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How to Pay for Emergency Home Repairs, So You Can Move on ASAP

A home’s mechanical systems, exterior features, and large appliances don’t last forever. Even with regular maintenance, sometimes an expensive-to-fix item will fail. So figuring out how to pay for emergency home repairs is something homeowners may want to think about before that emergency happens.

How Much Do Common Home Repairs Cost?

From the roof to foundation, there are a lot of things in and on a home that might need to be repaired, and some of those things might be emergency home repairs at some point.

Roof

A home’s roof has a certain life expectancy, generally based on the material used. A roof made of asphalt shingles might last from 15 to 20 years, while concrete or clay-tiled roof could last for more than 50 years.

Regular roof inspections are a good way to identify any minor problems, which may typically cost from $150 to $400. Minor repairs might include:

•   Gutter cleaning.

•   Patching leaks.

•   Replacing shingles.

•   Repairing flashing.

Major issues found during a roof inspection might cost up to $7,000. These could include:

•   Substantial water damage.

•   Chimney repair.

•   Sagging or shrinking roof.

•   Environmental issues, such as mold.

Replacing a roof, a major expense, may be necessary at some point in the life of a home. For an average-sized home, a completely new roof can cost $8,000 or more.

Recommended: What are the Most Common Home Repair Costs?

Foundation

Foundation issues can show up as cracks in a home’s walls, floors that are not level, gaps around windows, or doors that don’t close properly. Fixing these symptoms of a foundation issue won’t fix the underlying problem, but fixing the foundation at the earliest sign of the symptoms may mean a less costly foundation repair.

Hiring a structural engineer can be a good first step if there appear to be major foundation problems, as they won’t be trying to sell a product to fix any potential problems, so will likely be unbiased. A structural inspection can range from $300 to $600.

•   Cracks in a foundation that don’t affect the structure are minor repairs but are best not ignored, lest they lead to major issues. Potential cost: between $250 and $800.

•   A leaking foundation might be the cause of those cracks. Waterproofing a foundation, which may involve excavating around the foundation, installing tile drains, filling cracks, and then coating the structure with a sealant, can cost anywhere from $2,000 to $7,000.

•   A house with a settling or sinking foundation may have flooring that is warped or sloping, doors and windows that don’t open and close properly, or even exterior cracks, or other apparent issues. The cost generally depends on the type of repair. Raising a house using piers can cost between $1,000 and $3,000, while mudjacking might be between $500 and $1,300.

Water Damage

Water damage in a basement might be due to flooding from a storm or broken water line, for example, and is best fixed quickly so mold doesn’t grow and become another issue to take care of. In addition to being an unpleasant sight, standing water can cause structural or electrical issues in a home. Extraction of the water is generally the first step in this type of repair, followed by any necessary structural repairs.

•   For simple fixes, such as cleaning up after an overflowing toilet, the cost might be around $150.

•   To extract gray water, which is water from bathtubs, sinks, or washing machines, extraction and related repairs can cost $3,000 on average.

•   Water that contains fecal matter from sewage backups is called black water. This is the costliest type of repair because it poses a significant health hazard. The cost to extract black water and make related repairs can be as high as $20,000.

Recommended: How Much Does It Cost to Finish a Basement?

Mold

If the above water issues are not fixed in a timely manner, mold can grow on the surfaces, requiring additional necessary repairs. In addition to damaging any surface mold grows on, it’s also a serious health hazard, potentially causing allergic reactions, asthma attacks, and skin irritation. Mold remediation costs average between $1,500 and $3,000.

Pests and Rodents

Pests and rodents in a home can be more than just annoying. Infestations might cause major damage to a home if left untreated. One-time pest control costs around $250 to $350 on average. Ongoing services — sometimes monthly, quarterly, or annual recurring treatments — may cost from $50 to $400, depending on the frequency.

•   Damp areas can attract pests, such as cockroaches. The average cost for getting rid of them is $150 to $400, and it might take more than one visit to completely eradicate them.

•   Attics can be inviting spaces to rodents like mice, rats, or squirrels, or other animals such as raccoons or bats. Damage might be to woodwork, insulation, or wiring and cost between $150 and $400 to repair.

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HVAC

A home’s heating, ventilation, and air conditioning (HVAC) systems control the regulation and movement of air throughout the building. Like other components in a home, it’s wise to have an HVAC system inspected regularly to catch any problems before they become serious. A standard tune-up for an HVAC system might start at $99, with any potential repairs added to that. Some companies might offer ongoing maintenance plans, which could be a cost saver over time.

•   Furnace repairs might be for a blower, ignitor, flame sensor, heat exchanger, circuit board, or valve. The cost can vary depending on the part and whether it can be repaired or if it needs to be replaced, and the labor charge for doing the repair. Simple repairs may be as little as $100, while more extensive part replacements can be as much as $1,500.

•   Like furnaces, air conditioners have a lot of individual parts, any of which might need to be repaired or replaced at some point. Capacitor replacement is a common air conditioning cost, and can range between $90 and $475. One of the more expensive costs is an air compressor replacement, which can be between $1,350 and $2,300. Costs will vary by model of the air conditioner and servicer.

Recommended: What Is the Cost to Replace an HVAC System?

Electrical

Electrical issues in a house can vary from minor repairs, such as replacing an outlet, to wiring overhauls that may require professional help.

•   Hiring an electrician to replace a home’s outlets can cost around $100 to $250. For someone who is confident in their DIY skills, this relatively simple job can be done for about $5 per outlet.

•   Replacing a circuit breaker or the entire electrical panel is something homeowners might leave to a professional. Costs will depend on the number of breakers being replaced or, in the case of replacing the electrical panel, how many amps. Circuit breaker replacement might cost about $50 per breaker. Panel replacement or upgrade can be anywhere from $1,000 to $4,000.

•   Rewiring a home can be quite expensive and include other repairs, such as plaster or drywall repair. To rewire an entire home, a homeowner might expect to pay between $3,000 and $8,000.

Ways To Finance an Emergency Home Repair

Even with regular inspections and maintenance, sometimes emergency home repairs are necessary. Paying for these repairs might involve using a variety of sources, depending on what is available and a person’s individual financial circumstances.

Homeowners Insurance

Homeowners insurance may be the first source most homeowners look to when needing to pay for emergency home repairs. The policy will stipulate what is covered, how much the company will pay, and any amount the homeowner might be responsible for, such as a deductible. Some things a typical homeowners insurance policy might cover are costs to repair or rebuild after a disaster, replacement of personal belongings that were destroyed because of a disaster, or the costs of alternative housing while repairs are being made or a house is being rebuilt.

Emergency Fund

If there is a sufficient amount in an emergency fund, paying for an emergency home repair with cash on hand is an option that won’t incur interest. How much to save in a home repair emergency fund will depend on the home’s size, age, and value. Older or more expensive homes might mean higher repair costs.

A typical recommendation is to save between one and four percent of a home’s value in a home repair emergency fund. For a typical American home valued at just over $300,000, this means having between $3,000 and $12,000 saved for emergency home repairs. This is certainly a goal to work toward, but even $1,000 in savings can be helpful.

Home Equity

Homeowners who have built up equity in their homes may choose to use that equity to pay for emergency home repairs. Using this type of financing, however, does come with some risk because the home is used as collateral. If the borrower defaults, the lender may seize the home as a way to repay the debt. There are two types of loans that are based on a home’s equity: home equity loans and home equity lines of credit (HELOCs).

A home equity loan is a fixed-rate, lump-sum loan. It has a set repayment term, and the borrower makes regular, fixed payments consisting of principal and interest.

A HELOC also uses the equity a homeowner has built up, but the borrower does not receive a lump sum, instead of accessing the loan funds as needed until the loan term ends. Funds can be borrowed, repaid, and borrowed again, up to the limits of the loan. HELOCs are variable-rate loans and consist of two periods: a draw period and a repayment period. The draw period is the time during which money can be borrowed, and might be 10 years. The repayment period is the time during which the loan is repaid and might last for 20 years. The combination of the two would make this example a 30-year HELOC.

Recommended: The Different Types Of Home Equity Loans

Assistance Programs

If emergency home repairs are required, but the homeowner can’t afford to pay for them, assistance programs might be an option to look into.

•   Government loan or grant assistance. The U.S. Departments of Housing and Urban Development (HUD) , Agriculture (USDA) , and Veterans Affairs (VA) offer grants and loans to eligible homeowners for home repairs and improvements.

•   Disaster relief . HUD offers several programs for homeowners affected by federally declared disaster areas. HUD partners with other federal and state agencies to provide relief in the form of mortgage assistance, relocation, food distribution, and other types of disaster relief.

•   Community Assistance Programs. Funding assistance may be able to be found by looking at local sources, such as county or city governments or charities. A good place to start a search is through HUD’s state listings .

Credit Card

Using a credit card to finance emergency home repairs might be the first option some people think about. It can certainly be a quick way to pay for such repairs. There are pros and cons to using a credit card for this purpose.

If the credit card is a zero-percent-interest card — and the balance can be paid in full before the promotional period ends — this can be a way to pay for an emergency home repair without paying interest.

Credit cards are more likely to have high-interest rates, though, which can add a significant amount to the account balance if not paid off quickly. Credit cards also come with borrowing limits. A major emergency home repair might max out this limit or even exceed it. Using all available credit can potentially have a negative effect on a borrower’s credit score.

Should I Get a Home Repair Loan?

Another option to pay for emergency home repairs might be a home improvement loan, which is a type of personal loan.

•   An unsecured personal loan does not use collateral, like a home equity loan or HELOC, so the borrower is not risking losing their home if they can’t repay the loan. The potential loan value is also not limited by the amount of equity in the home.

•   An unsecured personal loan may be funded more quickly than a home equity loan or HELOC. Because there is no collateral to determine a value for, this cuts out a potentially time-consuming step included in secured loans.

•   Personal loans can be used for a variety of reasons, not just emergency home repairs. If there are expected repairs, planned repairs, or home renovations that might make a home more livable, an unsecured loan can be a good option.

Recommended: What Are Personal Loans Used For? And How to Apply

The Takeaway

It’s probably safe to say that nobody likes to think about emergencies. But it’s wise to be prepared in the event that one arises. If a personal loan is the option that works best for your financial situation, a SoFi home repair loan might be one to consider.

Unsecured personal loans from SoFi have competitive interest rates, no fees, and terms that can work for a variety of budgets and financial needs.

Find your rate in just one minute.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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 Personal Loans for Single Mothers

Personal Loan Need to Knows for Single Mothers

Whether you’ve been a single mom since day one or are in the process of becoming a solo parent, raising a child on your own is expensive. Housing, essentials, and extracurriculars add up. Add in unplanned days off for childcare, major expenses like dental work and medical insurance, or expenses like legal bills during a separation, and you may find yourself with your finances stretched thinner than you’d like.

One option to consider is a personal loan that is paid back with interest in monthly payments. When approved, a borrower receives a lump sum of cash they can then use as they would like. Some people use a personal loan to pay down other, higher-interest-rate debt. But other people use a personal loan for a large purchase or to help pay current bills.

Why Might a Single Mom Need a Personal Loan?

There are many reasons why a single mother — or any parent — might need a loan. But sometimes people facing a financial shortfall may turn to a personal loan to help them get through a particular circumstance. This might include:

1.    Consolidating debt.

2.    Moving expenses.

3.    Tuition or extracurricular expenses for children.

4.    Stopgap during times of unemployment.

5.    Housing costs, such as rent or a mortgage.

6.    Home remodeling costs.

7.    Vehicle purchase.

8.    Appliance purchase.

Of course, there are many other reasons as well, and there’s no wrong reason why single moms might feel they need more money. But considering what a personal loan is to be used for can help you assess next steps. Depending on where you apply for a loan, you might need to share the reason for applying, which may then be cross-checked during the application process.

Are Personal Loans for Single Mothers Special?

In a word, no. The process of applying for a personal loan is the same for everyone. But there may be hurdles to overcome as a single parent.

•   Credit score. Separation and divorce, as well as putting expenses on a credit card and not paying down the balance, may adversely impact a credit score.

•   Income. If an applicant doesn’t have steady income, it may be harder to be approved.

•   Budget. If a borrower has trouble paying their current bills and is looking for a personal loan to help cover expenses, then a personal loan may be a short-term fix for single-parent budgeting that could potentially get a borrower deeper into debt.

Benefits and Risks of Personal Loans for a Single Mother

There can be a lot of financial pressure on a single parent responsible for all family expenses. If a single parent lost a job, how would expenses, including paying back a personal loan, be covered?

But for certain circumstances, a personal loan may be an option to consider. For example, maybe a single mom had lawyer bills pile up during a separation, but has downshifted her expenses and has enough liquid income to cover expenses, but not a large bill all at once.

A personal loan may also make sense if someone’s life is currently in flux: They plan to downshift their life, but need money to remodel their current home to rent out or have a roommate move in, or need money to consolidate high-interest credit card debt and potentially lower the amount of money they have going toward bills each month.

Personal loan interest rates tend to be fixed, rather than variable, which is one factor that may make a personal loan a more attractive choice than putting expenses on a credit card.

The interest rate you’re charged on a personal loan won’t change during the term of the loan, and you’ll know exactly how much money you’ll be paying back each month. Interest rates also may be lower than credit card interest rates, especially if a borrower has good credit.

And because the money from a personal loan is cash in a bank account, it may be easier to pay certain expenses, such as housing expenses, than it would be with a credit card.

Considering the risks and benefits for your situation can help you decide whether a personal loan is right for you. Some things to ask:

•   What budgeting strategies do you currently have?

•   Will the loan payment fit into your current budget, or do you have a plan to increase your income to be able to afford the loan payment?

•   Does the loan have any programs for unemployment or hardship? What other options might be available? These may include, depending on circumstance, borrowing from family, downshifting elements of your lifestyle, looking for hardship/assistance programs, or boosting income.


Pros and Cons of Personal Loans for Single Mothers

Pros

Cons

Can pay down large bills that need to be paid in full. Can be challenging to juggle another monthly payment, especially if already financially stretched.
Can consolidate other debts and have a fixed sum each month to pay, at a potentially lower interest rate. Can be challenging to secure a personal loan without steady income or if you’re still building credit.
Can give access to a lump sum of cash for needs such as renovations or tuition. Can add to stress, especially if income is unstable or in flux.

Is Getting a Personal Loan With No Income Possible?

When applying for a personal loan, you’ll be asked for your income, your reason for applying for the loan, and maybe your tax returns or W2s to verify your income. The lender will run a hard credit check on your credit report to assess your creditworthiness. If you’re looking for a personal loan, but are a single mother with no job or have been a stay-at-home-mother and have a lackluster credit history, these may be difficult-to-overcome hurdles during the application process.

If you don’t have an income, then you might consider a cosigner or co-applicant for your loan, who agrees to make the loan payments if the main borrower cannot or does not. For some borrowers, family members have the financial flexibility to cosign on a loan, but it can be a good idea to have a conversation about expectations and potential hypotheticals if you were no longer able to pay back the loan.

Alternatives to Personal Loans for Single Mothers

There are other alternatives to personal loans, depending on your financial circumstances and your needs.

Home Loans for Single Mothers

If you own your home, using your home as a financial asset may be one way to pay down bills. Tapping into the value of your home with a home equity loan or a home equity line of credit, or by refinancing your home are some options to consider.

Federal Grants and Aid

If your income and certain other resources meet eligibility requirements, you may be eligible for federal grants and aid. This can include everything from the Temporary Aid to Needy Families (TANF) program to food and housing assistance, among others. The benefits.gov website offers a list of programs and eligibility requirements.

Educational Aid for Single Mothers

If you’re considering going back to school, it may make sense to look at federal student loan programs . There also may be private scholarships and grants available for single parents, available from the institutions you’re interested in. Speaking with the financial aid office may help you see the breadth of options available to you.

Other Financial Help For Single Mothers

Becoming a single mother, either by choice or circumstance, can feel overwhelming. But there is support out there. Talk to other single parents in your community: You may be surprised by resources that are available. Other opportunities may include:

•   Private grants or statewide grants. As with any grant you apply for, it may be a good idea to research the grant and make sure it’s legitimate. Some scams may prey on vulnerable people by trying to get them to share personal information. For example, a grant should never ask for your bank account information in an application.

•   Financial aid or tuition assistance. If your children are in private school or extracurriculars, there may be financial aid. Even if there’s not a formal program, it can’t hurt to explain your situation and ask what may be available.

•   Employer-based programs. Your human resources department may have certain programs, including childcare coverage, for eligible workers. Talk to your HR representative or look through their materials to assess. This may include free legal consultations, childcare coverage, or access to financial planning, as well as access to counseling.

•   Family and friends. Family and friends may be willing to provide support, or there may be creative ways to trade services, such as babysitting, for financial support. It can be helpful to put an agreement in writing and follow up occasionally to assess how the arrangement is going.

Recommended: Options for When You Can’t Afford Your Child’s College

The Takeaway: Personal Loans With SoFi

There are avenues that can help you manage your finances and achieve your financial goals. The right one depends on your circumstances. Deciding to take out a personal loan is a personal decision that depends on your financial situation now, as well as your goals for the future.

SoFi personal loans have no fees and fixed rates and terms that can fit a variety of budgets. Checking your rate will not hurt your credit score.* A SoFi loan also offers unemployment protection for eligible borrowers.

Check your rate at SoFi.

Photo credit: iStock/RyanJLane


*Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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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Average Cost of a Wedding in 2021

Average Cost of a Wedding in 2022

Dress? Check! Rings? Check! Masks? It’s no secret that the Covid-19 pandemic has totally upended the wedding industry. Both state- and federal-level mandates have imposed restrictions that would rightfully make any wedding planner throw in the towel. But with 93% of couples originally set to wed in 2020 still intent on holding their nuptials, most couples are taking on this extra stressor in stride.

But what does that mean for cost? The 2020 wedding season introduced a slew of new wedding trends such as sanitizing stations, virtual streaming, and secondary celebrations. The question is, how does that impact your already complex planning, and what does that mean for your bottom line in 2022?

Wedding planning is a tall order, especially with the aftermath of a pandemic, but it’s not impossible. Here’s a look at what you can expect from venues, vendors, and other costs as you plan this happy day.

What Is the Average Cost of a Wedding?

According to The Knot, the average cost of a wedding ceremony and reception in 2020 was $19,000. This is nearly one-third less of the costs from 2019, which averaged $28,000 for both events.

The drop in spending can be directly attributed to Covid-19, although one-third of couples who kept their 2020 wedding dates opted to hold mini ceremonies that averaged fewer than 20 guests. This tactic allowed them to keep their special days, conform to any covid gathering restrictions, and significantly cut costs in the process. But what do these trends mean for 2022 planning?

As brides and grooms rush to reclaim the large celebrations they were denied in 2020, they’ve budgeted approximately $22,500 for 2021 receptions, similar to the $23,000 spent on receptions in 2019. With the worst of the pandemic seemingly behind us, these couples are planning ahead with no inhibitions. It’s important to note however, that true wedding costs will vary based on how elaborate the event and the unique vendor and venue costs of the region.

What Goes Into the Cost of a Wedding?

Planning a wedding is a huge undertaking. From the dress to the decor, there are so many details involved that many couples choose to pay the $1500, on average, for a professional wedding planner to handle them all.

Also, because 2020 was such an anomaly for the wedding industry with most couples choosing to scale down their events, reviewing average wedding spending from 2019 will provide a better look at what to expect. These 2019 numbers are courtesy of The Knot’s Real Wedding Survey.

Pre-Wedding Costs

The purchase of engagement rings is generally what kicks off the entire wedding planning process. While the tradition of spending three month’s salary on a ring may be old and outdated, couples are known to spend $5,500 on rings on average.

The cost of wedding invitations can vary widely depending on many factors. Handmade paper will cost more than cardstock. Letterpress printing will cost more than digital printing. More guests means more invitations, which means a higher cost. The average cost of invitations is $590.

Then comes the dress, which can take months to find. Assuming you’re not bent on purchasing an elaborate couture gown, but definitely want to secure something nicer than what might be found on a bargain rack, a dress can average $1,600.

It would be a mistake not to hold a rehearsal with your full wedding party, and taking the opportunity to treat them to dinner, thanking them for being a part of your celebration, is tradition. Rehearsal dinners can cost around $1900.

Recommended: The Cost of Being in Someone’s Wedding

Vendor Costs

What is your big day if no one is there to capture it? Photographer costs can be as high as $2400 for a wedding. Should you choose to film it as well, you can expect to pay around $1800 for a videographer.

Wedding photos are lifetime memorabilia and people want to look good in them. Average costs for professional services are $110 for hair and another $100 for makeup.

If you need transportation to the wedding, from the wedding to the reception venue, or for a guest shuttle, it can cost around $800 on average.

Wedding decor is a must, and flowers are one of the most common choices. From the choice of your bouquet to the centerpiece arrangements on your guest tables, a proper florist can average $2000.

The star of the show—after the bride—is the cake. Whether traditional white or unconventionally colored, tiered or cupcakes, a wedding cake can cost around $500.

Reception Costs

The reception venue will likely be your largest expense. It is where you will feed and entertain your guests for the longest portion of your celebration and, depending on the type of venue you book, it may or may not come with decor. This can cost around $10,500.

You can’t let your guests go hungry. Catering your reception, accounting for any special dietary restrictions, and toasting with champagne, you’ll pay around $70 per person. If you want to offer top-shelf liquor, that cost can increase.

Now let’s dance! The music is what will set the tone for your celebration, and it’s likely what your guests will remember most after your “I dos.” A DJ can cost around $1200 for a wedding. A live band on the other hand will cost significantly more at $3700.

Some couples choose to give their guests wedding favors, a gift that says ‘thank you for coming.’ Purchasing favors for your guests that remind them of the great time they had on your big day will cost around $400.

A few ways that can help you cut spending costs include trimming the guest list, opting for a cash bar, and enlisting family and friends to help you DIY a few things. Make a shortlist of the planning details that are most important to you and you don’t want to skimp on, and consider spending less on the unlisted details that aren’t as meaningful. Also, be sure to leave a buffer in your budget. You never know if you’ll have to cover an unexpected wedding expense or even a last-minute guest, and having extra room in your budget will allow you to cover those costs without overspending.

Recommended: Affordable Wedding Venue Ideas

Smart Ways to Finance a Wedding

Knowing how much you can expect to spend is only one half of the wedding planning puzzle. The other half is actually funding the spending. With average wedding costs in the tens of thousands of dollars, it’s important to plan ahead so you can enjoy your special day with minimal stress.

Gifts and Contributions

A bride and groom seldom pay for their wedding alone. As a matter of fact, in 2019, couples only contributed 41% toward their total wedding costs with their parents taking on the brunt of expenses. Immediate family members can be a resource to help cover costs and are often happy to do so. Whether it’s the groom’s family that agrees to cover rings and clothes, or the bride’s family that takes care of the flowers and food, having a family discussion about who is able and willing to cover what on your big day can help relieve some of the spending stress.

Also, contributing cash isn’t the only way to help. Any time your family, friends, or even your wedding party can offer with planning, creating, or decorating anything that you might have otherwise paid someone else to do can help keep your budget in the black.

Recommended: Wedding Gift Etiquette

Savings

Being able to cover costs with funds from a saving account is one of the more ideal ways of covering large wedding costs. Couples that plan long engagements might be able to take advantage of this method more so than those with short engagements, simultaneously saving for and planning their big day over several months or years.

Retaining a comfortable amount of savings separate from wedding funds to have on hand for an emergency is always a smart money move that can help prevent financial roadblocks in the future. As much as you may want to fund your big day with savings, if doing so will put you in a financially precarious position or prevent you from reaching other financial goals, it may be better to err on the side of caution. Having those funds post marriage may be more important than spending them now.

Credit Cards

Credit cards provide quick and immediate access to cash that can be used to cover wedding costs. If you have particularly high credit limits, and not much cash on hand, it may be possible for you to cover the entire cost of your wedding on a credit card.

Though this may be one option among many, using your credit card might also come with a few drawbacks, such as high interest rates and an increase in your credit utilization ratio. Charging wedding purchases to your credit cards means you’ll be subject to paying interest on those charges until you pay off those credit cards. Also, using large amounts of credit will increase your credit utilization ratio and could, in turn, trigger a drop in your credit score. If that scenario will keep you from reaching future financial goals, you may want to think twice about using this method.

Personal Loan

Applying for a personal loan is another method for securing wedding funds. Personal loans tend to offer qualified applicants lower interest rates than traditional credit cards. A personal loan may also have a fixed interest rate that can help you manage and maintain steady payments over the life of the loan.

Another benefit of a personal loan is that it can help you build your credit. Diversifying the types of credit you have helps the three credit bureaus view you as a responsible borrower, and in turn may raise your credit score.

Awarded Best Personal Loan of 2022 by NerdWallet.
Low, fixed rates starting at 5.74% APR
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The Takeaway

Average costs are just that: average costs. Planning a wedding doesn’t have to be a budget breaker, but an event with this significance does come with some costs that probably don’t easily fit into most budgets. Using a personal loan to pay for wedding costs is reasonable if you are financially able to repay it.

SoFi wedding loans have no fees, low fixed rates, and can save thousands of dollars in interest compared to using a credit card. Getting prequalified takes just a few minutes, and loans can be funded in as little as three days.

Check your rate in two minutes.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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 or products 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.
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Do You Qualify as a First-Time Homebuyer?

A first-time homebuyer isn’t just someone purchasing a first home. It can be anyone who has not owned a principal residence in the past three years, some single parents, and others.

If the thought of a down payment and closing costs put a chill down your spine, realize that first-time homebuyers often have access to down payment assistance in the form of grants or low- or no-interest loans.

‘First-Time Homebuyer’ Under the Microscope

To get a sense of who qualifies for a mortgage as a first-time homebuyer, let’s take a look at the government’s definition.

The U.S. Department of Housing and Urban Development (HUD) says first-time buyers meet any of these criteria:

•   An individual who has not held ownership in a principal residence during the three-year period ending on the date of the purchase.

•   A single parent who has only owned a home with a former spouse.

•   An individual who is a displaced homemaker (has worked only in the home for a substantial number of years providing unpaid household services for family members) and has only owned a home with a spouse.

•   Both spouses if one spouse is or was a homeowner but the other has not owned a home.

•   A person who has only owned a principal residence that was not permanently attached to a foundation (such as a mobile home when the wheels are in place).

•   An individual who has owned a property that is not in compliance with state, local, or model building codes and that cannot be brought into compliance for less than the cost of constructing a permanent structure.

For conventional (nongovernment) financing through private lenders, Fannie Mae’s criteria are similar.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.


Options for First-Time Homebuyers

First-time homebuyers may not realize that they, like other buyers, may qualify to buy a home with much less than 20% down.

They also have access to programs that may ease the credit requirements of homeownership.

Federal Government-Backed Mortgages

When the federal government insures mortgages, the loans pose less of a risk to lenders, so lenders may offer you a lower interest rate.

There are three government-backed home loan options. In exchange for a low down payment, you’ll pay an upfront and annual mortgage insurance premium for FHA loans, an upfront guarantee fee and annual fee for USDA loans, or a one-time funding fee for VA loans.

FHA Loans

The Federal Housing Administration, part of HUD, insures fixed-rate mortgages issued by approved
lenders
. On average, more than 80% of FHA-insured mortgages are for first-time homebuyers each year.

If you have a FICO® credit score of 580 or higher, you could get an FHA loan with just 3.5% down. If you have a score between 500 and 579, you may still qualify for a loan with 10% down.

USDA Loans

The U.S. Department of Agriculture offers assistance to buy (or, in some cases, even build) a home in certain rural areas. Your income has to be within a certain percentage of the average median income for the area.

If you qualify, the loan requires no down payment and offers a fixed interest rate.

The USDA has an interactive map to determine if a community is considered rural.

VA Loans

A mortgage guaranteed in part by the Department of Veterans Affairs requires no down payment and is available for military members, veterans, and certain surviving military spouses.

Although a VA loan does not state a minimum credit score, lenders who make the loan will set their minimum score for the product based on their risk tolerance.

Government-Backed Conventional Mortgages

Fannie Mae and Freddie Mac, government-backed mortgage companies, do not originate home loans; they buy and guarantee mortgages issued through lenders in the secondary mortgage market.

They make mortgages available that are geared toward lower-income, lower-credit score borrowers.

Freddie Mac’s Home Possible program offers down payment options as low as 3%. There are also sweat equity down payment options and flexible terms.

Fannie Mae’s 97% LTV program also offers 3% down payment loans.

Fannie Mae’s HomePath Ready Buyer program offers first-time homebuyers the ability to buy foreclosed properties with as little as 3% down and help with closing costs.

A Mortgage for Certain Civil Servants

If you’re a law enforcement officer, firefighter, or EMT working for a federal, state, local, or Indian tribal government agency, or a teacher at a public or private school, the HUD-backed Good Neighbor Next Door program could be a good fit. It provides 50% off the listing price of a foreclosed home in specific revitalization areas. In turn, you have to commit to living there for 36 months.

Homes are listed on the HUD website each week, and you have to put an offer in within seven days.

Only a registered HUD broker can submit a bid for you on a property.

If using an FHA loan to buy a home in the Good Neighbor Next Door program, the down payment will be $100. If using a VA loan to purchase a house through the program, buyers will receive 100% financing. If using a conventional home loan, the usual down payment requirements stay the same.

State, County, and City Assistance

It isn’t just the federal government that helps to get first-time buyers into homes. State, county, and city governments and nonprofit organizations run many down payment assistance programs.

HUD is the gatekeeper, steering buyers to state and local programs and offering advice from HUD home assistance counselors.

The National Council of State Housing Agencies has a state-by-state list of housing finance agencies, which cater to low- and middle-income households. Contact the agency to learn about the programs it offers and to get answers to housing finance questions.

Using Gift Money

First-time homebuyers might also want to think about seeking down payment and closing cost help from family members.

If you’re using a cash gift, your lender will want a formal gift letter, and the gift cannot be a loan. Home loans backed by Fannie Mae and Freddie Mac only allow down payment gifts from someone related to the borrower. Government-backed loans have looser requirements.

Want to use your 401(k) to make a down payment? You could, but financial advisors frown on the idea. Borrowing from your 401(k) can do damage to your retirement savings.

The Takeaway

First-time homebuyers are in the catbird seat if they don’t have much of a down payment or their credit isn’t stellar. Lots of programs, from local to federal, give first-time homeowners a break.

SoFi offers home loans with as little as 5% down. See how your rate and terms stack up against the competition.

It’s easy to find your rate.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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

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.
Third Party Brand Mentions: No brands or products 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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Car Insurance Guide for New Drivers

Car Insurance Guide for New Drivers

Congrats, new driver: hitting the road goes a long way when it comes to freedom, autonomy, and just plain fun. But when it comes to driving, it’s safety first — and part of driving safely is having sufficient car insurance coverage.

The world of auto insurance can be a confusing one, especially for new drivers, who also often face the challenge of higher insurance premiums. Still, there are ways to save money on insurance, both immediately and as your time behind the wheel increases.

Here’s what new drivers need to know about auto insurance.

Car Insurance: The Basics


First things first: what is auto insurance, how does it work and why do you need it?

Car insurance pays out money for car repairs, medical bills, and other expenses in the event you get in an accident. Liability insurance, which pays out money to the other driver when you’re found at fault, is legally required in most states.

The amount of insurance you need depends on the law in the state you live in as well as your own risk tolerance level, but since even minor auto accidents can be very costly and most of us can’t afford to pay thousands of dollars out of pocket, auto insurance is a necessity.

Unfortunately, auto insurance can be more expensive for new drivers — but again, take heart. There are still ways to ensure you get the best possible rate.

Factors That Affect Car Insurance Price


Car insurance prices are affected by far more than just a driver’s experience level, though that’s certainly an important part of the equation. Here are some other factors that insurers will take into account while drawing up your quote:

•  Driver’s age

•  Driver’s gender

•  Driver’s marital status

•  Driver’s history of accidents and damage

•  Driver’s credit score

•  The primary location the vehicle is kept and driven in

•  The vehicle’s make, model and age

Although there are some general rules that hold true — for instance, that people with lower credit scores or worse driving records end up with higher premiums — the way some of these factors are used is less than transparent.

For example, a 2021 study by The Zebra found that women actually pay higher insurance costs than men on average in many parts of America, despite the Insurance Information Institute’s claim that women tend to have fewer accidents than men and therefore pay less for insurance.

In short, there’s no easy way to predict what your rates will look like without getting a custom quote — but it’s true that newer drivers tend to face higher insurance premiums. Which does make sense: after all, the insurance company is trying to hedge its bets that you won’t get in an accident (and therefore need an expensive claim paid out), and they don’t have a driving record to rely on while they make their best guesses.

Recommended: Auto Insurance Terms, Explained

Who’s Considered a New Driver?


Although the classic image of a new driver might be an eager teenager with their brand-new license and mom’s hand-me-down car, there are other people who fit the description, too. Drivers considered “new” include:

•  Teenagers with new driver’s licenses

•  Adults without a driving record

•  People with a gap in their driving history or car insurance coverage

•  Immigrants to the United States, whose driving records might not transfer over from their country of origin

Being a new driver doesn’t change how much insurance you’re required to purchase by state law. As mentioned, though, it can affect your price — so let’s take a closer look into solutions for each category.

Car Insurance for Teens


Teens — or, in many cases, teens’ parents — face some of the highest insurance costs out there because, let’s face it: youthful abandon and lack of experience can lead to accidents. There are some moves you can make to minimize the costs, however, including:

•  Staying on a parent’s policy: For starters, staying on a parent’s policy as long as they’re living under the same roof can keep costs relatively low for teenage drivers … but parents should still expect their policy cost to double.

•  Looking for discounts for good grades or defensive driving classes: Teens may also be able to score good student discounts by maintaining above-average grades in school, or get a discount if they attend and complete an approved defensive driving class.

•  Maintaining a good driving record: For all drivers, maintaining an accident-free driving history goes a long way toward lowering insurance costs over time. Of course, practicing care and vigilance on the road is always of paramount importance … but given how high the cost of teenagers’ insurance policies can be, there’s even more incentive.

Car Insurance for People Who Moved to the U.S.


Even if you have a robust driving history in your home country, if you immigrate to the United States, it’s unlikely to transfer over — which means you could face elevated insurance prices for the first few years you’re a U.S. driver.

Furthermore, the first step to attaining U.S. car insurance in most states is to acquire a U.S. driver’s license, which on its own can be difficult without the proper paperwork. However, certain states do offer driving privileges to unauthorized immigrants. You may need to provide documentation, such as a foreign passport or birth certificate, and the resultant license is not valid as federal identification.

Once you’re ready to shop for car insurance, we recommend obtaining several quotes to see which company can accommodate you with the coverages you need for the least amount of money.

Car Insurance for Adults Without a Driving Record


Maybe your teenage days are far off in the rearview mirror, but it’s been a long time since you’ve driven — or you’ve never driven at all.

Without a solid, recent driving history, car insurance companies will still consider you a new driver, which can push costs up. So can having a gap in car insurance coverage. (There may be exceptions to this rule if your driving gap was due to military deployment status, so be sure to run that information by your prospective insurer.)

Again, shopping around for the best quote and maintaining as clean a driving record as possible going forward will help your case considerably. If you’re confident in your driving ability and you’ve built up the savings to afford it if an accident does occur, choosing a higher deductible could also help you save money on monthly premiums.

3 Ways to Save on Car Insurance for New Drivers


Along with the tips we’ve included in the sections above, there are some universal tips that can help most new drivers — and, in fact, most drivers, period — lower their car insurance costs.

Choose Your Car Wisely


Certain cars are more expensive to insure than others — including flashy models that are likely to get stolen (or tempt their drivers into three-digit speeds). You can find lists of the cheapest cars to insure online, but generally speaking, slightly older, more modest vehicles are the least expensive to keep insured.

Improve Your Credit History


It’s really incredible how many parts of our lives credit history touches — and car insurance is no exception. While your quote is drawn up based on many factors, as mentioned above, your credit history is definitely part of it. Besides, maintaining good credit behavior is highly likely to help you elsewhere, too.

Bundle Up


Many insurance companies offer discounts to people who “bundle” coverage or purchase more than one type of insurance from the same company. So if you’re required to have renter’s insurance or have home insurance, see if buying them all from the same provider might save you some dough.

The Takeaway


Although new drivers do face higher car insurance costs, they can still find the very best deal available to them by shopping around. Better yet, these days, that doesn’t have to mean making five different phone calls. Auto insurance comparison tools, such as the one from SoFi and Gabi, make it easy to compare car insurance rates at a glance — and to seal the deal and get yourself ready to hit the road.

Photo credit: iStock/SolStock


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
.

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.
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 or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.

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