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It can feel as if paying rent every month is akin to throwing money away. You don’t grow equity in a home, nor do you have a place to call your own or customize as you see fit (farmhouse kitchen sink, anyone?).

Perhaps you’re wondering if the time is right to buy a home or at least start saving for one. Maybe you’ve caught DIY fever and have ideas about what your dream home would look like and have been watching videos of how to redo a backsplash and plant some annuals. Or maybe you are planning on enlarging your family and think it’s time to become a homeowner, since a yard and playroom sure would be nice.

But there are other considerations, especially financial ones, to contemplate as well. The housing market has been hot, and pulling together a down payment plus affording a home loan may stretch your budget. Maybe renting is your best bet after all.

“Am I financially ready to buy?” is certainly one question you will likely want to answer. But it’s not the only issue. Here, learn the four signs that you may be ready to join the ranks of first-time homebuyers.

Renting a Home vs. Owning a Home: Pros and Cons

One important way to know if you are ready to be a first-time homebuyer is to consider the pros and cons of owning vs. renting.

First, take a closer look at the benefits of owning:

•  You know what your housing payments will be in terms of your mortgage amount, especially if you opt for a fixed-rate mortgage.

•  Month by month, you will build equity in your home.

•  As your equity grows, you may be able to borrow against it for other financial goals.

•  Owning a home can be a step toward building your net worth.

•  You may qualify for tax deductions.

•  On-time payments can help build your credit history.

•  You can customize your home to reflect your particular needs and tastes.

Now, here are the cons of owning a home:

•  You often need to come up with a down payment, which can be hard to save for. There are also closing costs to be paid.

•  You need to qualify for a mortgage.

•  You also need to budget for property taxes and related expenses such as insurance.

•  It will be your responsibility to pay for home repairs and upgrades, which may make having a healthy emergency fund more important. If, say, the furnace conks out, there’s no landlord to call for help.

•  Your mortgage, as well as taxes and other expenses, could add up to more than rent.

•  You are making a long-term commitment to owning a home. While, of course, you can always sell a property, it’s in your best interest to stay put and recoup closing costs and other expenses vs. picking up and moving frequently.

Next, think over the pros of renting:

•  It could be cheaper than owning. Your rent could be less than the mortgage, and you won’t have property taxes to pay.

•  Repairs and maintenance will likely be your landlord’s responsibility.

•  You’ll have the flexibility to move more easily when you want to.

•  You don’t need to come up with a down payment or qualify for a mortgage loan.

Last of all, take a look at the cons of renting:

•  You won’t be building equity in a property as you make your monthly rental payment.

•  Your net worth will not grow with rising property values.

•  You won’t have the security of ownership and its costs. Your landlord could raise your rent or decide not to rent the property any longer.

•  Your payments typically don’t build your credit history.

•  While you can likely decorate as you please, you won’t be able to upgrade or renovate as you might with a home you own. For instance, even if your landlord did allow you to get a new smart fridge, you probably couldn’t take it with you when you move.

💡 Quick Tip: Buying a home shouldn’t be aggravating. Online mortgage loan forms can make applying quick and simple.

Renting a Home vs. Owning a Home Differences

Deciding whether to buy or rent is a major decision that can involve your financial and personal needs and aspirations. Here are some specifics:

•  Renting a home offers you more flexibility in terms of when and where you move; you will likely feel less anchored in a property.

•  Renting may well be less expensive: You don’t need to come up with a down payment, and rent may cost less than a mortgage or a mortgage plus property taxes.

•  However, when you have a mortgage, you are likely building equity and wealth, which you may choose to borrow against in the future (say, with a cash-out refinance). You may not have that feeling of “throwing money away” every month on rent.

•  When you buy a home, you are on the hook for that monthly payment, but, if you have a fixed-rate loan, it is more predictable than rent which may fluctuate with the housing market.

•  As a homeowner, you would be liable to pay taxes and insurance, as well as bankroll any renovations and upgrades to your home.

•  When you own your own place, you can personalize it to suit you, whether that means putting in a spa bathroom, knocking down walls, or building a patio.

Buying a Home vs. Renting an Apartment

When it comes to deciding whether to buy a property or rent a home (say, an apartment), there is no right or wrong answer.

•  Renting is often more affordable, allowing you to save money and perhaps meet other money goals like paying down debt.

•  Renting is more flexible in most cases. If you rent an apartment, you are able to move at the end of your lease (or possibly before) without a lot of hassle.

•  When you rent an apartment, your landlord is probably covering property taxes and will be responsible for repairs, such as HVAC upgrades or a clogged sink.

That said, when you buy a home, you may find the following:

•  A bigger financial commitment may be required (down payment, closing costs, property taxes, home maintenance), but you are building equity and possibly growing your wealth.

•  You can make your place yours and renovate it to suit your taste.

•  Buying a home vs. renting an apartment can give you a sense of security: You won’t have a landlord who can raise your rent by a major amount, and you can put down roots in a community.

4 Signs You May Be Ready to Buy

If you think owning a home vs. renting is right for you, here are four signals that you may be ready to move ahead.

1. Your Budget Is Big Enough to Cover the Expenses

Home ownership isn’t all gain, no pain. Expenses may include:

•  Down payment and closing costs

•  Mortgage payments, including property taxes, homeowners insurance, and, if applicable, private mortgage insurance

•  Repair and maintenance costs, including HOA dues, if applicable.

How can you budget for these upfront and ongoing expenses? One way is to take a look at the average amount each of these costs in the housing market where you plan to buy a home to get a sense of how home-related expenses may affect your finances in the larger picture.

Doing some number crunching with a home affordability calculator may be enlightening.

You may get excited about buying a fixer-upper when watching home improvement shows. A common mortgage for such homes is an FHA 203(k), backed by the federal government, which includes money for the purchase price and some repairs and renovations.

Buyers will need to get bids for all the repairs they hope to fund with the loan. For less extensive repairs/improvements, there’s a Limited 203(k).

If the desired renovation is on the smaller side and you acquire a traditional mortgage, cash or a personal loan are options.

You can get an idea of how much your chosen home repair or improvement costs will be with this home improvement cost calculator.

💡 Quick Tip: 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.

2. You Plan on Staying Put for a While

Buying a home signals more of a commitment to location than renting. If you’re likely to relocate in the coming couple of years, renting may be the right move.

Here’s why: If you buy a home and sell it soon after, there’s a chance you’ll barely break even. That’s because real-estate commissions and other factors will come into play. And the financial and emotional stress of selling again soon after buying can be significant. On the other hand, if you can see yourself staying put in your new home for a while, it might be a sign to start shopping.

3. You Have Good Credit

Your good or better credit profile may have been advantageous when applying for a place to rent.

The credit you’ve spent years building will likely pay off in a bigger way once you make the move to own, with improved lending terms such as a lower mortgage rate offered.

What credit score is needed to buy a house? The average American’s credit score remains in the range considered “good.” But applicants with “fair” and even “poor” credit scores can and do secure mortgages.

Here’s how credit scores are usually classified:

•  Excellent: 800–850

•  Very good: 740–799

•  Good: 670–739

•  Fair: 580–669

•  Poor: 300–579

If you’ve spent years building your credit and your number reflects that, then you might be financially ready to buy a home.

Credit score requirements for loan program eligibility and pricing can vary from lender to lender, so you may want to shop around.

4. Rents in Your Area Are High

In many markets, the rising price of rent could make buying more enticing than ever. It may be a smarter move to invest your money toward homeownership vs rent.

Two big factors to consider are:

•  How long you plan to stay in your home

•  The price-to-rent ratio, which compares the median home price and median annual rent in a given area.

Several websites (such as Zillow, Trulia, and Realtor.com) have tools that allow you to assess the dollars and cents of renting vs. buying. Estimating your break-even point of renting vs. owning a home could be another useful way to answer the question of whether it’s a good time to buy a home.

It’s best to take the calculations with a grain of salt, though. These are general estimates, and no one can predict the future of housing prices, rents, and taxes.

The Takeaway

When considering whether to buy vs. rent, there’s not one right decision. It’s a matter of which scenario suits your life and your financial situation at a given time.

Signs that you may be ready to buy a home can include having an adequate budget for the costs involved and a good credit profile, a desire to put down roots, and an understanding of the price-to-rent ratio in your target area.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

What are the advantages of owning vs. renting a home?

There are several pros to owning vs. renting a home. You can build equity in your home and potentially grow your net worth. What’s more, you can personalize your home however you like. You’ll also have stability in terms of both knowing your housing costs every month (versus a surprise rent hike) and putting down roots in a community.

What are 3 disadvantages to owning a home?

There are several cons to owning vs. renting a home. You may face higher costs (down payment, closing costs, mortgage, plus property taxes). In addition, you will be responsible for home maintenance, which can be pricey and require your time and energy. You’ll likely have less flexibility in terms of moving, too.

What is the main reason to avoid renting to own?

Renting to own can be problematic if you change your mind. You can wind up losing your down payment and other charges.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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

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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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

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.

SOHL0423021

When you’re ready to buy a house and need a home loan, a mortgage broker can help you shop for a mortgage, or you can go straight to a direct lender such as a bank or credit union and get the mortgage on your own.

Which way of shopping for a mortgage is better? If you have credit issues or other needs, using a broker to see an array of options might make sense. But if your financial health is solid and you want to save time and money, applying with a direct lender could be a good course of action.

In any case, it’s smart to get a few quotes and compare offers for the same type of loan and term.

What Is a Mortgage Broker?

A mortgage broker is like a personal shopper for home loans and serves as an intermediary between the mortgage seeker and lenders, including banks, credit unions, and private mortgage companies.

With a single application, a broker will provide you with access to different types of mortgage loans and, if you choose one, will walk you through underwriting.

Mortgage brokers are licensed and regulated. You’ll want to ensure that any broker you’re interested in working with is credentialed by checking the Nationwide Multistate Licensing System & Registry consumer access site. You can also check platforms like the Better Business Bureau and Yelp to see what past clients say.

Brokers are compensated by the borrower or lender. Borrower fees typically range from 1% to 2% of the total loan amount. Lender commissions may range from 0.50% to 2.75% of the total loan amount, but lenders usually pass the costs on to borrowers by building them into the loan.

How to Find a Mortgage Broker

You could ask your current lending institution, friends, family members, or real estate agent for a referral to a mortgage broker. After checking licensing, you may interview more than one broker before deciding on one. You might want to ask about their fees, lenders they work with, and experience.

What Is a Direct Lender?

In the mortgage broker vs. lender dichotomy, a direct lender is the bank, credit union, or mortgage company that originates, processes, and funds mortgages.

Mortgage loan officers, processors, and underwriters work for the company. Loan originators usually work on commission.

A loan officer may offer a mortgage at various price points, from a loan with discount points for a lower rate to a no-closing-cost loan, which is when the lender agrees to pay the closing costs in exchange for a higher interest rate.

Recommended: First-Time Homebuyer Guide

How to Find a Direct Lender

Most people have a relationship with a bank or credit union, so you can always start by getting a quote there. But there are myriad online mortgage lenders and it’s worth considering these options. Pulling up the day’s mortgage rates online will conjure a list of direct lenders advertising their rates.

What Are the Pros of Working With a Mortgage Broker?

Because they are able to offer a variety of quotes from different sources, brokers can be useful if you’re looking to easily compare mortgage options.

They may offer specialized loans, and because loan brokers set their own profit margins, negotiating could be easier.

A broker could be useful if you have concerns like a fair or bad credit score or student loan debt.

What Are the Cons of Working With a Mortgage Broker?

Brokers may have preferred lenders that don’t necessarily offer the best interest rate. If paid by lender commission, a broker could be tempted to steer a borrower to a more expensive loan.

If paid by lender commission, a broker could be tempted to steer a borrower to a more expensive loan.

Brokers’ loans may take longer to close.

Broker fees tend to be higher, but that could be because the mortgages offered are sometimes more complex. And mortgage brokers may charge borrowers directly (the fee of 1% to 2% of the total loan amount).

What Are the Pros of Working With a Direct Lender?

By working with a direct lender, you’ll skip the broker fees, and you may get a better rate with lower closing costs (although both lenders and brokers can offer “rebate pricing” — a higher interest rate in exchange for lower up-front costs).

A direct lender typically does all the loan processing, underwriting, and closing in-house.

You may be able to negotiate underwriting or origination fees.

What Are the Cons of Working With a Direct Lender?

Comparing rates and terms on your own from a sample of lenders takes time.

You’re limited to the loan programs of the institutions where you decide to shop.

What Works for My Situation?

You’ve probably toyed with at least one home affordability calculator and gotten preapproved for a loan.

Once you’ve found a home and your offer has been accepted, it’s decision time on a lender. You are not required to stay with the lender you used for pre-approval.

If you have a sparse credit history, subpar credit, or other challenges, a mortgage broker might be able to find a loan program that’s a good fit.

But if you have solid credit, a strong income, and assets, you may be able to save time and money by working with a direct lender.

What about rates? In weighing mortgage broker vs. bank, there might be no difference to speak of. The rate you’re offered depends more on your qualifications than on the lender.

The mortgage loan process can seem mysterious, and a broker or a loan officer at a direct lender can act as a loan seeker’s guide.

That guide should be willing to answer all of your mortgage questions, including those about points, fees, mortgage insurance, and the closing timetable.

You’ll receive loan estimates after applying. When comparing mortgage offers, it’s important to look at more than the interest rate. Be sure to compare annual percentage rates, or APRs, as well.

Look at the fees in the “loan costs” section, and compare closing costs.

The Takeaway

If you’re in the market for a mortgage, you might think the choice comes down to mortgage broker vs. direct lender. But you may get loan quotes from both and compare them. It’s called shopping, and a home is a rather important purchase. And as with any form of shopping these days, it’s easily done with a phone or computer, from the comfort of your couch.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

Is it better to use a broker or a direct lender?

If you have a challenging credit score, or limited credit history, or other financial complexities, a broker might be the way to go. But if your finances are solid you may find going the direct lender to be the most cost-effective way to obtain a home loan.

Why use a mortgage broker instead of just going to a bank?

A mortgage broker can research possible rates from a wide range of lenders, which could save you time. And if you have a challenging financial situation or credit history, a broker might be able to steer you to a lender who will work with your profile.

Does a mortgage broker charge a fee?

Yes. A borrower may have to pay a mortgage broker’s fee of 1% to 2% of the loan amount. When the lender pays a broker a commission, it may range from 0.50% to 2.75% of the total loan amount and these costs are passed on to the borrower by being built into the loan.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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

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.

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.

SOHL-Q324-031

The IRS says that if you file your return electronically and enroll in direct deposit, you can probably receive any refund you qualify for within three weeks. That speed can be a real upside of getting organized and filing early, especially if you have plans for the funds coming back to you (such as paying for summer vacation plane tickets).

Those who file a paper return, however, will likely have a longer wait. Read on to learn more and manage your expectations, including:

•   How long does it take to get my federal tax refund?

•   When will I get my tax refund?

•   What affects the time it takes to get a tax refund?

•   How can you check on where your tax refund is?

IRS Refund Schedule for Tax Year 2023

For those who are curious about when exactly a refund should arrive for the tax year 2024 (filed in 2025) or for tax year 2025 (filed in 2026), consider this information:

Federal Tax Refunds

In terms of when you will get your federal tax refund, here is a typical timeline of when refunds are issued after filing:

•   Up to 21 days for an e-filed return

•   4 weeks or more for amended returns and returns sent by mail

•   Longer if your return needs corrections or extra review

State Tax Refunds

When it comes to issuing refunds, each state handles things in their own way, on their own timeline, so it can be difficult to generalize.

Typically, a state tax refund can take anywhere from a few days to a few months for processing. If you filed a paper copy vs. electronically, that may lengthen the usual time for refund processing and the arrival of your funds.

Tax Return Extension

Sometimes, a taxpayer will not be able to file their return by the Tax Day deadline. Perhaps they are missing important tax documents, are experiencing a family or personal emergency, or maybe they just procrastinated. Whatever the case, there is a mechanism in place that allows for an extension.

The IRS allows people to file for a six-month tax extension for submitting their return. However, the extension request, plus any taxes owed, are still due on that April deadline (the 15th or slightly later if it falls on a weekend or holiday).

If you are due a refund, it will be delayed if you submit your tax return late. The volume of tax returns filed late can impact how soon you get your refund.

Form 4868

To request an extension, an individual should file IRS Form 4868. The form captures basic information about the taxpayer, such as name, address, Social Security number (SSN), and how much you believe you owe.

Anyone, regardless of income, can submit this form electronically as part of the IRS’ Free File program.

Recommended: What If I Miss the Tax Filing Deadline?

How Long Does the IRS Take to Process Your Taxes?

The IRS says that it issues more than nine out of 10 refunds in less than 21 days. That said, sometimes the processing of a return can take longer, even if a return was filed electronically.

If a return needs to be reviewed manually, it will likely take longer as well. Factors that can lead to a manual review include incorrect or missing information or identity theft situations. More detail is provided below.

Recommended: Steps to Prepare for Tax Season

Common Tax Refund Delays

If you’re wondering how long does it take to get a tax refund, know that there is not a single, specific timeframe for all taxpayers, and that delays can and do happen.

The IRS cautions visitors to its website not to expect their refund by a certain date. Though most taxpayers typically receive their refund within three weeks, and possibly in even less time if they e-file and choose direct deposit, there are several reasons why a payment might be delayed.

Here are some issues that could cause a holdup:

Filing a Paper Return

Under normal circumstances, the IRS says, it can take several weeks to process a paper Form 1040. Unlike returns that are filed electronically, paper returns must be manually entered into the IRS system.

•   Tax returns are opened in the order they’re received, so if your refund is taking longer than expected, the date you sent your return could be a factor as well.

•   The delivery option you choose for your refund also can affect how quickly you receive your funds. According to the IRS, the fastest way to receive your refund is to combine the direct deposit method with an electronically filed tax return. But taxpayers who prefer a paper return also may be able to speed things up a bit by choosing direct deposit for their refund instead of a paper check.

•   Note: If you e-file, direct deposit is again your fastest path to any refund that’s due (typically one to three weeks), as noted above. If you e-file but request a paper check, that will take a bit longer, often closer to one month.

Providing Incorrect or Incomplete Information

Did you or your spouse forget to sign your return, or did you type in the wrong Social Security number? Returns with missing information or errors can cause extra work for the IRS, which could hold up a refund.

What’s more, the IRS is strengthening its screening process to help fight identity theft, so even the smallest mistake — such as using a different name than what’s on your Social Security card or misreporting what is W-2 income — could slow things down. If the information you provide is wrong or something is missing, you can expect the IRS to contact you for additional documentation or to correct the error.

Claiming Certain Tax Credits

If you’re claiming the additional child tax credit (ACTC) or the earned income tax credit (EITC), the IRS won’t issue your refund before mid-February. A federal law that took effect in 2017 gives the IRS extra time to review those returns, check employers and other information, and detect any possible fraud.

Filing an Amended Return

You may have to amend your return if you find you made an error or there’s a change that affects your income, your income tax bracket, and/or your deductions — and that could delay your refund by several weeks. According to the IRS, it can take up to 20 weeks to process an amended return — even if it was filed electronically.

You can check your return and refund status daily with the IRS’s Where’s My Amended Return tracking tool .

Tax Fraud

A missing refund could be a sign that someone used your personal information to file a fraudulent tax return in your name. If you suspect you may be the victim of tax fraud, the IRS lists several recommendations for what to do next on its Taxpayer Guide to Identity Theft web page, and the agency advises potential victims to report their concerns to the Federal Trade Commission.

Existing Government Debt

If you have certain kinds of delinquent debt owed to the federal government, what is known as tax refund offset may occur. This means that an individual’s refund may be partially or completely withheld to satisfy the debt.

You will generally be notified if your refund is being reduced or withheld in this way, and you can dispute the payment with the agency that received it. And if there’s any money left after the offset, you’ll receive it by direct deposit or in a check, depending on what you requested on your tax return.

To ask questions about delinquent debt, you can contact the Treasury Department at 800-304-3107.

Your Refund Went Missing

If you e-filed with third-party tax software or the IRS’s Free File system, you likely received confirmation that your return was received and accepted. If you don’t remember getting a confirmation notice or if you’re concerned because you haven’t heard anything since then, you can check your status with the agency’s Where’s My Refund tool. Some next steps:

•   If the IRS’s Where’s My Refund tool says your refund check was mailed but 28 days or more have passed and you haven’t seen it, you can file a claim online to receive a replacement. (The Where’s My Refund site will show you how.)

•   Even if you opted for direct deposit, it still could take a few days for the money to show up in your account.

•   If you think your refund has gone missing, you may want to call your bank about tracking the deposit, then move on to contacting your tax preparer or the IRS for help.

•   The IRS won’t accept responsibility if it sent a refund but you or your tax preparer wrote the wrong account number on your return. If the IRS notices an error or if your bank rejects the deposit and returns the money to the IRS, the IRS still may end up sending you a check (instead of using a direct deposit).

•   If you entered an account or routing number that belongs to someone else and the financial institution accepted the deposit, you’ll probably have to work with a bank representative to recover the money. The IRS cannot compel the bank to return the refund.

Tracking Your Tax Refund Process

If you are eagerly awaiting your income tax refund, a wise move can be to track its status on the IRS website or through the IRS2GO app.

You can begin checking your refund’s progress as soon as 24 hours after the IRS receives your e-filed return or four weeks after mailing a paper return. And, if everything goes smoothly, you can use the Where’s My Refund tracking tool daily to watch your tax return make progress.

•   To use the Where’s My Refund tracking tool, all you need is your Social Security number, your filing status (single, married filing jointly, etc.), and the exact dollar amount of your expected refund.

•   You may not get all the information you wanted about your refund, but it’s a start. If you can’t get enough intel there, your local IRS office may be able to help.

Tax Refund Mistakes

What about the scenario in which a tax refund arrives but it’s for less than you expected? Consider a couple of possibilities:

•   Your tax return could have contained an error, leading you to think you were due more money than you actually are.

•   You might have had your refund lowered by the Treasury’s Offset Program mentioned above.

In the situation of your refund being less than anticipated, there is likely an explanation provided from the IRS as to why. If you are not satisfied, you can use the methods outlined above to contact the IRS and gain more insight.

Tips for Getting Your Tax Refund Faster

If you’re hoping to get your next refund faster, here are a few steps that might help:

Filing Electronically

As mentioned above, filing electronically vs. filing a paper return can speed up your refund. It can typically shave a week or two off of getting your money back via direct deposit and a month off the time for a refund check to be issued.

Choosing Direct Deposit

The IRS says refunds will generally be received by taxpayers sooner if they have e-filed and selected direct deposit. Even if you prefer mailing in a paper return, you can choose to have your refund deposited into your account.

Providing Accurate Information

Pay attention to every detail as you prepare your taxes. Don’t let a little mistake or an omission of data cause a long delay.

Filing Early

By filing as soon as possible during tax season, you’ll be able to position your return at the front of the line for processing. And by starting early, you’ll give yourself plenty of time to research any tax help you may need along with tips that might apply to you, your business, and your family.

Just remember the point above about returns claiming the ACTC or EITC not being processed until mid-February at the earliest.

The Takeaway

Most tax refunds are issued within one to three weeks if you file electronically and opt for direct deposit of your refund. If you file a paper return or opt for a refund check to be mailed to you, it can lengthen the timeline. In any scenario, the IRS provides tools that can help you track your refund and know where your return is in terms of processing.

If you are due a refund and need a great place to deposit it, you may want to make sure your account offers minimal or zero account fees and a competitive annual percentage rate (APR).

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

FAQ

When will I get my tax refund for 2023?

Your tax refund arrival will depend on when you filed your return, how you filed it, and how you indicated you’d receive your tax refund. Typically, filing electronically with direct deposit is quickest, with the refund arriving within three weeks. If you file electronically with a paper check as the refund, that could take longer since the check has to be mailed. Paper returns can take several weeks, with those requesting refunds via paper check requiring still longer.

What is the 2023 IRS tax refund schedule?

The 2023 tax year season began on January 29, 2024, and the deadline is April 15, 2024. Tax refunds are issued at varying speeds, depending on whether you file electronically or with a paper return, and whether you request your refund be direct-deposited or sent as a check. The fastest option is to file electronically and have the refund direct-deposited. This typically takes three weeks or less.

How long does it take to get your tax refund through direct deposit?

How long it takes to get your refund through direct deposit will vary depending on whether you filed an electronic or paper return. The majority of electronic returns are processed in three weeks or less, with direct deposit happening very soon thereafter. Paper returns, however, can take several weeks or longer, with refunds taking at least that long to hit a taxpayer’s bank account.

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SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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