The Top Home Improvements to Increase Your Home’s Value

Thinking about installing a new deck, replacing a front door, or even adding an entire master bedroom to your home to help increase its resale value? Considering that your home is one of the biggest investments you’re likely to ever make, it makes sense that you’d be interested in increasing its value through remodeling.

This is especially true if you have plans to eventually sell your home, whether immediately or further into the future. But as you probably guessed, not all remodeling projects are created equal when it comes to their anticipated return on investment (ROI).

There’s no perfect formula for increasing your home’s value through remodeling. However, you can make an effort to choose financially beneficial projects if your primary concern is getting the best return on your investment.

Using Remodeling Magazine’s Cost vs. Value 2020 report , which compares the average cost of 22 remodeling projects in 101 housing markets, we’ll cover some of the most popular home improvements, based on estimated ROI. And we’ll include a breakdown of the estimated time and costs involved in each project.

For additional information on remodeling project ROI, use this to get an idea of what value each project could add to your home.

Things to Consider Before Starting a Home Improvement Project

Before diving in, it’s important to understand that the decision to remodel requires more consideration than relying on what national averages for remodeling ROI tell us. For one, both costs and preferences for amenities and styles vary by geographic location.

You might also want to consider hiring a general contractor, real estate agent, or an appraiser to come to your house and give an opinion on what remodels could provide the most value for your money spent.

But for most people just figuring out the average ROI isn’t the only consideration. Many folks remodel their homes because they want to upgrade or add a specific feature or amenity for their own immediate needs, with the hope that it will increase a home’s value in the long run.

If this is the case for you, you’ll want to consider the trade-off between what you want and need, how much you are willing to spend, and what the potential ROI could be.

For example, if you really need to add an additional bathroom, it could be worth the cost even though the Cost vs. Value report we’re using to estimate ROI for this article says that you’ll only recoup 54% of your expenses for your project.

Top Home Improvement Projects to Help Increase Your Home Value

Garage Door Replacement

Average Cost: $3,695

Costs Recouped: 94.5%

General Time Commitment: A few days

Removing an old garage door and replacing it with an attractive, sturdy new one could return nearly every dollar of your initial investment, according to the Cost vs. Value report. It’s an effective way to improve your home’s appearance from the outside while increasing your home’s functionality for years to come.

With an average cost of $3,695, which includes the door and the cost of labor, it’s also a relatively affordable renovation. While most folks would likely hire someone to help install the new garage door, it is something that you could potentially do on your own (with the help of a friend).

This would be a project you could do in a weekend. If you hire someone to install the door for you, they will likely come to your home twice: First, to take measurements and give you a quote, and then again to install the door.

Manufactured Stone Veneer

Average Cost: $9,357

Cost Recouped: 95.6%

General Time Commitment: One month

Removing the vinyl siding and adding a stone veneer to the bottom third of your home’s street-facing façade is an effective way to help increase the value of your home, returning 95.6% of the cost of renovation. First impressions matter when it comes to selling a home, and stone veneer is a popular look right now.

Whether you tackle this project yourself or hire a handyperson to help with the installation, this project will take several days to complete. If you hire someone, understand that the construction days might not be successive, so the exterior of your home could be under construction for several weeks to a month.

Minor Kitchen Remodel

Average Cost: $23,452

Cost Recouped: 77.6%

General Time Commitment: Four to eight months

Whereas the Cost vs. Value study reports that major kitchen remodels ($68,490-$135,547) recoup only 58.6%-53.9% of costs ($40,127-$72,993), a smaller remodel appears to do a better job at retaining the value of the dollars put into the project.

A minor remodel includes things like replacing cabinet fronts with new shaker-style wood panels and drawer fronts, replacing the cooktop, oven range, and refrigerator with new models, replacing the countertops and floors, and installing a new sink and faucet. To stay on budget, consider using mid-priced appliances.

It would be very difficult to make it through a kitchen remodel without the help of experts, such as electricians, plumbers, and contractors, so you may have to put some extra effort into coordinating. You’ll also want to be realistic about how long you can devote to the project — and be without a working kitchen. Expect several months at minimum for a kitchen remodel.

Wood Deck Addition

Average Cost: $14,360

Cost Recouped: 72.1%

General Time Commitment: Three to six months

Nothing beats enjoying family and friends on a deck in your backyard on a sunny day. Potential buyers are typically rightfully happy to pay extra for a deck, and a wooden deck installation could recoup 72.1% of what you spend.

Ideally, you’ll also get the chance to enjoy the deck before you sell your home.

Understandably, a deck installation is a pretty large project, by both dollar cost and the cost of effort. You’ll likely want to hire the help of a designer or architect to map out an initial plan, and a contractor to do the building work.

You can attempt to do the project yourself, but be certain that you know how to build a deck that will pass an inspection and adhere to your city’s building codes. In considering whether this is a good investment, remember that building a deck may increase your property taxes and home insurance.

Check out this Home Improvement Cost Calculator to find out an estimate on how much each renovation project could cost.

Entry Door Replacement (steel)

Average Cost: $1,881

Cost Recouped: 68.8%

General Time Commitment: One week

A new, safe front entry door is an attractive quality to prospective homebuyers. Replacing your entry door and jambs with a steel door, “including clear dual-pane half-glass panel, jambs, and aluminum threshold with composite stop,” should get you a good bang for your buck, according to the Cost vs. Value report.

Of all the projects covered by the Cost vs. Value report, this one should take the least amount of time and effort. You can do it yourself (preferably with an extra set of hands) or hire an installation expert. If you go this route, you can have them come to your home to do the initial measurements and return for the installation, or you can measure and order the door yourself, and just get help with installation.

Remodeling Projects With the Lowest Potential ROI

Master Bedroom or Bathroom Addition

Average Cost: $136,739 for midrange, $282,062 for upscale

Cost Recouped: 58.5% for midrange, and 51.6% for upscale

General Time Commitment: Four to eight months

The Cost vs. Value report considers master bathroom and bedroom additions in both midrange and upscale homes, and neither returns much more than half of the initial investment. While not a great return, a home addition project of this size does offer a larger overall change to the value of your home.

For example, a $300,000 home that adds a master suite for $136,739 could potentially return about $80,000 on the investment. A home that sells for $380,000 instead of $300,000 is a 26% increase in the home’s value. If you were to get enough use from the addition to justify the other cost you can’t recoup, it could still be a fine investment.

Again, these figures are purely hypothetical, and the value of expanding your home can depend on a multitude of factors.

Bathroom Addition

Average Cost: $49,598 for midrange, $91,287 for upscale

Cost Recouped: 54% for midrange, 54.7% for upscale

General Time Commitment: Four to eight months

A regular bathroom remodel is not as costly as a master bathroom addition, and it boasts a slightly better potential ROI. Again, a bathroom addition or any large remodeling project should be considered in terms of both ROI and what you want to get out of your home while you are living in it.

And that’s a calculation that only you and your family can make — consider your potential usage and whether it makes the difference between staying and having to relocate to a larger home, which would also come with its own set of costs.

Making it Happen

As you can tell, determining the best home improvements for your personal situation usually requires more consideration than simply looking at current home remodeling ROI trends, though ROI numbers can definitely help inform your decision.

You also have to consider what you need and want out of your current home, and whether both the relative and absolute cost of taking on a big project is worth it.

Your time and personal efforts should be considered as well. In an ideal world, you’d settle on a project that will allow you to maximize the enjoyment you get out of your home while also adding ROI value.

Ready to go on a remodeling project for your home? With SoFi’s Home Improvement Loans, you could make your home improvement dream a reality.

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Unexpected Wedding Expenses to Watch Out For

You’ve champagne-toasted to your engagement (a few times, because it only happens once, right?). After basking in the post-engagement bliss, you’re deep into the latest table decor trends on Pinterest.

It’s easy to get lost in the excitement of your wedding and just focus on the fun parts, like trying on dresses or sampling cakes. But before you get too far into planning, it may be worth stepping back and crunching some numbers.

In addition to being a life milestone and a joyous occasion, a wedding can also be a significant expense.

While the price tag can vary widely depending on the level of luxury you go for and where you live, the average wedding cost $38,700 in 2019.

You probably know about the basics you’ll likely have to cover, such as the dress, venue, catering, rings, and cake. But there are also tons of unexpected wedding costs, both small and large, you may run into—and they can really add up.

Being aware of the lesser-known expenditures you may encounter can help you plan ahead when it comes to financing your big day. Whether you’re paying for your own wedding, or getting help from loved ones, having a realistic budget can help ensure that your wedding doesn’t wreak havoc on your finances.

1. Bachelor and Bachelorette Parties

Since these events happen in advance of the wedding itself, it’s easy to exclude them from your initial budget. But planning for these festivities is crucial, since they can come with a hefty price tag.

Guests spend an average of $537 on these parties, according to The Knot. When it’s a three-day weekend getaway, the cost can go up to even further. According to Upgraded Points , the average cost of a bachelorette weekend in New York City (the most expensive city according to their research) was just over $1,900.

Sometimes the host and guests will opt to cover the cost of accommodations and activities for the bride and groom, but that’s far from guaranteed.

And even if your costs are partially covered, you may still need to chip in for your airfare, meals, and incidentals.

2. Marriage License

In the whirlwind of wedding planning, it can be easy to forget the actual purpose—getting legally married!

That requires you to apply for a marriage license, typically with the relevant county clerk’s office. Some states have a fixed fee, while others vary by county or city. The fees can range from $10 to $115.

3. Insurance

You probably know that you’ll need to pay for a venue, but you may not be aware that many require you to also purchase insurance. These policies typically cover damage to the venue or injuries to guests or vendors.

Sometimes they reimburse you if something goes wrong, such as a venue becoming unavailable or a vendor not showing up. Wedding insurance usually costs $200-$550 for basic coverage but can cost more for more expensive events.

4. Postage

If you’re sending paper cards to your guests, don’t forget that you’ll need stamps, too. These can add up when you consider that you may need them for Save the Date cards, invitations, RSVP envelopes, and Thank You cards.

And postage for guests based abroad is even more expensive. As of 2019 , a postcard stamp costs $0.35, and a First-Class Mail letter costs $0.55. Let’s say your Save the Date is a postcard and the rest use envelopes, mailing the above cards to 150 guests in the U.S. would cost anywhere from $100-$200 or more.

5. Alterations

Many brides and grooms forget that attaining the perfect wedding-day outfit will likely require not only shelling out for a dress and suit, but also paying for alterations.

Some stores and custom tailors include the cost of alterations in the price of the garment, but others don’t. With dresses, changes such as hemming the gown, adding lace or beading, or taking it in can cost anywhere from $50 to $700 or more.

6. Beauty Treatments

You’ll want to look your best on your big day, and that likely requires spending some cash. Hair and makeup for brides costs $150 on average, and many stylists charge extra for a trial. If you’re paying for your bridesmaids to get hair and makeup done as well, the cost could also be around $150 for both services on average.

Brides may also choose other beauty treatments, such as facials (average cost of $65), manicures and pedicures (average cost of $63), and tanning (average cost of $39). Body art, like mehendi for Indian brides, can cost $75 on average. The groom may also choose to pay for services like a haircut and professional shave.

7. Gifts

You are probably expecting to receive gifts from your guests, but don’t forget that you may want to give some out, too.

It’s customary to give thoughtful thank you gifts to your wedding party, with especially nice presents going to the maid of honor and best man.

You may also want to give tokens of appreciation to your parents and grandparents, especially if they helped pay for the wedding. If you have friends who helped out a lot, perhaps by writing your escort cards or serving as an officiant, you may want to thank them with a gift as well. And any children that are participating in your day, such as a flower girl or ring bearer.

Last but not least, it can be meaningful to exchange gifts with your new husband or wife. By including these significant items in your budget, you can make sure you can afford them when the time comes.

8. Wedding Weekend Events

Your initial wedding budget may not have included other events you’re hosting, such as the rehearsal dinner, welcome drinks, or a brunch.

Depending on the number of guests, all of these events can cost a pretty penny. The average cost of a rehearsal dinner is around $1,330 , while brunches can start at $20 per person!

9. Lodging and Transportation

You’ll probably be paying for a hotel for one or more nights if your wedding isn’t in your hometown, or if you just want to stay somewhere special.

You also may not want to drive yourselves around on the big day. If that’s the case, factor in the cost of a limo, bus, or rideshare service to get you to and from the photo, rehearsal, and wedding locations. If you’re providing transportation for guests as well, expect this number to go up significantly.

10. Rentals

More likely than not, your wedding venue and caterer won’t provide everything you need. You’ll likely need to pay extra to rent linens, flatware, and glassware. You may also want to rent other items, such as a heating lamp, cake stand, string lights, candles, or a photobooth.

Financing Your Wedding

So how do you afford all those wedding expenses—the ones you plan for and the hidden ones that crop up? Here are some ideas for financing your dream wedding:

Budgeting and Saving

The first order of business is often to make a budget. Add up all the anticipated wedding expenses, including the lesser-known charges above. Then, you and your betrothed can track your monthly expenses and income and see how much you have left over to save each month.

If it’s not enough to get to your goal, see if you can find ways to reduce expenses or earn extra cash. SoFi Relay, a complementary tool for SoFi members, can help you track your spending and cashflow in real time against a set budget, to help prevent you from going over—and help you save for the big day.

Trimming Expenses

If your wedding budget is more than you can afford, you may be able to find ways to reduce some of the costs. Perhaps a friend can officiate instead of paying a professional.

Maybe your friends can help you create DIY paper goods, bouquets, and centerpieces. Or what if you sent digital Save the Dates and invitations, rather than paying for printing and postage? Some couples even self-cater their weddings.

Personal Loans

If you aren’t able to save up enough in advance, a personal loan could help finance your wedding, whether you’re having a traditional ceremony or a destination wedding. With SoFi, eligible borrowers may qualify for loans with interest rates that are generally lower than the interest rates charged by credit cards.

There are few spending restrictions when it comes to personal loans, so borrowers can use them for any wedding expenses that come up, and don’t have to put any assets down as collateral.

With SoFi personal loans, you don’t pay any fees for applying or for paying it back early. If you happen to get laid off, you may also be eligible for Unemployment Protection: payments could be temporarily suspended for up to one year, while SoFi would provide assistance with finding a new job for qualified borrowers. It takes just a few minutes to apply online.

Learn more about using a SoFi personal loan to help you finance your dream wedding—including any surprise expenses.

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.
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How to Budget for a Baby

Having a baby can fill your house with love. It also can take a toll on your finances.

So while you’re obsessing about pink, blue, or both, try not to forget about the green. Just getting ready for that new little bit can mean a big budget hit. And like your baby, you can expect the costs will keep growing.

That means you’ll have to reconfigure your household budget more than a few times through the years—and it might be a good time to start planning for those modifications right now.

It might seem a little challenging (and boring) to work on a baby budget when you have so many other fun things to think about.

But if you break down the process and do a little at a time, it can make the task less daunting.

If you already have a budget in place, you have a head start. If not, you can begin by gathering your financial information—what comes in and what goes out.

Assessing Your Income

Look at your household income after taxes and other deductions come out of your paycheck each month. That’s the money you’ll actually have to work with, not the gross amount. Also, if one parent plans to stay home with the baby full- or part-time—or if your income already fluctuates from check to check, plan accordingly.

You might be willing to do without new clothes and other indulgences in leaner times, but your baby will always need diapers. Be sure to consider the loss of any non-cash forms of employee compensation, such as insurance and retirement contributions.

Looking at Your Current Expenses

Some things won’t change at all, but there may be costs that will go down or go away after you have the baby. For example, the amount you spend on movies, dinners out, and travel might be reduced for a while.

If one parent decides to stop working, the wardrobe budget might drop. But you’ll also be adding expenses. This is a good time to identify your priorities and be prepared to make some trade-offs . Can you live without Netflix, Starbucks, and the latest iPhone update?

Planning Ahead For Recurring New Expenses

Child Care

Typically, child care is the biggest ongoing expense a family will have with a new baby. The cost will vary depending on where you live, the type of care you choose, and whether you need part- or full-time care, but according to’s 2018 Cost of Care Survey , one in three families now spend 20% or more of their annual household income on child care.

The survey found national averages ranged from $211 per week for a full-time slot at a child-care center to $580 for a full-time nanny. (You can learn more about the costs in your area by contacting the nearest Child Care Resource & Referral agency.

Or check out the difference in price when hiring a nanny, sharing a nanny or going with a day-care center with’s Cost of Child Care Calculator .)


Even if you plan to nurse the baby, you’ll need to prepare for the possibility that breastfeeding might not work out and formula could be a regular expense. Powdered formula can cost from $70 to $150 per month .

When your baby starts on solid foods, typically at about 4 to 6 months old, you could be looking at a cost of $50 to $100 a month .


The average baby uses 2,500 to 3,000 diapers in the first year, which could add up to more than $1,000 a year in diapers and wipes.

House and Car

Maybe you’re lucky enough to already have an extra room in your home that’s ready to be transformed into a nursery. And maybe a baby car seat will fit into your current ride without a struggle.

But if that’s not the case, and you have to make some adjustments for your growing family, you may have to add more expensive house or car payments to your get-ready-for-baby budget.

Miscellaneous Expenses

Even newborns have toys and books. And then there are the pacifiers, the tiny outfits and socks, the lotions and creams, the Mommy and Me classes, etc. This is where you can prioritize.

If you don’t mind hand-me-downs, clothing could be a place to cut costs. (Unfortunately, you probably can’t count on your shower guests to provide everything you’ll need.).

Preparing for Some Upfront Costs

Depending on your insurance coverage, you could be going home from the hospital with a bundle of joy and a bundle of bills. Check your health insurance plan ASAP to gauge what your costs could be.

The amount of your hospital bill will depend on a lot of factors, including the part of the country in which you live, the size and location of the hospital, the length of your stay, and how much extra care you or your baby might require.

You also may need some starter equipment—a crib, changing table, dresser, car seat, stroller, gates and other safety equipment, and you may want a baby monitor and even a nanny cam.

Smaller ticket items include a diaper bag and Diaper Genie, a baby bathtub, bedding, and towels. Here’s another place where hand-me-downs and resale shops can help you save.

Ready, Set, Transition

Remember those expenses you thought about prioritizing in step 2? You don’t actually have to wait until the baby arrives to make changes. You might want to practice by giving your new budget a test run before your delivery date.

To take it a step further, if one parent plans to quit working, even for a short while, you could start living on just one salary a few months early and put the extra income into an emergency fund. That money could come in handy later if unexpected expenses crop up. (And you know they will crop up.)

Overwhelmed? Take Baby Steps

Preparing for a new baby, especially your first, can be exciting. It also can be a little overwhelming.

Doing a few breathing exercises could help as you’re working on your budget for the new baby. Start now with baby steps (see what we did there?), and you could be on pace long before your little one arrives.

As you grow your family, grow your financial stability. With SoFi Money® you can spend, save, and earn all in one product. SoFi Money is a cash management account that has no account fees, and you’ll pay no ATM fees at 55,000+ ATMs worldwide within the Allpoint® network. We work hard to charge zero account fees. With that in mind, our fee structure is subject to change at any time.

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Understanding the Different Types of Mortgage Loans

Homeownership can be both rewarding and a great financial decision for your future. But as anyone who has dipped their toes into the home-buying process knows, the pressure to find and secure the “right” mortgage loan can feel overwhelming, especially if you’re a first-time home buyer.

During the early stages of the home-buying process—perhaps while you’re researching neighborhoods and schools, shopping around for properties, and assessing your budget through a home affordability calculator—it would serve you well to do some research into the types of mortgages available. That way, you’ll feel prepared when the time comes to put down an offer on the perfect home.

The process of applying for a mortgage loan can be complicated, and one of the first steps for a homebuyer is to decide which type of loan will best serve his or her needs.

Some mortgage applicants are first-time homebuyers, seeking to buy a home as a primary residence, while others are seasoned residential homebuyers, with experience purchasing homes primarily for investment purposes in the form of rent revenue and asset appreciation.

As you’ve likely noticed, there are quite a few mortgage loan types available to borrowers. Brace yourself, because the process definitely requires you harness your best inner comparison shopper.

You’ll need to consider the ins and outs of each option alongside your personal and financial needs. To help make the decision a bit easier, we’ve compared the advantages and disadvantages of each mortgage type below.

Fixed Rate Loans vs. Adjustable Rate Loans

Fixed rate mortgage loans are exactly what they sound like: the interest rate is fixed for the entire life of the loan, locking a borrower into a set interest rate. The length of fixed rate loans can vary, but two of the most common time frames are 15 and 30 years.

A 30-year fixed-rate loan is the most common, though you can save a lot in interest if you opt for a 15-year loan. Monthly payments on a 15-year loan will be much higher than for a 30-year mortgage, so it’s probably wise to commit only if you’re confident that it works in your budget—even in the event of a financial emergency.

Quick Tip: Check out our Mortgage Calculator to get a basic estimate of your monthly payment

One advantage of this type of loan is that the monthly payment is fixed for the entire term, which can make budgeting predictable and therefore easier. However, one downside is that if you take out a loan when interest rates are high, you’re locked into that higher rate for the entire term of the loan—unless you refinance.

If you have a high fixed rate mortgage loan in a low interest rate environment, you may be able to refinance your mortgage when interest rates drop. Of course, there is no guarantee you will qualify to refinance in the future, nor that rates will necessarily drop or stay low.

Adjustable rate mortgage (ARM) loans have an interest rate that changes throughout the life of the loan as interest rates fluctuate. ARMs generally have an initial fixed-rate period of between 5 and 10 years, during which the interest rate is fixed.

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

ARMs are often expressed in two numbers (like 5/1 or 2/28), although those numbers don’t follow one particular formula (they could represent years, months, number of annual payments, etc.). For example, a 5/1 ARM has five years of fixed payments and one adjustment to the interest rate in each year thereafter.

After the fixed-rate period of an ARM, the interest rate switches to variable. The variable rate is typically set based on a benchmark index rate that varies based on market conditions. During the fixed-rate period, the interest rate is usually lower than the interest rate on a traditional fixed-rate loan.

It’s easy to be drawn to the lower initial rate offered on an ARM, but it very well could end up costing more in interest than a fixed-rate loan over the lifespan of your mortgage. An ARM might work best for someone who plans to pay off their mortgage in five years or less, or is committed to refinancing prior to the ARM’s rate increase.

Rate increases in the future could be dramatic, although there are limits to the annual and life-of-loan adjustments, typically leaving adjustable-rate mortgage-holders with much higher monthly payments than if they had committed to a fixed-rate mortgage.

Deciding to go with an ARM or fixed rate mortgage may be a different process for every homebuyer, so be sure to consider your personal situation along into your research.

Conventional Loans vs. Government Insured Loans

A conventional loan is a mortgage loan originated by a bank or private lender, and is not backed or insured by the government. Banks and lenders typically look at credit scores and debt-to-income ratio, among other factors which will vary by lender, in evaluating conventional loan applications. Down payments (up-front cash) are usually required when taking out a conventional mortgage.

Conventional mortgage loans are one of the most popular types of mortgage used today. Conventional loans may have stricter requirements than government-backed home loans, which can make them slightly more difficult to qualify for than a government-backed loan. However, some borrowers may obtain conventional loans for a second home or investment property because most government-backed mortgages can only be used to purchase primary residences.

Minimum down payments for conventional mortgage loans are typically around 5%, but many borrowers choose to pay more in cash up-front in order to decrease the size of the remaining mortgage. Conventional fixed-rate mortgage loans typically require a minimum of a 620 FICO® credit score and a down payment between 5% and 20% (first-time homebuyers may be able to put down as little as 3% .

If you put less than 20% down, however, private mortgage insurance is required—but you have options. PMI can be paid monthly or can be an upfront premium that can be paid by you or the lender. Monthly PMI needs to stay in place until your loan-to-value ratio reaches 78%. (The loan-to-value ratio is the amount of the mortgage you are applying for relative to the appraised value of the home. The more money you put down, the lower your loan-to-value ratio is, and vice-versa.)

Pros: A variety of property types would qualify for a conventional mortgage. Private mortgage insurance can make it possible for borrowers to qualify for a conventional loan if they choose to put a down payment of less than 20%.

Cons: Conventional loans tend to have stricter requirements for qualification and may require a higher down payment than government loans.

For home buyers looking for more flexible lending standards, government-backed loans such as Federal Housing Administration (FHA) loans and Department of Veterans Affairs (VA) loans for veterans can be appealing options.

Federal Housing Authority (FHA) Loans

FHA loans are not directly issued from the government; certain lenders can issue FHA loans on behalf of the government and the Federal Housing Administration insures the loans. With flexible lending standards, qualifying for an FHA loan is often less difficult than qualifying for a conventional mortgage.

As such, FHA mortgages can be a great choice for people with less than stellar credit scores or a high debt-to-income ratio. With at least a 580 FICO® credit score, you might qualify with a a 3.5% down payment . For more important details, check out the FHA’s lending limits in your state. Generally, FHA mortgages come with an additional insurance charge called a “mortgage insurance premium.”

conforming loan limit

Pros: Because FHA loans are ubiquitous and have lower down payment and credit score requirements, they are one of the most accessible mortgage loans. FHA loans give potential homeowners a chance to buy without a big down payment. Additionally, FHA loans allow a non-occupant co-signer (as long as they’re a relative) to help borrowers qualify.

Cons: Historically, the requirements for FHA mortgage insurance have varied over the years. Currently, an FHA loan requires both an up-front mortgage insurance premium (which can be financed into your loan amount) and monthly mortgage insurance. The monthly mortgage insurance generally stays in place until the loan-to-value ratio reaches 78%.

VA Loans

The U.S. Department of Veteran Affairs provides loan services to members and veterans of the U.S. military and their families. If you are eligible , you could qualify for a home loan that requires no down payment or monthly mortgage insurance.

VA mortgages are designed to help veterans purchase homes with no down payment. VA loans are provided by banks and private lenders. Similar to FHA loans, the government doesn’t directly issue these loans, instead they are processed by banks or private lenders and guaranteed by the VA.

While VA loans are attractive because they typically require no down payment, they don’t have a maximum limit, depending on eligibility. Veterans, active-duty service members, and surviving spouses are eligible for VA mortgage loans.

Pros: You don’t have to put any money down or deal with monthly PMI payments, which could save borrowers thousands per year.
Cons: These loans are great to get people in homes, but are only available to veterans.

FHA 203k Rehab Loans

FHA 203k loans are home renovation loans for “fixer-upper” properties, helping homeowners finance both the purchase of a house and the cost of its rehabilitation through a single mortgage. Current homeowners can also qualify for an FHA 203k loan to finance the rehabilitation of their existing home.

Many of the rules that make an FHA loan relatively convenient for lower-income borrowers apply here, such as requiring just 3.5% down. An FHA 203k loan does not require the space to be currently livable and it has credit score requirements similar to regular FHA loans, however some lenders may require a minimum credit score of 620 to qualify.

Many types of renovations can be covered under an FHA 203k loan: structural repairs or alterations, modernization, elimination of health and safety hazards, replacing roofs and floors, and making energy conservation improvements, to name a few.

Pros: They can be used to buy a home and fund renovations on a property that wouldn’t qualify for a regular FHA loan. And they only require a 3.5% down payment.

Cons: These loans require you to qualify for the value of the property plus the costs of any planned renovations.

Conforming Loans vs. Non-Conforming Loans

Both conforming and non-conforming mortgages are types of conventional mortgages. A conforming loan meets certain guidelines established by the Federal Housing Finance Agency (FHFA) and Fannie Mae and Freddie Mac, but they are not insured by the government. The amount a buyer can borrow is limited, and that limit changes annually, based on federal guidelines.

As of 2020, the conforming loan limit is $510,400 in most of the U.S. and goes up to $765,600 in certain higher-cost areas, and is adjusted annually. Conforming loans offer better interest rates and lower fees than non-conforming loans.

Pros: Conforming loans may have lower interest rates and fees than non-conforming loans.

Cons: Limits on the amount that can be borrowed.

Non-conforming loans are loans that fall above the conforming loan limit set by the FHFA. There are several different types of non-conforming loans. The most common is a jumbo loan.

Jumbo Loans

A jumbo loan is a loan that exceeds the conforming loan limit. Due to the size of the loan, the requirements to qualify are more stringent. Most jumbo loans require a minimum FICO® credit score above 700 or 720 and a down payment of 10%, although specific requirements will generally vary by lender.

Interest rates can also be higher for jumbo loans because they are considered more risky to the lender. Other types of non-conforming loans exist for borrowers with credit scores on the lower end, or borrowers with a high debt-to-income ratio.

Those looking to fund an expensive property purchase will likely have little choice but to use a jumbo loan. If that’s you, it might require taking some time to get your credit score in good shape.

Pros: Jumbo loans can help qualified borrowers purchase expensive properties.

Cons: Qualifying for a jumbo loan may have stricter requirements or additional fees.

Each homebuyer is unique, so taking the time to fully understand the process of selecting the right mortgage for your needs is a critical first step.

Ready to do some comparison shopping? SoFi offers mortgages with competitive rates, a fast and easy application, and no hidden fees.

Ready to do some comparison shopping? SoFi offers mortgages with competitive rates, a fast and easy application, and no hidden fees.

SoFi Home Loans
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SoFi loans are originated by SoFi Lending Corp (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


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4 Ways to Pay for Your Child’s Tuition

If you’re a parent who has always dreamed of sending your child to college someday, you’re probably well aware that tuition costs have increased pretty drastically over the past 20 years.

According to data reported in an annual survey for U.S. News & World Report , the average cost of tuition and fees for the 2019 to 2020 school year was $41,426 at private colleges, $11,260 for state residents at public colleges, and $27,120 for out-of-state students at state schools.

Those are daunting numbers for some—and yet university enrollment is expected to continue rising through the next decade, which means it’s unlikely U.S. tuition prices will go down.

So what can you do now to prepare for this looming expense? Here are a few ways you can help your child pay for college:

Tips for Paying Your Child’s College Tuition

1. Starting Early With a Savings Plan

You can go with something as simple as a savings account to which both you and your child can contribute regularly. Or you could open a tax-advantaged 529 savings plan and invest that money.

Much like a Roth IRA, 529 plan contributions are post-tax (although some states do offer income tax deductions or tax credits for contributions); but when you withdraw the money and use it for qualified education expenses for a designated beneficiary, the earnings are tax-free.

Because it’s tied to the market, a 529 plan does come with some risk, so you may want to discuss this option with a tax professional and/or financial planner. They can also answer any additional questions you may have about the different types of 529 plans that are available.

A Coverdell Education Savings Account is another tax-advantaged investment account worth exploring. Like the 529 plan, the money in the account grows tax-deferred, and when it’s used for qualifying expenses, it can be withdrawn tax-free. Unlike the 529, however, there are income limitations for a Coverdell account.

2. Look for Ways to Get Free Money

The resources are out there, you just have to know where to find them. One good idea is to begin by filling out the Free Application for Federal Student Aid (FAFSA®) together with your child.

Or, if you aren’t quite there yet, you may be interested in checking out the FAFSA4caster to get a free early look at your child’s eligibility for federal aid, including an estimated Federal Pell Grant amount (if any) and Federal Work-Study amount (based on the average nationally).

It’s generally recommended that parents and their children investigate the many types of scholarships available. Scholarships aren’t just for athletes and academic stars; there are acting, dancing, and other area-of-interest scholarships; civic scholarships; scholarships for those with certain diseases and disabilities—even fly-fishing scholarships.

Your child also can check out the high school guidance department for any information, and you may want to make an appointment with a school counselor to get any tips that might help your search.

If your son or daughter already has a college selected, funding information is usually available on that school’s website, as well.

3. Encourage Your Child to Get a Manageable Job

You and your buddies who had jobs in college could probably debate for hours the pros and cons of asking kids to work their way through college.

Yes, it’s a time suck, but it can help with organizational skills; it can provide a real-world view of what it’s like to juggle employment and other responsibilities; and federal education data show that students who work part-time, up to 12 hours a week, get better grades than those who don’t work at all.

But here’s the true bottom line: Student loan debt is now the second-highest consumer debt category—behind only mortgage debt, and higher on the list than both credit cards and auto loans.

A job won’t pay for everything, but it will pay for some things, and that means fewer costs for you to pick up now or for your child to pick up later.

4. Researching Student Loan Options

With the high cost of getting a degree these days, it’s unlikely you and your child will be able to avoid taking on at least some student loan debt. Taking some time to research all the student loan options out there—federal and private—and how they work could be helpful in understanding which options work best.

The amount a student can borrow in federal loans will depend on his or her year in school, status as dependent or independent, and the type of loan or loans obtained.

Parents of dependent undergraduate students also can apply for Direct PLUS Loans to help pay for education expenses that aren’t covered by other federal financial aid.

Federal student loans usually have more benefits than loans from banks or other private lenders, so be sure to compare the benefits of each private student loan program, as well as the interest rates and the length of the loans available.

For example, federal loans offer deferment and forbearance along with programs like Public Service Loan Forgiveness (PSLF) and multiple income-driven repayment plans when the time comes. Private lenders don’t usually offer such perks and protections.

While researching different options for private student loans, you may encounter different ways for you and your child to apply, such as taking on a private student loan yourself or giving some thought to whether you’re willing to act as a cosigner for a private student loan.

There are, of course, pros and cons to both of those options, so it’s important to do your due diligence on the private lenders you may be considering. What benefits do they offer? What are their rates and terms? Is there any fine print?

If your child doesn’t qualify for enough federal student aid to cover the cost of attending college, private student loans may be a viable option to look into to close the gap.

SoFi offers both private parent student loans and undergraduate student loans to help finance your child’s education. SoFi private student loans have no fees and offer a variety of different repayment options to fit your budget.

Learn more about private parent or undergraduate student loans with SoFi.

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Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (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

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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.


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