Get a Cash Advance

As another method to pay your mortgage with a credit card, you can get a cash advance at the ATM with your credit card. You’d then deposit the cash into your bank account and use the funds to make your mortgage payments. You could also consider using the funds to purchase a cashier’s check and mail it to your lender.

Going this route most likely means you’ll have to pay a cash advance fee, and interest on cash advances will accrue on your credit card with no grace period. Credit limits may be lower for cash advances as well.

Recommended: Charge Card Advantages and Disadvantages

Do All Mortgage Lenders Accept Credit Card Payments?

No, most mortgage lenders don’t accept credit card payments directly from the borrower.

For one, paying debt with a credit card isn’t a financially responsible move — mortgage companies likely don’t want the added risk that could come with that. In fact, some credit card issuers like Visa specifically prohibit credit card payments for debt repayment.

Factors to Consider When Paying a Mortgage With a Credit Card

Before paying your mortgage with a credit card, consider the following.

Fees vs Rewards

Similarly to those considering paying taxes with a credit card, many people tend to pay their mortgage with a credit card because they want to earn rewards. Since third-party services will charge you fees — or you’ll pay the fees charged directly by your credit card issuer for balance transfers — you’ll want to make sure the value of the rewards outweighs what you’re paying in fees.

Sure, the fees may seem small, but they can quickly add up over time. Also, in many cases, rewards cards may only count certain transactions as eligible for rewards. Many issuers don’t consider balance transfers as qualifying transactions.

The Cost of Interest

If you don’t pay off your balance each month, interest will start to accrue on your credit card — and credit card interest rates are typically much higher than your mortgage interest rate even if you have a good APR for a credit card.

Additionally, if you go the cash advance route, these transactions may have higher credit card interest rates, and there’s no interest-free grace period.

Effect on Your Credit Score

If your credit card balance starts to get too overwhelming and you miss making the credit card minimum payment, it could negatively impact your score.

Even if you make on-time payments, having a high balance could affect your credit utilization, which is the ratio between your balance and your available credit. The higher your credit utilization, the more it could negatively impact your score.

Challenges You May Face When Paying a Mortgage With a Credit Card

One challenge with using a credit card for mortgage payments is the time it takes to do so. Any of the above mentioned methods will take you some time and effort to complete successfully.

There are also the fees to consider — determining whether paying the extra charges is worth it takes some careful calculations.

Should You Pay Your Mortgage With a Credit Card?

Making mortgage payments with a credit card may be a good idea if you’re looking for a way to earn more rewards or get some financial breathing room. However, given the downsides, such as high fees and the impact it may have on your credit, you may be better off pursuing other options first.

Alternatives to Using a Credit Card for Your Mortgage

Here are several options you can choose from instead of paying your mortgage with a credit card:

•   Consider mortgage forbearance: If you’re struggling with your payments and experiencing a significant hardship, you can contact your lender to see if you’re able to temporarily stop paying or have your monthly payments reduced until you can get back on your feet.

•   Seek help with a housing counselor: You can find a reputable housing counselor that’s approved by the U.S. Department of Housing and Urban Development (HUD) by contacting the Homeowners HOPE Hotline or using the housing counselor tool on the Consumer Financial Protection Bureau’s website. They could suggest options to help you manage your mortgage payments. You may have to pay a small fee for the service, but it could be more affordable than using a credit card to pay your mortgage.

The Takeaway

Paying for your mortgage with a credit card may be possible as long as you understand what you’re getting into and are strategic about how to do so. Before you move forward with paying your mortgage with your credit card, make sure you weigh the fees involved vs. the rewards you could earn as well as any interest you could accrue and potential impacts to your credit.

If you’re looking to apply for a credit card that could help you earn rewards, you might apply for the SoFi Credit Card.

The SoFi Credit Card offers unlimited 2% cash back on all eligible purchases. There are no spending categories or reward caps to worry about.1

Take advantage of this offer by applying for a SoFi credit card today.


Can you use a credit card to pay a mortgage?

You can’t pay your mortgage directly using a credit card, but you can do so through indirect methods. Some of these include going through a third-party service, making a balance transfer, purchasing a money order using your credit card, or getting a cash advance. Each of these methods will come with its own set of fees.

Can paying a mortgage with a credit card impact credit score?

If you end up with a high balance on your credit card as a result of your mortgage payment, it could negatively impact your score if you have a high credit utilization. Or, if you end up missing or being late on a payment (perhaps you’re struggling to make the monthly payments), then your score could also be impacted.

Are there fees for paying a mortgage with a credit card?

There are fees depending on how you use your credit card to pay for your mortgage. For instance, you may incur balance transfer, cash advance, or third-party fees.

1See Rewards Details at

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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 .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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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Paying Off a Mortgage in 5 Years: What You Need to Know

Paying Off a Mortgage in 5 Years: What You Need to Know

Paying off your mortgage ahead of time might sound like an incredibly savvy thing to do — and in some cases, it is. But it’s not the right money move for everyone.

Pay off a mortgage in five years? It’s an aggressive strategy that may or may not be the smartest choice.

Benefits and Risks of Paying Off a Mortgage Early

Achieving homeownership is, well, an achievement. And since you’re here reading an article about paying a mortgage off early, you’re clearly an overachiever.

Paying off any kind of debt early usually seems advisable. But for most of us, our home is the single largest purchase we’ll ever make — and paying off a six-figure loan in only a few years could wreak havoc on the rest of your finances.

In addition, some mortgages come with a prepayment penalty, which means you could be on the line for additional fees that might eclipse whatever you’d stand to save in interest payments over time. (Mortgages tend to have lower interest rates than many other common types of debt anyway.)

That said, if you have the cash, paying off your home early can lead to substantial savings, not to mention helping you build home equity as quickly as possible.

Let’s take a closer look at the risks and benefits of paying off a mortgage early.

Benefits of Paying Off a Mortgage Early

The main benefit of paying off a mortgage early is getting out of debt. Even minimal interest is an expense it can be nice to avoid.

Additionally, paying off your home early means you’ll have 100% equity in your home, meaning you own its whole value, which can be a major boon to your net worth.

Risks of Paying Off a Mortgage Early

Paying off a mortgage early may come with risks, and not just prepayment penalties (which we’ll touch on again in a moment). In many instances, it can be a plain old bad financial move.

Depending on what your cash flow situation looks like, and what the interest rate on your mortgage is, you might stand to out-earn early payoff savings if you funneled the extra cash to your investment or retirement accounts instead. (You can use this handy dandy mortgage calculator to see how much interest you stand to spend over the lifetime of your home loan — and then compare that to how much you might earn if you invested that money instead.)

Additionally, if you have other forms of high-interest debt, like revolving credit card balances, it’s almost always a better idea to focus your financial efforts on those pay-down projects instead.

To recap:

Benefits of Paying Off a Mortgage Early

Risks of Paying Off a Mortgage Early

Saving money on interest over time Possible repayment penalty
Building home equity quickly Lost opportunity for investment growth, which could outweigh interest savings
No longer having to make a mortgage payment every month Less money for other important goals, such as paying down credit card debt

Watching Out for Prepayment Fees

One of the biggest risks of paying off a mortgage before its full term is up is the potential to run into prepayment penalties. Some mortgage lenders charge large fees to make up for the interest they’ll be missing out on.

Fortunately, avoiding prepayment penalties on home loans written after 2014 is easier: Legislation was passed to restrict lenders’ ability to charge those fees. But if your mortgage was written in 2013 or earlier — and even if not — it’s a good idea to read the fine print before you hit “submit” on your lump-sum payment, and ideally before you accept the contract at all.

Steps to Paying Off a Mortgage Early

You’ve assessed the risks and benefits and decided that paying off the mortgage early is the right move for you. Nice!

Now let’s take a look at how to get it done.

Pregame: Considering Repayment Goals When House Shopping

This option won’t work if you’ve already found and moved into a home, but if you’re still in the home-shopping portion of the journey, looking at inexpensive homes can be a great first step toward paying off your mortgage fast.

After all, if the home has a lower price tag, it’ll be easier to reach that goal in a shorter amount of time. Ideally, you want its value to appreciate, so you’ll still want to shop around before just choosing the lowest-priced house on the block.

Maybe you signed your home contract years ago and are just now considering getting serious about early mortgage repayment. Take heart! There are some easy steps to follow to vanish your mortgage in five years or so.

1. Setting a Target Date

The first step: figuring out exactly when you want the mortgage paid off. Choosing your target date will make it easier to figure out how much additional money you need to send to your lender each month.

Five years is a pretty tight timeline for this kind of debt repayment process, but it could be doable depending on your earnings and commitment.

2. Making a Higher Down Payment

The higher your down payment, the less loan balance you have to pay down, so if you can manage it, offer as much as you can right at the start. There are many assistance programs for down payments that might boost your offer and put you on track for paying down your mortgage early.

Also, realize that first-time homebuyers — who can be anyone who has not owned a principal residence in the past three years, and some others — often have access to down payment assistance.

3. Choosing a Shorter Home Loan Term

Obviously, if you want to pay your mortgage off in a shorter amount of time, you can consider choosing a shorter home loan term; most conventional mortgages are paid off over 30 years, though it’s possible to find loans with 15- or even 10-year terms.

However, your interest rate might be higher on those loans in order to make the deal worthwhile to the lender, so for many borrowers, choosing a longer home loan term and making aggressive additional payments is a better option.

4. Making Larger or More Frequent Payments

One of the most achievable ways for most borrowers to pay off a home loan early is to pay more than the monthly minimum, either by adding extra toward the principal in the monthly payment or by paying more than once per month.

Unless you’re due for a six-figure windfall, chipping away at the debt this way might be the smartest option.

But how does one come up with the additional money to funnel toward that goal?

5. Spending Less on Other Things

As with most debt repayment strategies, chances are you’ll need to find other budgetary items to cut back on in order to set aside more money to put toward the mortgage. This could be as small as ditching the daily latte or as serious as choosing to give up a car.

6. Increasing Income

Another option, if there’s just nothing left to cut? Finding ways to increase your income, perhaps by starting a side hustle or asking for that long-overdue raise.

The Takeaway

Pay off a mortgage in five years? While paying off your home loan early could help you save money on interest, sometimes the money is better spent on other financial goals and projects.

Whether a cash-out refinance sounds appealing or you’ll soon be on the hunt for a new mortgage, see what SoFi offers. SoFi’s fixed-rate loans can be used for refinancing or a new purchase.

What about the home loan rates you can find with SoFi? They’re competitive, and locking in soon could be beneficial.

Finding your rate takes just minutes, and there is no obligation.

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 Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See 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.

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What Homebuyers Should Know About Housing Discrimination

Housing Discrimination Facts for First-Time Homebuyers

Despite decades of anti-discrimination legislation and other efforts to fight redlining, create fair lending, and ban racial and other bias, housing discrimination can still exist in many markets throughout the country, especially for first-time homebuyers.

It can be subtle or overt. Either way, housing discrimination holds people of color, immigrants, families with children, and LGBTQ people back by denying them access to safe neighborhoods, good schools, and the generational wealth that comes with homeownership.

This guide offers more information on housing discrimination and what to do if it happens to you.

What Is Housing Discrimination?

Federal housing discrimination is defined as discrimination concerned with renting or buying a property based on race, color, religion, national origin, sex (including gender, gender identity, and sexual orientation), familial status, or disability.

In other words, if anyone in the housing process treats a person buying, renting, or selling housing differently because of any of these reasons, they are breaking the law.

Whether first-time homebuyers are buying a starter home or upsizing, they may want to fine-tune their anti-bias antennas and know the laws.

Housing Discrimination Examples

Housing discrimination comes in many forms. It could be a landlord who charges higher fees to renters with children, a real estate agent who refuses to show immigrants homes in certain neighborhoods, or a buyer offering less because of the seller’s race.

What’s more, housing discrimination can be subtle, according to the U.S. Department of Housing and Urban Development (HUD), making it difficult to prove and punish. Here are examples of subtle housing discrimination described on HUD’s website:

An African American man speaks on the phone to a landlord who seems eager to rent to him. But when the man meets with the landlord to fill out the application, the landlord’s attitude is different. A few days later, the potential renter receives a letter saying his application was denied because of a bad reference from his current landlord. But his current landlord says he was never contacted.

An Asian man meets with a real estate broker because he is interested in purchasing a house for his family in a specific neighborhood. When he mentions the neighborhood, the broker tells the Asian man that she has wonderful listings in a neighborhood where there are more people like him. When he looks at houses in the neighborhood she recommends, he notices that the majority of residents are Asian. The man files a complaint. Steering buyers to certain neighborhoods because of race is illegal.

Sexual harassment, failure to comply with accessibility requirements, and rules against renting or selling to families with children are also discriminatory.

Equal Opportunity Housing Laws to Know

Housing discrimination by sellers, lenders, and landlords based on race, color, religion, or nationality has been illegal since Congress passed the Fair Housing Act in 1968.

The act was expanded in 1974 to include gender and in 1988 to include families with children and people with disabilities. Additional laws concerning discrimination in mortgage lending are included in the Equal Credit Opportunity Act, passed in 1974.

Some situations are exempt from the Fair Housing Act. These include some types of senior housing and housing operated by religious organizations and private clubs. Single-family rental homes are also exempt as long as the landlord does not own more than three homes and does not advertise or broker the rentals. Owner-occupied properties with four or fewer rental units are not governed by the Fair Housing Act.

States and local jurisdictions may have additional laws regarding housing discrimination. For instance, many states and cities ban discrimination based on age, criminal history, immigration status, marital status, or sexual orientation.

In 2020 the Trump administration made several changes to HUD regulations, making it more complicated for people to prove they are victims of housing discrimination. Specifically, victims had to go to great lengths to show that the discrimination was intentional. In early 2021, President Joe Biden signed executive orders aimed at reversing those changes.

What to Do About Potential Discrimination

First, become familiar with the federal, state, and local laws that may apply. Knowing the laws and how they work is vital to filing an effective complaint and getting a successful outcome.

If you think you are a victim of housing or mortgage lending discrimination, you can file a federal complaint with the HUD Office of Fair Housing Equal Opportunity (FHEO). This office investigates claims concerning any of the protected classes specified in the Fair Housing Act. You can file a complaint online or mail the complaint form to your regional HUD office or call the Housing Discrimination Hotline at 800-669-9777. The complaint form is available in nine languages, including English and Spanish, and any retaliation for filing a complaint is illegal.

The FHEO is supposed to investigate complaints within 100 days. Sometimes complaints prompt the U.S. Department of Justice to file lawsuits against people or companies that may have violated the law.

You may also want to file a complaint with your state attorney general’s civil rights bureau or your city’s civil rights or fair housing commission. This may be more effective than filing solely with the FHEO, especially in areas with extensive housing discrimination regulations. To find out where to file a complaint in your area, start with the National Fair Housing Alliance website for a list of local agencies.

In addition to the FHEO, mortgage lending discrimination complaints can be filed with the Consumer Financial Protection Bureau.

How to Make Your Case Proving Housing Discrimination

Extensive documentation can help prove housing discrimination. When you are talking to brokers, sellers, landlords, or lenders, it’s a good idea to listen carefully and take notes during each conversation. HUD officials suggest looking for what they call red-flag language. This may occur when a real estate agent is trying to steer you away from or into a particular neighborhood. Phrases such as “This wouldn’t be a good fit for you” or “You’d be happier in this other neighborhood” can be red flags.

If you feel you are being “steered,” you can do an online search to learn if a broker failed to show all of the houses in the local housing market in your price range.

If you suspect lending discrimination, such as being quoted a higher rate than you expected, you can check the posted rates online at that mortgage lender and others to see how they compare. You can take screenshots or print this information.

Keep an eye out for and document surprising obstacles that come up in the home buying or renting process. Perhaps your landlord, seller, or agent has said you are qualified, but then you are unexpectedly denied, only to determine that the house or apartment is still on the market weeks later. If you haven’t been given a specific financial reason why your application or offer didn’t fly, this may be a sign of discrimination. You’ll want to document the situation with dated notes from your conversations and screenshots or copies of the ads showing the property still available after you were turned down.

Local housing advocacy and human rights groups also offer help. Organizations such as the Fair Housing Justice Center may help you conduct tests using volunteers of different races to test for disparate treatment in specific locations. These tests can also provide compelling evidence for your case.

Recommended: Home Affordability Calculator

The Takeaway

Longstanding laws and regulations are not enough to eradicate housing discrimination, but informed buyers and renters can fight back.

Expect a level playing field at SoFi, which offers fixed-rate mortgages at competitive rates. You can apply for a mortgage online and be guided through every step.

And qualified first-time homebuyers can put just 3% down.

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 Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See 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.

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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A Guide to What Mortgage Notes Are & What They Do

A Guide to What Mortgage Notes Are & What They Do

When you close on a home, one of the most important documents you’ll review and sign is your mortgage note. It’s an agreement between you and the lender that outlines the terms and conditions of the mortgage.

The document tells you how much and when to pay, and spells out the consequences if you don’t.

What Is a Mortgage Note?

A mortgage note, often referred to as a promissory note, is what you sign when you agree to take on the responsibility of a mortgage. The note outlines:

•   Your interest rate

•   The amount you owe

•   When the payments are due

•   The amount of time it will take to repay the loan

•   How homebuyers can remit payment

•   Consequences buyers face if they do not pay

It’s one of the key documents you’ll sign at closing.

Promissory notes also may be used in owner-financed home sales. The buyer and seller sign the document, which contains the loan terms. When a borrower pays the seller directly, the promissory note gives the lender the ability to enforce their rights through a lien, foreclosure, or eviction.

What Is Included in a Mortgage Note?

The mortgage note outlines the conditions and responsibilities of the buyer. You’ll see sections like these in a mortgage note.

•   Borrower’s promise to pay. This section includes the total amount of money you’re borrowing and the name of the lender to whom you will remit payment.

•   Interest. The interest rate charged on the unpaid principal is listed here.

•   Payments. Borrowers agree to pay a monthly amount before or on a specific date. The place where borrowers can remit payment is also listed.

•   Borrower’s right to prepay. This section specifies a borrower’s ability to pay toward the mortgage principal without penalty.

•   Loan charges. All charges by the lender must be legal. Any amounts over the legal limit will be refunded to the buyer or applied to the principal.

•   Borrower’s failure to pay as required. Default is clearly defined for the buyer, as are late charges and what happens in the event of default.

•   Giving of notices. Borrower and lender will have the details of how to contact each other for legal purposes.

•   Obligations of persons under this note. All people listed on the mortgage note are equally responsible for repayment of the loan.

•   Uniform secured note. Buyers are advised that a security instrument is signed in addition to the note that protects the note holder from potential losses by giving them the ability to foreclose in case of default.

How Does a Mortgage Note Work?

A mortgage or promissory note is drawn up by the lender when preparing your mortgage for closing during the underwriting process. This document is what makes the terms and conditions of the mortgage legally binding.

Borrowers will see the mortgage note at closing, though the terms and conditions will be outlined in a closing disclosure provided at least three business days before the closing date. The closing disclosure document can be compared with the loan estimate that was provided at the beginning of the mortgage application process.

A mortgage note is accompanied by another document, called the mortgage, security instrument, or deed of trust. It restates the terms of the mortgage note and outlines the rights and responsibilities you have as a borrower. As a security instrument, the document specifically gives the lender the right to foreclose on your property if you fail to make payments. Having this right reduces the risk to the lender, which can offer more competitive terms to the borrower in return.

Who Holds the Mortgage Note?

A mortgage note isn’t usually held by the lending institution that originated your loan. Mortgage notes are often sold, and it’s not easy to tell who holds your mortgage note. This is because the loan servicer is usually different from the note holder.

Selling a Mortgage Note

You’ll see in your closing documents a provision that allows the lender to sell the mortgage note. This is common and legal in home contracts and typically occurs soon after the property closes. Lenders sell mortgages on the secondary mortgage market, usually to one of the large federally backed mortgage companies, Fannie Mae or Freddie Mac. When the mortgages are sold, the lender doesn’t have to keep the mortgage on their balance sheet, which, in turn, allows them to originate more mortgages for other borrowers.

Fannie Mae and Freddie Mac then bundle mortgages into what is called a mortgage-backed security. Investors around the world (think pension funds, mutual funds, insurance companies, and banks) can buy shares of mortgage-backed securities. The investors will receive steady returns as the mortgages are repaid by individual borrowers.

The lender does continue to service your loan, meaning you’ll send your payment to them. The lender will keep a small portion of your mortgage to cover their costs for servicing your loan while sending the rest to the buyer of your note.

When your mortgage note is sold, the terms of your mortgage won’t change. Your payment, interest rate, and due date will remain the same. However, If your mortgage note is sold to another servicer, you’ll be notified of the new servicer and the new way to remit your mortgage payment.

Different Kinds of Mortgage Notes

There are different types of mortgage loans and different kinds of mortgage notes to accompany them.

Secured Loans

With a secured mortgage note, the mortgage uses collateral to secure the property. The collateral is usually the property itself. A secured loan is usually accompanied by better terms, such as a lower interest rate and a longer repayment period.

Private Loans

Private mortgage notes are secured by private lenders. A seller may own the property outright and act as a private lender, setting their own terms for mortgage loans.

Institutional Loans

Institutional notes are mortgage notes issued by traditional lenders, such as financial institutions or banks. They’re highly regulated. Buyers must meet specific criteria, and the loans must have standard interest rates and repayment terms.

The Takeaway

Understanding your mortgage note and how it works is a critical step in buying and financing a home. It may be helpful to review the mortgage note with a professional, as the note can protect the buyer just as much as the seller.

The journey to the closing table can be vexing, so it can be helpful to have your questions regarding mortgages answered by a knowledgeable loan officer.

And this help center for mortgages might come in handy.

When you’re ready for a home of your own, consider SoFi home loans and check out SoFi mortgage rates.

It’s quick and easy to find your rate.

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 Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See 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.

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How to Find a Contractor for Home Renovations & Remodeling

How to Find a Contractor for Home Renovations & Remodeling

You’re ready to make home improvements. When looking for a trustworthy pro, it’s a good idea to get referrals, check references, get bids, and nail down your financing.

Let’s drill down to the details on how to find a good contractor for remodeling and what you need to ask as you move through the process.

Ask for Referrals

Often the easiest way to find a reputable contractor for your project is through word-of-mouth referrals, whether from a friend, neighbor, family member, or colleague.

Maybe you’ve watched your friend remodel the kitchen on social media; you may want to ask for the name of the contractor behind the job. Likewise, if you see a big construction project going up in your neighborhood, you can ask the homeowner for insight on the contractor behind it.

You might also want to ask owners of local lumber yards, where con­tractors do their bulk business, who’s reliable.

Search Online for the Top-Reviewed Contractors

Before hiring a contractor to renovate or remodel your home, it’s smart to do your due diligence and collect as many references as possible. But if you’re new to a town or neighborhood, for example, you may wonder how to find a contractor who works in your area.

This is where online reviews come in handy. There are many websites out there, including search engines like Google, that offer lists of licensed contractors with accompanying reviews.

Look at Credentials and Portfolio

As you begin speaking with each potential contractor, ask to see a copy of their contractor’s license and insurance policy, and ask about any specialty certifications or membership to any professional organizations like the National Association of Home Builders, the National Association of the Remodeling Industry, or the National Kitchen & Bath Association.

Be aware that some states require contractor licensing; others, certification or registration. Registration doesn’t guarantee expertise; it’s merely a written record of who is performing the work. Many but not all states have websites where you can verify your pro’s license number.

Most reputable builders or contractors should have a website or basic social media presence, but if you can’t find one, request an email link to the contractor’s portfolio to see examples of past projects, from countertop replacement to closet remodels, as well as before and after photos.

Interview Candidates

Once you have a list of potential contractors narrowed down to your three top picks, it’s a good move to interview each of them before you go a step further. Maybe you won’t jibe with one of them, or perhaps another won’t seem as knowledgeable about certain components of construction or remodeling as you’d like for your particular project.

Treat hiring any contractor or handyman just like you would hiring an employee for your work, and if you don’t get a good feeling about the candidate, trust your gut. Communication is key for any successful project, and if the communication feels lacking in the interview process, it’s likely you’ll get frustrated down the line when all the moving parts of a remodeling project are also thrown into the mix.

Check References

After you’ve compiled a list of contractors and interviewed your top candidates, you’ll want to check references. Professionals should be able to provide a list of contacts from past jobs, and if they can’t do so right on the spot, that’s probably a red flag.

When checking references, you might want to ask past customers if the contractor completed the job on time and within budget, if there were any problematic interactions, and how the work has held up since.

Review Cost Estimate

You could find the perfect contractor for the job, only to learn that the pro is far out of your budget.

It’s smart to get at least three competitive quotes from contractors before you move forward. A cost estimate should include labor, materials, change-order language, and a timeline, at minimum. Many contractors also have creative deposit schedules so that funding is streamlined.

One positive if you have second thoughts about the expense: While the cost to remodel a house may not be cheap, if you keep your property modern and up to date, it’s possible you’ll recoup those dollars in resale value down the line.

Consider the Red Flags

If it’s your first time hiring a contractor, you may not know what to look for — or what’s a red flag. To save yourself headaches down the road, if the contractor checks any of the below boxes, the person’s professionalism might be in question and it’s probably wise to move on to the next candidate.

•   No “before” remodeling pictures

•   No website, social media presence, or reviews

•   No license or certification

•   No references

•   Slow communication

The Takeaway

How to find a contractor for home renovations? Hiring a contractor is a process that you’d be smart to treat like a job interview. It’s a good idea to check references and credentials, get bids, look for red flags, and have financing lined up.

3 Home Loan Tips

  1. Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, allow mortgages with as little as 3% down for qualifying first-time homebuyers.
  2. If you don’t have the cash to renovate or remodel your home, one financing option is a personal or home improvement loan, which can be faster and easier to secure than a construction loan.
  3. Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.


Before you sign on the dotted line for your remodeling job, there are some things about working with a contractor you need to know before locking one in.

What should a remodel contract include?

There should be a contract in place before any remodeling job begins. You’ll want to make sure the contract lays out the overall project budget and scope of work, when payments are due, and how to handle the inevitable changes that will arise.

You’ll also want to have a dispute resolution and waiver of the lien clause so that a subcontractor cannot put a lien on your home, and a warranty for the work that is an acceptable time frame for the amount you’ve invested.

What questions should I ask a contractor?

When you’re meeting with each potential contractor, ask about past projects and if they have specific experience doing the type of renovation work that you’d like done. It’s also helpful to ask how they would approach the project and how much of an impact it’ll have on your ability to live in the home while work is taking place.

You’ll also want to inquire about insurance. Does the contractor carry an insurance policy that protects you, the homeowner, as well? All of these are things a professional contractor should have and easily be able to produce.

What should you know before hiring a contractor?

Homebuilding is a booming industry right now. Many contractors are doing good work, but there are always bad actors that can take advantage of the huge influxes of money that Americans are pouring into their real estate investments — and their eagerness to get someone to do the work amid shortages.

It’s smart to do your research, to be patient on timing, and to stay flexible as the project — and its costs — evolve.

Photo credit: iStock/BOX39studio

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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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