Is it Smart to Finance a Wedding?

Is It Smart to Finance a Wedding?

A wedding day is a milestone for many people. It’s a day that’s dreamed about and planned for. It can also be expensive.

The Knot’s annual survey of recently married couples finds that average wedding costs rose each year until 2020 when Covid-19 restrictions put a hold on wedding plans for many couples. In 2019, the average cost of a wedding, not including the engagement ring, was $28,000, but this number dropped to $19,000 in 2020, mainly due to the reduced number of wedding guests and smaller venues. Even the smaller number, though, is still a pretty big one. In the end, though, you want what you want. The question is how to pay for it when the two of you have more love than money?

Here’s what you need to consider.

To Borrow or Not To Borrow

There are many variables that can affect the cost of a wedding, from the time of year you say I do, the day of the week, the number of guests, reception venue, and a host of other things. Not to mention unexpected wedding expenses that are sometimes forgotten in planning, like the cost of beauty and hair treatments and the marriage license, for example.

Temptation can also get the better of you. It’s possible that you will qualify for an amount that’s more than you need for your wedding. Will you have the discipline not to upgrade your plans and spend more than you can realistically afford? It can be easy to get caught up in the fantasy and have regrets later.

The Pros of Financing a Wedding

• You get your day with all the bells and whistles, or most of them anyway, that you’ve dreamed of. You have the wiggle room to have more guests, a highly sought-after DJ or band, and food that will still be talked about on your anniversary. Mission accomplished in having a special day that will last a lifetime of memories.

• You might be able to borrow enough money to have a relaxing honeymoon, too, which might be nice after the stress of wedding planning.

• You won’t deplete your savings to pay for your wedding. Starting your life together without a stash of cash for emergencies can be stressful.

The Cons of Financing a Wedding

• When the revelry is a wonderful but somewhat distant memory, that monthly loan payment is still owed. Depending on the amount and term of the loan, that can be a big commitment.

• Interest rates for personal loans vary based on the borrower’s credit rating and other factors. If you don’t qualify for favorable interest rates, you could end up paying a lot in interest over the life of the loan.

• Taking out a loan also increases your debt-to-income (DTI) ratio and will affect your credit score. If you are planning on near-future large purchases that will require another loan, like a mortgage, having a high DTI ratio might make it more difficult to qualify for future loans, or might affect the rates you qualify for.

Making the Decision

Borrowing money to pay for wedding expenses is a major decision. Being informed of all the details will help you make the best decision for your financial situation.

A wedding loan is a personal loan and is most often unsecured, which means you don’t need to put up collateral to secure the loan. You will, however, need to meet other qualifying factors, such as a certain credit score or employment history, to name a few.

It might be a good idea to get pre-qualified with a few different lenders and review rates and terms you would be likely to get. This step in the process won’t negatively affect your credit score because lenders only do a soft credit inquiry at this point. If you discover that you can only qualify for high interest rates or not the amount of money you need, this might be a good time to consider other options.

Ideally, you want the lowest interest rate you can get. Fixed-rate loans carry the same interest rate throughout the term of the loan, but a variable-interest-rate loan can fluctuate throughout the term, based on changes in the underlying index rate.

There also may be fees to be aware of, such as origination and closing fees, prepayment penalties, and others. It’s helpful to know what all the fees are for and if they are negotiable.

Knowing your total costs and understanding the total interest you will pay over the life of the loan will help you with your decision about whether to borrow. Either a lower interest rate or a shorter term may save money in the long run. A personal loan calculator or amortization table can help with this analysis.

Other Options for Financing a Wedding

If you’re having second thoughts about borrowing to pay for your wedding, you might need to come up with alternatives. With wedding planning, there’s always a Plan B.

• You might be able to avoid borrowing altogether by postponing the wedding to give yourself time to save the money to pay for it. Cutting unnecessary expenses might free up some money in your budget. Or earning extra money by taking on a side hustle might be a good way to add to your savings.

• Using a credit card to pay for wedding expenses might be another option. While a personal loan might offer a lower rate than a credit card, you might find credit card offers with low introductory rates — perhaps even 0% — for a limited time. If you’re confident that you can pay the card off in full before the introductory rate ends, this could be an attractive option. If the card also offers purchase rewards, that could be a further bonus. Remember, though, that credit card debt is still debt, and it’s revolving debt that doesn’t have a fixed end date.

• Asking parents for money might not be the most appealing option, but it might be a worthwhile consideration. Even though the average age of newlywed couples is rising, which might mean more couples are established financially before they marry, it’s still traditional for the parents of the couple to contribute to the cost of the wedding and it’s common for the couple to have help paying for the wedding.

The Takeaway

Your wedding is a special day, but it’s just one day — then comes the rest of your lives together. Using borrowed money to finance your wedding is a big decision and should not be taken lightly. Taking on debt will affect your budget immediately and your borrowing options in the future.

If you do decide that a wedding loan is the right decision for you, consider loans that have no fees, like those from SoFi. Along with no fees, wedding loans from SoFi have low rates, which can save thousands of dollars compared to using a credit card. Unlike the revolving debt of a credit card, a SoFi wedding loan is installment debt with a fixed payment end date.

See if a wedding loan from SoFi will help make your wedding day everything you’ve dreamed of.

Photo credit: iStock/PeopleImages

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

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

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 2021

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 2021?

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 2021 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


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.

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

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

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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27 Tips For Finding The Top Travel Deals

27 Tips For Finding The Top Travel Deals

Planning a great vacation for a price you can afford can be a challenge. And, as more people hit the roadways, railways, and skyways post-pandemic, finding good deals may take a bit more detective work than usual.

But that doesn’t mean you can’t enjoy a fun and affordable getaway with your family, friends, or on your own this year. We’ve got tips and tricks that can help frugal travelers score deals on everything from flights to complete vacation packages.

How to Find the Best Vacation Deals

Here are 27 insider tricks and smart travel hacks that can help keep vacation costs in check.

1. Using Credit Card Rewards

If you’ve racked up a large amount of reward points on your credit card, you may be able to redeem them for free or reduced-price airfare, hotels, car rentals, cruises, dining, and other travel expenses. Some credit cards also offer free trip cancellation insurance, auto rental insurance coverage, and lost luggage insurance.

2. Looking Into Local Destinations

One surefire way to slash vacation costs is to take airfare out of the equation. You might want to consider taking a road trip to some not-too distant destinations. For ideas on where to go and what route to take (along with local deals), you can check out AAA’s TripTik .

3. Going Where the Dollar is Strong

If you travel to a country where the U.S. dollar is strong, your money will go farther than it would at home, or in a country where U.S. currency is weak. Before booking travel, you may want to check out X-Rates’ currency exchange table to find out how the U.S. dollar is stacking up to other currencies.

4. Traveling During “Dead Zones”

There are two times of the year, the so-called “dead zones,” when travel tends to be cheapest: Early December (after the Thanksgiving rush but before the Christmas travel season) and the last three weeks in January into early February.

5. Being Flexible With Your Destination

If price, rather than a place, is the prime concern, you may want to use a destination search engine like Skyscanner. You can plug in your origin and some potential travel dates and then see flight prices for destinations across the country as well as around the world.

6. Getting a Vacation Package

Buying a vacation as a package, rather than booking your flight, hotel, and rental car separately can often yield significant savings. It’s a good idea, however, to keep an eye out for resort fees and airline baggage fees, which aren’t always included in the package price. A few places to find travel packages include Expedia, Priceline, Kayak, and Costco Travel.

Recommended: 10 Tips for the Cheapest Way to Rent a Car

7. Comparing Airbnb and Hotel Prices

Before booking a hotel, you may want to do a quick search on Airbnb and other short-term home rental sites. Even if you’re only staying a few nights, a rental could end up being cheaper than a hotel room. It may also come with a kitchen, which can help you save on dining as well.

Recommended: 25 Things to Know When Renting Out an Airbnb

8. Signing up for Fare Alerts

Rather than checking airfares every day (or every hour) looking for them to come down, you may want to set up a fare alert for one or more destinations and dates at a travel site like Google Flights or Kayak. You’ll receive an email (or notification on an app) when the price of the flight changes.

9. Booking on the Right Day

The day you book your flight typically doesn’t make a huge difference in price. But surveys show that if you’re booking at least three weeks in advance, you may be able to save some money by buying your airfare on a Tuesday. If you’re booking last-minute, however, you may get your best price by snagging your tickets on a Sunday.

10. Not Booking too Far in Advance

The lowest prices on domestic flights are typically available about 45 days in advance of departure. For international flights, you may want to book about 75 days out to get the cheapest flight.

11. Eating Like the Locals

Tourist traps like well-known restaurants can end up being expensive–and crowded. Instead, you may want to chat up some locals and ask for their restaurant recommendations. Another fun–and affordable–option is to hit the farmer’s market, pick up some locally grown or sourced ingredients, and then cook a meal at your rental.

12. Opting to Stay With Friends

Staying with friends can be a great way to save money on vacation. You can end up saving not just on lodging, but also laundry, meals, and transportation with the help of your friends. Of course, you’ll likely want to pitch in and chip in any way that you can to show your appreciation.

13. Paying With a Credit Card Overseas

One easy way to save when you’re vacationing abroad is to use a credit card for most or all of your spending–preferably one that avoids foreign transaction fees. Credit cards typically give you the best exchange rate of the day. Plus, you may be able to rack up rewards, and also get fraud protection.

14. Looking Beyond Tourist Attractions

Just because a destination is known for a certain attraction, doesn’t mean you have to go there. You can often get to know a place just as well, or even better, by going on a free or low-cost walking tour or by checking out the local parks, neighborhoods, and cafes on your own.

15. Checking out Public Transportation

While hopping into an Uber or taxi can be convenient, the cost of these trips can add up quickly. You may want to Google the public transportation options before calling a cab. They may be just as, or even more, convenient.

16. Flying at Odd Times

You can often get a good deal on a flight by going when no one else wants to, such as early mornings and late nights. The cheapest days to fly tend to be Tuesdays, Wednesdays, Saturday (afternoons), Thanksgiving, and the eves and days of Christmas and New Year’s.

17. Contacting the Hotel Directly

Hotel price aggregator websites may not always have the lowest prices. It can be worth contacting the hotel directly and getting a quote. Even if the price listed on a travel site is lower, you may be able to get the hotel to match it. Booking directly could be better because the hotel’s cancellation policy might be more flexible.

18. Using Groupon

Groupon can be a good place to check for deals on hotels and resorts in popular destinations. The site can also be useful for finding discounts on local activities and dining that you can use once you get to your destination.

19. Trying a Travel Auction Site

At travel auction websites, such as , companies will list hotels, flights, or packages, and then travelers can bid on them. It can be a good idea to understand what fees will be additional (and not included in the auction price) before you bid.

20. Checking Into “Senior” Discounts

Even if you’re under 65, you may qualify for a senior discount. Some airlines, hotels, and rental car companies offer discounts to adults age 55 and over, and a few offer senior prices to anyone over 50.

21. Researching Student Discounts

If you’re a student, carrying your student ID and asking if you can get a student discount can pay off. You may also want to check out StudentUniverse, which offers exclusive deals on flights, hotels, and tours to students and adults under age 26.

22. Consider Going on a Cruise

Depending on the cruise line and destination, going on a cruise could end up being cheaper than paying for a flight and hotel accommodation in the Caribbean or other beach destinations. To find deals and current promos you may want to sign up for e-letters from the major cruise lines.

23. Adding Items to the Cart (but not Buying)

Sometimes travelers can snag deals by adding an item to their cart, but not going through with the purchase. This shows the merchant that you’re interested in making a purchase but may need some persuasion to actually go through with it. The merchant may then send you a coupon in order to get you to buy.

24. Signing Up for Loyalty Programs

If you travel frequently, being loyal to one particular airline, hotel chain, or rental car company (and signing up for their loyalty programs) can pay off. You may be able to rack up enough points or miles to get discounts and freebies on future travel.

25. Avoiding Baggage Fees

These days airline tickets often do not include the cost of checking a bag. To keep baggage fees down, you may want to see if you can get away with just a carry-on. Other ways to minimize baggage fees include: signing up for the airline’s loyalty or “frequent flyer” program, getting an airline-branded credit card, and weighing your bags before you leave home (to avoid excess weight charges).

26. Finding a Flight With a Layover

You may be able to visit an additional destination for free, or a minimal additional cost, by booking a flight with a 24 hour-plus layover. A number of international airlines offer a free stopover within their home country when you are en route to another country.

27. Fighting Back Against Resort Fees

Some hotels will tack resort fees onto your bill that you weren’t expecting–and significantly inflate your bill. You may be able to get these fees removed if you are a rewards member with the hotel, or if there were any problems with your stay. To make sure you have time to negotiate, you may want to ask for a copy of your final bill the night before you check out.

The Takeaway

Pent-up demand for travel can make reservations–and deals–a little harder to come by these days.

But by doing a little bit of extra research, signing up for travel alerts, and being flexible on when and where you want to go, you may still be able to score great prices on airfare, hotels, rental cars, cruises, and more.

Ready to start planning–and saving–for your next getaway? With a SoFi Money® cash management account, you can separate your savings from your spending while still earning competitive interest on all your money.

Start saving for your next vacation with SoFi Money.

Photo credit: iStock/onurdongel

SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.


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31 Real Estate Listing Terms Explained

As you read real estate listings, you may come across industry jargon and certain catchphrases again and again. Paying attention to and understanding these terms can provide valuable clues about the home and the seller’s situation.

What follows is a real estate glossary that can help you decipher listings and figure out what a realtor is really saying about a property.

Real Estate Listing Terms Decoded

Real estate has a language all its own. To figure out which homes may be worth looking at, and which might not, you may want to use this handy real estate translator next time you peruse the listings.

1. Cozy

While this descriptor may bring to mind a comfy armchair and a steaming mug of cocoa, in real estate, “cozy” tends to mean “small.” The home may have minimal square footage, meaning each room may have very limited space.

2. Charming

“Charming” is often another code word for a house with a small footprint, and may also indicate an older construction — which may, indeed, be charming, but might also end up needing costly repairs and renovations.

3. Cottage

This is yet another word that sounds like it’s invoking a feeling when it may really be invoking a size — and that size may be on the smaller side. Cottages tend to be one- to two-bedroom houses and, again, might also be dated.

4. Hidden gem

These words might indicate a nice home in an out-of-the-way location or a home in a popular and trendy locale that needs some work. Either way, it can indicate that the property offers a great opportunity for the right buyer, though you may have to put in some work or make some sacrifices.

5. Investor special

That sounds like a good thing, right? But a real estate agent might use this phrase to mean a house is in pretty rough shape and will take significant work to make livable– as in, you may only be able to buy it for cash or with a rehab loan.

6. Fixer

A listing agent may use this term as a shortening of “fixer-upper.” In other words: major renovations are likely going to be needed.
Recommended: The Cost of Buying a Fixer-Upper

7. Good bones

A home with “good bones” is typically one that needs some renovation and repair, but whose original construction is solid and whose layout is desirable. In other words, the skeleton of a great home is there, but you may need to do some work to flesh it out.

8. Move-in ready

Here’s a phrase you want to see in your real estate listings: “Move-in ready” typically means a home doesn’t need any major, mandatory repairs and is ready for you to start living in as soon as you’ve closed on the property. Of course, this term does indicate that the seller probably has a lot of leverage to demand the highest possible offer on the home

9. Turnkey

Basically a synonym for move-in ready–just turn the key and you’re all set to go!

10. Lives large

This indicates that the home may appear small in terms of square footage, but when you are actually in the property and walking around, it feels a lot more spacious.

11. Room to roam

A home with “room to roam” is typically one with a larger-than-average lot with lots of room to create outdoor living/play spaces or grow a garden.

12. As-is

If you see the words “as-is” in a real estate listing, proceed with some caution: This typically indicates that there are repairs or renovations that need to be done that the current owner is washing their hands of and passing off to the buyer.

13. Handyman special

This is another term that can indicate that a property needs a lot of work — thus making it a good opportunity for a handy homeowner, since the house may be priced lower than other, more turnkey, homes in the area.

14. Priced to sell

“Priced to sell” often indicates that the seller is pretty set on the price they’ve offered–you probably won’t be able to negotiate it down too far or get anywhere with a low-ball offer.

15. Serious buyers only

This term is usually meant to keep casual browsers or open-house visitors who are “just-looking” at bay. The seller likely doesn’t want to waste their time with people who aren’t seriously considering making an offer.

16. Custom

While “custom” sounds cool, it may or may not be. This term indicates that the property includes some built-to-order features or additions that appealed to the previous owners. These features, however, may or may not be to your taste.

17. Unique

“Unique” is another word that can go either way. It could be used to describe a lovely, one-of-a-kind feature, like a rooftop patio. Or, it could be used to describe something odd-ball, like a sunroom converted into a photographer’s darkroom.

18. Loft

“Loft” indicates that the home is large, open, and airy, with high ceilings and few interior walls. The bedroom, for instance, may be situated on an open second-floor landing that looks out directly onto the living room below. This may make for a picturesque living situation, but also one with relatively little privacy, so depending on who you live with, take heed.

19. Vintage

You might be able to guess from the name that “vintage,” when it comes to real estate listing terms, is generally code for “really outdated.” Those 1960s appliances might look cute in the pictures… but how much more life do they have in them before they need to be replaced?

20. Rustic

At its best, “rustic” might mean natural wood fixtures and a kind of casual, barn-inspired theme. At its worst, “rustic” might mean old, unprofessionally constructed, or poorly maintained.

21. Modern

Here’s a tricky one. Although you might assume “modern” means that a place is newly constructed and contemporary in style, it can also refer to mid-century modern, an era of architecture and design that took place between the 1930s and 1950s.

22. Great potential

In a similar vein to “good bones” or “hidden gem,” a home with “great potential” is typically one that provides an opportunity for the right buyer — but which likely needs some work to get there.

23. TLC

Short for “tender, loving care,” TLC is yet another term in real estate listings that typically indicates the home in question needs some renovations and repairs before it’s comfortable — or even livable.

24. Well-maintained

This is another term that sounds good on its surface — and might be! However, it can also be a yellow light. “Well-maintained” often indicates that a property has some age on it. (After all, if it’s new, there’s nothing that has needed maintenance yet). An older home isn’t automatically a bad thing, but it does mean you may be faced with upgrades or appliance replacements sooner rather than later.

25. Original details

As with “well-maintained,” “original details” suggests that the home has some older features that you may love, but may also require some maintenance/upgrading in the future.

26. Up-and-coming neighborhood

An up-and-coming location is one that might actively be evolving or drawing new residents. However, it can also indicate that the neighborhood may still contain a fair number of run-down homes and have a way to go before it’s considered a hot housing market.

27. Built-ins

Built-ins are features like bookshelves, benches or cabinets that are permanently built into the home itself, and are fairly common in older construction. Built-ins can be charming and convenient, but can also limit the flexibility you have in arranging and decorating the space as you see fit.

28. Motivated seller

“Motivated seller” may mean almost the opposite of “priced to sell” (above): It indicates that the seller is motivated to make a deal go through and may be willing to hear lower offers or make negotiations in order to get it to happen.

29. Location, location, location

Perhaps one of the most common real-estate-related catchphrases, if a listing puts a heavy emphasis on a property’s location, it could potentially indicate that the house itself leaves something to be desired (even if the location it’s in is fantastic).

30. Natural landscaping

“Natural landscaping” might indicate that there’s actually very little landscaping at all. Rather, the property might have lots of wild-growing flora that needs to be cleared to create an organized outdoor living space.

31. REALTOR (in all caps)

Although “real estate agent” and “realtor” are often used interchangeably, REALTOR is actually a term trademarked by the National Association of REALTORS (NAR) . Real estate agents can only use the title REALTOR in all caps if they are members of NAR, and adhere to the organization’s strict code of ethics.

The Takeaway

If you feel like property listings are sometimes written in a foreign language, you’re not entirely off-base. Listing agents often use terms that may be well-known in real estate circles, yet are unfamiliar to the average first-time home-buyer.

Agents may also use vague-sounding terms and phrases to make a home’s less-appealing qualities sound more attractive.

Knowing how to decode real estate listings can be a great first step toward finding the perfect home. Another step you may want to take is to pre-qualify for a mortgage.

SoFi offers home loans with as little as 5% down. It only takes two minutes to find out if you pre-qualify and what your options are for potential rates.

House hunting? Learn more about SoFi home loans today.

Photo credit: iStock/irina88w

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Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See 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.
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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Cash-Out Refinance vs Home Equity Line of Credit

Cash-out refinances and home equity lines of credit are two borrowing options that allow homeowners to tap into the equity they have built in their home.

A HELOC is a line of credit secured by the borrower’s home. The line of credit can be accessed on an as-needed basis, up to the borrowing limit. The borrower is only charged interest and responsible for repaying the amount they actually borrowed.

For a cash-out refinance, the borrower takes out an entirely new mortgage while borrowing a portion of their existing home equity. The total borrowed amount of the cash-out refinance will be greater than the borrower’s original mortgage, and the borrower will receive the difference in a lump sum payment from the lender.

So while both allow borrowers to access the equity they’ve developed, a HELOC operates as a revolving line of credit that is secured by the borrower’s home, while a cash-out refinance offers a lump sum amount when the borrower refinances their home, resulting in an entirely new mortgage.

There are differences in how each type of loan works that may influence which is right for you. In general, HELOCs give borrowers flexibility since they can draw on the line of credit as needed and are suited for shorter-term financial needs. Cash-out refinances require the borrower to take out a new mortgage and the borrower generally needs to pay closing costs upfront. They often have a fixed interest rate and may be a better option for borrowers who have a long-term need.

Learn more about the pros and cons of a HELOC vs a cash-out refinance.

Difference in HELOCs and Cash-Out Refinancing

Home Equity Line of Credit (HELOC)

A HELOC is like a line of credit in that borrowers can draw from using their home as collateral. The amount of the line of credit is determined by the mortgage lender and is based on the amount of equity a homeowner has built. Lenders usually limit the line of credit to around 80% to 90% of the equity amount.

A unique feature of a HELOC is that it works somewhat like a credit card in that it is revolving. If a borrower, for example, is approved for a $30,000 home equity line of credit, they can access it when they want for the amount that they choose by writing a check or even using a specified credit card.

Many lenders, however, have a minimum draw requirement, which means a borrower has to take out a minimum amount even if it’s more than they need at the time. Also, lenders have the right to change the terms associated with the line of credit and can even close it, often without having to provide advanced notice.

A major drawback of a home equity line of credit is that the interest rate is usually adjustable. This means that the interest rate can rise, and if it does, the monthly payment can increase. Another point that borrowers should keep in mind is that there is a draw period of 5 to 10 years during which a borrower can access funds and a repayment period of 10 to 20 years.

During the draw period, the monthly payments can be relatively low because the borrower pays interest only, but during the repayment period, the payments can increase significantly because both principal and interest have to be paid.

Cash-Out Refinance

A cash-out refinance is a form of mortgage refinancing that allows a borrower the ability to refinance their current mortgage for more than what they currently owe in order to receive extra funds.

For example, if a borrower owns a home worth $200,000 and owes $100,000 on their mortgage at a high-interest rate, they could refinance at a lower interest rate, while at the same time taking out a larger mortgage. Let’s say they refinance the mortgage at $130,000. In this case, $100,000 would replace the old mortgage, and the borrower would receive the remaining amount of $30,000 in cash.

Borrowers should keep in mind that a cash-out refinance replaces their current mortgage and even though they receive additional cash they only have to make one monthly payment. Unlike a home equity line of credit, a cash-out refinance may have a fixed interest rate, meaning that the interest rate remains unchanged for the life of the loan so the monthly payments remain the same. Additionally, interest rates are typically lower than with a HELOC.

Recommended: Home Buyer’s Guide

The approval process for a cash-out refinance is similar to the initial approval process when buying a home. It can be somewhat cumbersome, but the payoff is a lower interest rate, a fixed payment, and access to additional cash.

HELOC vs Cash-Out Refinance

HELOC Cash-Out Refinance
Borrowing Limit 80% to 90% of borrower’s equity 80% of borrower’s equity
Interest Rate Generally variable May be fixed or variable
Type of Credit Revolving Credit

Borrowers receive a line of credit for a specified amount and draw period (5 to 10 years) followed by a repayment period (10 to 20 years).

Installment Loan

Borrowers receive a lump sum payment. The resulting mortgage has a new rate and repayment terms (generally 15 to 30 years).

Fees Several types of fees, depending on the loan terms, may be charged periodically such as an annual fee or inactivity fee for non-usage. Fees are generally paid upfront in the form of closing costs (typically 3% to 5% of the loan amount)
When might it make sense to borrow? HELOCs can be useful for shorter-term needs or situations where a borrower may want to access funds over a specified period of time Cash-out refinances may be useful if borrowers need a large sum of money that is often used to improve their financial situation on the whole (for example to pay off debt or to finance a large home improvement project).

Which is Better?

Like most things in the world of finance, the answer to which option is better will vary by person based on their individual financial circumstances and unique needs. In some situations, a HELOC may make more sense than a cash-out refinance and vice versa.

Because HELOCs generally have a variable interest, they can be useful for shorter-term needs or situations where a borrower may want access to funds over a certain period of time, for example when completing a home renovation.

Cash-out refinances can make sense if there is a need for a large sum of money or if they can be used as a tool to improve your financial situation on the whole.

Both a home equity line of credit and a cash-out refinance have fees associated with them. With a cash-out refinance, fees are paid upfront in the form of loan closing costs. With a HELOC, several types of fees can be charged periodically such as an annual fee or inactivity fee for non-usage. One way for a borrower to reduce these fees is to shop around and compare lenders.

While it’s typically faster to be approved for a home equity line of credit, the adjustable interest rate and lack of a fixed payment can potentially be a drawback. The approval process for a cash-out refinance is more complex than that of a HELOC, but the loan will have a set payment and a lower interest rate that can provide significant savings. Both options give borrowers the ability to turn their home equity into cash, which can make it possible to achieve certain goals, consolidate debt, and improve their overall financial situation.

The Takeaway

Both cash-out refinancing and HELOCs have their place in a borrower’s toolbox. In both cases, borrowers are borrowing against the equity they have built in their home, which comes with risks. In the case that a borrower is unable to make payments on their HELOC or cash-out refinance, the consequence could be selling the home or even losing the home to foreclosure.

HELOCs are a revolving line of credit that are generally used when a borrower has shorter-term financial needs. Borrowers are able to draw against the line of credit as needed however the interest rate is variable. Cash-out refinances are generally used for longer term needs and often have a fixed interest rate.

Home owners interested in tapping into their home equity may want to consider cash-out refinancing with SoFi.

Qualifying borrowers can secure competitive rates and mortgage loan officers are available to walk borrowers through the entire process.

Learn more about SoFi’s competitive cash-out refinancing options. Potential borrowers can find out if they pre-qualify in just a few minutes.

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

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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.

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