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Coupons have been around for a while and for good reason: They can help you save significant cash on groceries, household items, clothing, and many other products. These days, you can find coupons in the newspaper, inside stores, online, and via retailer and coupon apps. Staying organized and regularly checking these sources can help ensure a steady supply of coupons, and enable consistent savings on purchases.

If you’re ready to save some dough, here are simple tips on finding, using, and maximizing your money with coupons.

Where to Find Coupons

A great way to begin couponing is to scan your kitchen pantry and bathroom cabinet and make a list of the products and brands that you purchase regularly. You can then start looking specifically for coupons for as many of those items as you can. Here are some key places to look.

Newspapers

Even in today’s digital world, it’s still worthwhile to go old-school and check out the Sunday newspaper coupon inserts.

What makes Sunday newspapers such a rich source of savings is the fact that they offer a wide variety of different types of coupons, including store coupons (which are issued by the store and can only be used at that particular retailer) and manufacturers’ coupons (which are issued by the company that makes the product, and can be used at any retailer that carries the product and accepts coupons).

If this week’s paper has a lot of good coupons, consider buying extra copies. Dollar stores often sell papers at a discount and can be a good place to stock up. But even if you have to pay full price, it could still be worth it.

Also keep in mind that some towns and cities publish free local newspapers that carry coupon inserts. Often, these publications get delivered or mailed right to your home.

Magazines

Magazines are still around, and can be a great source of coupons, particularly manufacturer coupons. You may want to flip through some of the magazines stocked at the checkout aisle next time you’re waiting in line at the supermarket.

Some women’s magazines even put together an index of all the coupons that each issue includes.

To up the odds of finding coupons for products you enjoy, consider browsing magazines that reflect your lifestyle.

Based on what you find, you might decide that getting a subscription (which is usually low cost, and a better deal than buying single issues) could be worthwhile.

Websites

If clipping isn’t your cup of tea, you can print coupons from websites that aggregate coupons, such as coupons.com , retailmenot , and valpak. These sites make it easy to search for and find deals.

Another online resource is P&G Everyday . This site offers printable coupons exclusively for Procter & Gamble brands (e.g., Crest, Pampers, Tide). You will need to create an account before you can print coupons.

You may also want to look at the list of items you typically stock in your home and head to the manufacturers’ websites.

Many companies have coupons you can print from their site. Some also reward you with coupons if you sign up for their e-newsletter.

Store sites are also worth checking out. Many grocery and drug store websites offer both manufacturer and store-specific coupons.

You may even be able to download these coupons directly to your store loyalty card, and redeem them simply by presenting your store card at checkout or possibly when ordering online.

Some department store sites also offer printable coupons and savings passes you can use that same day in store, and you may also be able to sign up to have coupons emailed to you directly.

Inside Stores

Many grocery stores, drug stores and supercenters provide coupons in circulars and flyers available inside the store. These can be a great place to find coupons that you’ll actually use.

You can also often find printable coupons in kiosks situated inside stores, often near the entrance. In some cases, after you’ve paid for your items, you may receive coupons (printed separately or at the bottom of your receipt) for items that you purchased that you can use for a future visit.

Recommended: Savings Calculator

Coupon Apps

Some stores, such as Target, have their own app that you can download to your phone and then show at checkout for discounts on items you are buying that day. These offers can often be combined with manufacturer and store coupons to create really good deals.

There are also cashback apps, such as Ibotta and Checkout51, which allow you to earn cash back on many of the products you buy. All you have to do is link your loyalty card to the app or snap a picture of your receipts. Once you earn a certain amount (such as $20), you can redeem your cash back.

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Keeping Coupons Organized

Coupons aren’t worth anything if you don’t have them on you or you can’t find them when you need them.

If you use paper coupons, a good first step is to find a way to contain the chaos, such as using zip-lock bags, a binder, a coupon wallet, a recipe box, or any other storage container. The idea is to have a single landing spot for all coupons. If possible, it’s wise to file them away as you get them, so you don’t have a big mess to deal with all at once.

You may also want to come up with a filing system, such as grouping coupons by grocery category (e..g, dairy, produce, frozen foods), aisle, or expiration date.

It’s also a good idea to go through and edit your collection periodically. Stores typically don’t take expired coupons, so it’s best not to let them eat up space in your filing system. Consider setting a certain day each week or month to go through and purge.

If you use coupons via an app or other electronic means, it’s wise to have the app downloaded and open when you are ready to shop to make the experience as smooth as possible.

Recommended: How to Make Money From Home

Maximizing Your Coupon Savings

Shaving off just a little here and a little there can be nice, but may not make a major change in your spending habits. The real savings that comes with couponing is when you combine coupons with other coupons, as well as other sales offers.

Here are some tricks:

Matching Coupons to Sales

In order to really save money with coupons, you ideally only want to use them on sale items that you typically buy won’t blow your budget.

You can hold onto a coupon until the item goes on sale, or if you see that a store is having a sale on something you buy regularly, you can then check the store circular, manufacturer’s websites, or your app to see if you can find a manufacturer’s coupon for it.


💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

Stacking Coupons

This means using more than one coupon for the same item. For example, you can significantly increase your savings by combining a manufacturer coupon with a store coupon for the same item. You might be able to then amp up savings even more by using a cashback app.

Keep in mind that not all stores allow coupon stacking. You may want to review each store’s coupon policy to see where you can employ this trick.

Using Competitor’s Coupons

Lots of stores accept competitor coupons. It’s a good idea to find out which ones in your area do, and then work those coupons and sales to your advantage. When in doubt, it never hurts to ask.

The Takeaway

Using coupons can be a great way to save money on the products you love, and help keep your everyday spending in line with your budget. You can often find useful coupons in Sunday newspaper circulars, coupon websites, retailer apps, as well as store and manufacturers’ websites. Coupon apps can also help you find coupons for your favorite products quickly.

To really rack up savings with couponing, it pays to go beyond just using a coupon here and there. Consider combining a manufacturer’s coupon with a store coupon, a sale, and a cashback or coupon app.

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

FAQ

How Do Beginners Start Couponing?

It’s relatively easy to start couponing. The first step is to gather coupons from Sunday newspaper inserts, store flyers, and online sources like retail and couponing sites. It’s also a good idea to download store apps, where you can often find digital coupons.

Next, choose a few stores with good coupon policies and start small by matching coupons to sale items. As you get more comfortable, you can expand your sources and strategies. You might even consider joining a couponing community for more tips and support.

What Is the Trick to Extreme Couponing?

Extreme couponing involves maximizing savings through planning and resourcefulness. The key is to combine multiple coupons with sales, rebates, and store promotions — a practice known as “stacking” — to maximize discounts. Extreme couponers also tend to stockpile essentials when they are at their lowest prices. Being flexible and patient is crucial, as the best deals generally don’t come every week.

How Do Couponers Get So Many Coupons?

Couponers accumulate a large number of coupons through various sources. They often subscribe to Sunday newspapers for inserts, sign up for store loyalty programs, and follow brands on social media for exclusive offers. Many also join couponing websites and apps that provide printable and digital coupons. In addition, some couponers participate in coupon swaps and trade with others to diversify their collection. Consistency and dedication are key to building a substantial coupon stash.

About the author

Kylie Ora Lobell

Kylie Ora Lobell is a personal finance writer who covers topics such as credit cards, loans, investing, and budgeting. She has worked for major brands such as Mastercard and Visa, and her work has been featured by MoneyGeek, Slickdeals, TaxAct, and LegalZoom. Read full bio.

SOBNK-Q225-045

Not all debt is bad. In fact, taking out loans and using credit cards responsibly is how most people build credit to access low-interest loans in the future. However, a problem arises if budgeting is poorly managed or finances become tight.

In either case, it’s easy to slide further and further into debt with no clear path to financial freedom. Before you know it, you may end up with $50,000 in credit card debt, which can feel insurmountable. But instead of throwing up your hands, here are some tips for how to pay off $50,000 in credit card debt and get your finances back on track.

Tips for Paying Off $50,000 in Credit Card Debt

Unsure of how to pay down $50,000 in credit card debt? Here are some paths forward you may consider, depending on your financial situation and preferences.

1. Pay More Than the Minimum

If you only pay the minimum balance on your card each month, it will take you much longer to pay off the debt. That’s because you will continue to pay a high interest rate. If you can pay off more than the minimum and start chipping away at the principal loan amount, you’ll pay less in interest over time, and the debt will disappear faster.

2. Focus on High-Interest Debt First

High-interest debt is the most expensive, so you’ll save money if you can get rid of it sooner. Check your credit cards to see which one has the highest annual percentage rate (APR), and then pay that one off first. Then, use the amount you save once that card is paid off to work on paying down the card with the next-highest APR.

Recommended: What Is the 10 Percent Credit Card Interest Rate Cap Act?

3. Pay Off the Card With the Lowest Balance First

A different approach to paying down credit card debt is to initially focus on the card with the lowest balance. This is known as the snowball method, and it can help you stay motivated to pay down debt when you see each card’s balance getting paid off one by one.

4. Review Your Expenses

You might be able to free up cash to put toward paying off your credit card debt by taking a close look at how you spend your money and perhaps creating a budget that’s a bit stricter.

A good place to start when looking for areas to cut back are monthly subscriptions that you’re not using or don’t need, such as streaming services or audiobooks. You might also consider whether you can change your lifestyle. Look for ways to reduce your expenses — perhaps you can eat out less, buy cheaper groceries, or downsize your home.

5. Use Extra Cash to Pay Down Your Debt

If you’re lucky enough to receive a bonus at work or an unexpected windfall, use it to pay down your debt rather than adding it to your spending pool. Also think about whether you could take on some gig work, which would allow you to increase your income temporarily while you focus on paying down some of your debt.

Debt Management Program

Another option you might explore to get a handle on $50,000 of credit card debt is a debt management program (DMP). Credit counseling agencies offer DMPs to help people better manage their finances through education and counseling.

These agencies are non-profit organizations that assign counselors to individuals who need help. The counselors provide advice and guidance, and negotiate with the client’s creditors to develop reduced payment plans. Creditors are eager to get paid back, so they’re usually amenable to lowering interest rates and waiving fees for clients who work with a DMP and show they’re serious about repaying their debt.

If you choose to work with a DMP, you’ll usually make a single monthly payment, which then gets distributed to your creditors. The DMP will lower the amount of interest you’re paying overall and remove late fees, which means more of your money goes toward paying down your principal. This translates to your debt getting paid off quicker.

There’s usually a fee for a credit counselor’s services, and you will be required to close all of the accounts under the DMP so that you don’t continue to rack up debt. Still, a DMP can help relieve financial stress since you’re taking concrete steps to improve your financial situation.

Credit Card Debt Forgiveness

Credit card forgiveness occurs when a creditor forgives you of debt. While this might sound like a surefire path to financial freedom, this is rare for credit card companies, and it usually comes at a cost. Instead, what credit card companies might do is agree to negotiate a settlement whereby you pay a portion of the amount you owe with penalties. If you’re three or more months behind and unable to catch up with payments, it’s possible to negotiate a settlement with a credit card provider.

That being said, a creditor is more likely to offer forgiveness right before selling your debt to a collector because they’ll have to sell the debt for less than the full amount you owe and lose money. Negotiating a settlement with you instead may minimize their losses. It’s even easier to pursue debt forgiveness from a debt collector because collectors can profit even if you only pay some of the amount you owe.

Note that in general, forgiven debt is considered income by the IRS, so you will owe taxes on the forgiven amount.

Additional Options for Paying Off Debt

Other options for paying off $50,000 in credit card debt include taking out a debt consolidation loan, which is a common type of personal loan, or turning to a home equity loan or a balance transfer credit card.

Home Equity Loan

If you have equity in your home, a home equity loan might offer a lower interest rate than your credit card and provide cash to pay off some of that higher-interest debt.

However, you will have to factor closing costs into the equation. Also know that you’re putting your home at risk if you can’t stay on top of monthly payments.

Personal Loan

Among the many common uses for personal loans is debt management and consolidation. If approved, you can use the funds you receive from a personal loan to pay off your credit cards. This will consolidate your debt, leaving you with just one payment to worry about each month.

Ideally, you’ll be able to secure a lower interest rate as well, which can offer savings. A personal loan calculator can help you determine if lowering your interest rate and monthly payments with a personal loan could help you save on total interest.

💡 Quick Tip: Credit card interest caps are a hot topic, as American credit card debt continues to rise. Balances on high-interest credit cards can be carried for years with no principal reduction. A SoFi  personal loan for credit card debt may significantly reduce your timeline and could save you money on interest payments.

Balance Transfer

With a balance transfer, you move your existing credit card debts to another card, ideally one that offers a lower interest rate. Some balance transfer credit cards even offer a temporary introductory APR that’s as low as 0%, though you’ll generally need solid credit to qualify for the most competitive offers.

Just note that a balance transfer fee will apply, so you’ll need to factor that into your overall costs. Also make sure that you’ll be able to pay off your balance in full before the introductory APR ends — otherwise, the interest rate could rise dramatically.

The Takeaway

Figuring out how to pay off $50,000 in credit card debt can seem overwhelming. Luckily, there are a number of options at your disposal. You might try a debt payoff method like the debt snowball or the debt avalanche, or you might look for ways to cut back or bring in extra money to put toward debt payments. Seeking help through a DMP is another option if you’re struggling to get your financial life back in order. Another possibility is consolidating your debt by taking out a personal loan.

Credit cards have an average APR of 20%–25%, and your balance can sit for years with almost no principal reduction. Personal loan interest rates average 12%, with a guaranteed payoff date in 2 to 7 years. If you’re carrying a balance of $5,000 or more on a high-interest credit card, consider a SoFi Personal Loan instead. See your rate in minutes.

FAQ

Should I sign up for a debt management program?

Consider signing up for a debt management program if you feel overwhelmed by your debt. A credit counselor can consolidate your debts into one payment and simplify the debt repayment process, as well as offer general advice and guidance.

Should I seek credit card forgiveness?

Credit card forgiveness is rare to receive. However, you might be able to negotiate with your creditor to reduce the amount you owe, which can help relieve some of your debt burden.

How long will it take to pay off $50k in credit card debt?

How long it will take you to pay off $50,000 in credit card debt depends on the APR and the amount of your monthly payment. For example, assuming you’re not continuing to add to your debt, if you have an APR of 19.07% and make monthly payments of $2,000, it will take you 33 months to pay off your debt. If you were only paying $1,000 a month at that APR, it would take you 101 months — that is, more than eight years.

Photo credit: iStock/milan2099

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SOPL-Q225-006

From record-high inflation to interest rate hikes from the Federal Reserve, the last several years have been plagued with financial unrest.

That may explain why only 28% of U.S. adults say they have enough emergency savings to cover at least six months’ worth of expenses, according to Bankrate’s 2025 Annual Emergency Savings Report.

For many Americans, this lack of reserves is a source of stress. The Bankrate survey found that a full 59% of U.S. adults are uncomfortable with the amount of emergency savings they currently have.

HR leaders have taken note. In fact, a growing number of employers now offer ways to help employees bolster their backup savings as part of their overall financial wellness benefits. If you’re interested in being one of them, read on. What follows are six moves that can help your organization build an emergency auto savings program that works best for your employees and your company.

1. Evaluate Employee Needs

The pandemic demonstrated that a huge percentage of employees in all salary ranges weren’t financially prepared for what was to become one of the most unprecedented periods of history.

This lack of preparedness added to an already stressful situation (working remotely, worries about health, child and elderly care needs, et cetera). Even with the pandemic well behind us, however, employees are still on edge. SoFi at Work’s Future of Workplace Financial Well-Being 2024 study found that 86% of U.S. workers are facing at least one source of major financial stress. What’s more, employees are spending over eight hours per week while at work dealing with issues related to their financial situation (that adds up to more than 10 weeks of work each year).

Adding an emergency savings plan can help employees alleviate a significant amount of financial stress and provide a solution to the lack of short-term savings. This might be especially appealing for younger members of your workforce who may have fewer resources to rely on than older employees.

To determine how effective an auto savings program will be for each segment of your staff, you might think about creating a preliminary survey of employees to see what they feel they need most from a short-term savings plan.

Consider the following questions:

•   Will you participate or do you feel there are already too many demands on your paycheck?

•   Are you more likely to join if the company offers a match or initial contribution?

•   Will you gravitate to emergency savings in lieu of long-term retirement savings?

•   Do more accessible after-tax savings in a 401(k) account that can be used for emergencies appeal to you?

•   Do you think automatic enrollment in an emergency saving plan could help you feel more financially secure?

2. Check Out the Competition

A good next step is to determine what competitors are offering their existing talent and new recruits in the short-term financial wellness arena. For example, is an emergency savings program common among companies competing for your talent? Do most competitors offer a match or contribution to get employees, especially new hires, started?

Use the results of this data and the survey of employees to devise the most effective program for your employees (see below) and, importantly, to help convince team members and management why an automated emergency savings program is right for your company’s comprehensive compensation and benefits package.

3. Determine the Impact of an Emergency Savings Program on Your Total Rewards Strategy

In recent years, you’ve likely had to shift or alter some of the components of your total rewards strategy, including compensation, benefits, flexibility, performance recognition, and career development. In light of those changes, where does an emergency auto savings benefit fit into the new reality? How does it fit with your HR financial wellness goals and business strategy?

The answers are likely to be positive. It’s hard to imagine a total rewards strategy that doesn’t have a place for emergency auto savings, especially in light of recent times.

That said, it’s important that you structure and implement this benefit in a way that not only fills a need but enhances your overall strategy to retain, attract, and maximize talent. Be aware that when you add an important benefit such as emergency savings, you may shift the balance in your employees’ financial well-being focus from long-term to short-term goals.

As you implement the plan, you may need to realign your employee value proposition and total rewards strategy to encompass current and immediate needs while redoubling your efforts to educate and motivate employees on long-term financial wellness goals such as saving for retirement and healthcare costs.

4. Select the Solution and Roll Out Best for Your Goals

At SoFi at Work, we’ve found that selecting the right solution is critical to the utilization and effectiveness of every benefit in your total rewards strategy. Following the McKinsey framework can work well for all types of benefit rollouts, including emergency auto savings programs. These four principles can also help ensure benefit rollouts are integrated into your business strategy.

Choose Partners Wisely

As of 2024, there are two ways to set up ESAs for employees: One is to link these accounts to an existing 401(k), where the ESA shares the same platform as the 401(k) plan. Another option is to set up an ESA with an outside bank or financial institution.

For many employers, an out-of-plan solution is appealing because these accounts are often hosted through banking platforms that can offer easier access to the funds for employees, while reducing employer responsibility and involvement. If you go this route, you’ll want to look for a credible partner that can provide expert support and advice to a wide variety of employees with varying financial needs. Consider partnering with a bank, credit union, or other financial institution that offers a low-cost, easy-to-use platform, like SoFi At Work’s Emergency Vault.

Focus on What’s Feasible

Make the program feasible to launch, which will help you make meaningful progress for employees in the short term as you lay down the foundation for long-term initiatives. This is key with emergency savings rollouts because by helping to relieve some short-term financial stress, you allow employees to focus on long-term goals sooner rather than later.

Make It Sustainable

Sustainable programs are able to flex with your business over time and during uncertain business conditions. Can your emergency auto-save program survive current or future political and economic changes? To answer this, your company may need to weigh questions such as: Do the engagement benefits of a match outweigh the cost of sustaining the program? Is the plan flexible enough to undergo changes in the economy, your workforce, and your business strategy over time?

Get Personal

Enable personalization where you can. This way, employees are likely to feel emergency auto savings can help meet their unique needs. Offering a range of amounts that employees can automatically withdraw is the first step toward personalization. Providing calculators and other educational tools that help employees determine how much they need to save and how much they can afford to save is another personalization tactic.

Recommended: How Much Should Your Employees Have in Emergency Savings?

5. Use Communication Effectively

Top-notch communication techniques can help you drive participation and, importantly, change savings behavior in your workforce.

When asking for participation and engagement, lead with empathy. If there’s one thing the pandemic should have taught us, it’s that one size doesn’t fit all when it comes to supporting employees, who have had many different experiences and have many different needs.

Coordinating communications about the importance of emergency savings with other financial well-being education programs can help get the word out in an immediate and holistic way.

Clarity is Key

Accompany your rollout with extremely clear communications telling employees exactly what they can expect, including:

•   How payroll deduction works

•   How much — or how little — employees can save in the account

•   Calculators, tools, and education efforts designed to help employees determine what they should/can save

•   Thorough explanation of any company match offered — how much, how often, and portability

•   Which bank, credit union, or other financial institution will run the account

•   How much, if any, interest will be earned

•   How withdrawals can be made

•   The fact that withdrawals can be made for any reason, no questions asked, with no penalties or tax consequences

•   A reminder that if employees leave the company, they may easily transfer their contributions to the account to their own savings account

Meet Employees Where They Are

Make sure effective and thorough communications are available across platforms so you can keep up with your far-flung workforce. Simply posting on the company website and hoping people sign up likely won’t work, especially for remote workers who may be feeling disconnected from corporate communications.

In all communications, make sure you take a multi-platform, consumer-grade, mobile-native technology approach.

6. Take Ongoing Pulse Checks

To determine engagement and any ongoing tweaks that need to be made, you’ll want to establish metrics to measure success at least quarterly. Then you’ll want to benchmark those results against your competitors and national averages to add an “outside-in” perspective.

Solicit employee input on the success of the program in three ways — employee surveys, focus groups with critical talent segments, and analysis of recent departing employees and job candidates who declined an offer.

Metrics can also help you track how well the benefit is supporting business goals. For instance, a customer-service-oriented company may find a higher focus among phone reps and fewer errors when staff is less burdened with financial worries.

The Takeaway

These six concepts are designed to help you build a successful, engaging, and effective employer-sponsored emergency savings plan. By reducing employee stress and increasing productivity and loyalty, you’ll help promote financial well-being in your workforce as well as enhance your company’s total rewards strategy and overall business objectives.

If you’re interested in setting up an emergency savings program, SoFi at Work can help. We provide an array of benefit platforms and education resources that can enhance financial wellness throughout your workforce.

Photo credit: iStock/alvarez

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SOAW-Q225-005

While it is possible to buy a second home without a down payment, the scenarios in which you can do so are quite rare.

Traditional zero-down payment programs may not be available to you because you’re no longer a first-time homebuyer. Lenders are also generally hesitant to offer second home mortgages with low down payments. The down payment requirements for a second home are usually 10% or more.

But you may be in luck: Sometimes you can figure out how to buy a second home with no down payment. Read on to learn:

•   What does buying a second home involve?

•   What are the usual down payment requirements for a second home?

•   How can you buy a second home with no down payment?

Note: SoFi mortgage loans require a down payment.

What to Know About Buying a Second Home

Buying a second home comes with a different set of guidelines and rules than purchasing your first home. You’re no longer considered a first-time homebuyer, which disqualifies you from many down payment assistance programs. However, your situation will be treated differently depending on how you want to use the property. Consider the following possibilities:

Moving into the Second Home

If your plan is to keep your first home as a rental property and move into the second home, you may have some options. A mortgage loan may be available in one of two ways.

•   USDA loans in approved areas have zero-down payment options. You’re allowed to get a second home with a zero-down USDA loan if you meet certain requirements involving citizenship, income, and other factors. You must live in the property as your principal residence, and you cannot have a USDA loan on your first property. In addition, you must financially qualify for both homes. To count rental income for the first home, USDA requires 24 months of rental income history.

Note: SoFi does not offer USDA loans at this time. However, SoFi does offer FHA, VA, and conventional loan options.

Other qualifiers for this kind of loan include:

•   The current home no longer meets your needs for certain reasons (for example, if your family is growing and you live in a two-bedroom home, you’re relocating for a new job, or you’re getting divorced).

•   You don’t have another way to obtain the property without the USDA loan.

•   You can only keep one other house besides the new second home.

If, say, you’re moving from to a new region for a job opportunity, and USDA loans are available in the area you’re moving to, it’s possible to keep your first home and buy a second if you meet the above conditions.

Worth noting: An obstacle for borrowers can be that lenders need a way to verify rental income. A signed lease and bank statements may not be enough. Your lender may want to see the rental income reported on your taxes for two years.

•   VA Loans may also offer zero down payment options. Available to qualifying veterans, service members, and surviving spouses, these government-backed loans can only be used to purchase property that will be a primary residence. So, if you’re moving from one place to another and qualify, you can use a VA loan to purchase the next property with no money down.

Buying the Second Home as a Vacation Home or Rental

Is there a way to buy a second home with no down payment if you plan to use it as a vacation home or rental? Options are few and far between if you’re not planning to use the property as your principal residence. When you’re looking at non-owner-occupied financing, lenders usually want a bigger down payment, not a smaller one.

That said, here are a couple of options that could answer the question of how to buy a second home with no down payment:

•   Private loans: If you finance through a relative or other private source, it’s possible to obtain a no-money-down mortgage. Terms are agreed upon by both parties.

•   Seller financing: Much like a private loan, the conditions of seller financing (aka owner financing) a loan are whatever the two parties agree on. If the seller is willing to let you buy the property with no money down, you might be able to make this work. However, seller financing usually comes with a bigger down payment, not a smaller one.

Do You Need a Down Payment on a Second Home?

Down payment requirements for a second home are usually higher. Lenders also look for a higher credit score. The loftier down payment requirement and credit score reflect the fact that the lender is taking on elevated risk since borrowers are more likely to default on a second home than a first home. A lender may expect your down payment to be right around the average down payment on a house, which is currently 13%.

Yet, your mortgage lender is also looking for a loan that accommodates your unique situation to help you to buy a second home. Though no down payment options are rare, your lender may have access to financial products that allow for a smaller down payment.

Can You Buy Another Home When You Have a Current Mortgage?

If you financially qualify, buying another house when you have a mortgage is possible. Generally speaking, lenders look for a strong credit history and enough income to cover your debts (including the cost of the new mortgage) to determine if you qualify for an additional mortgage.

Recommended: What Is a Second Mortgage?

Using Home Equity as a Down Payment Source

If you don’t have enough cash for a down payment on a second home, you may be able to tap your home equity. A home equity loan or a home equity line of credit (HELOC) can help you access money to use for a down payment on a second home.

Though not all lenders will permit this, using home equity may be possible if you want to keep your first home and have no other way of obtaining enough money for a down payment on your second.

It may be advisable to get a home equity loan or HELOC while you are still living in your first house. This allows you to qualify for owner-occupant rates, which are typically much lower than non-owner-occupied rates.

Recommended: HELOC vs. Home Equity Loan: How They Compare

The Takeaway

While there aren’t many options for financing a second home with no down payment, you may be in luck. There are some no down payment loans available to qualified buyers, and these loans can help you preserve cash for renovations, improvements, and other expenses. Even if you can’t find a no down payment mortgage for a second home, you will likely have a number of financing options you can tap into that may allow you to snag another property.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.

FAQ

What is the minimum down payment for a second home?

For a second home that is not going to be your primary residence, most lenders look for at least a 10% down payment.

How do I buy a second home without 20% down?

With a higher credit score and other financial qualifications, you may be able to find a lender or a program with a required down payment less than 20%.

Can I buy another house if I already have a mortgage?

If you’re a qualified buyer with good debt and income levels with a strong credit history, a lender may be able to approve you for a second mortgage.

Can I use my equity to buy another house?

It may be possible to use home equity to buy another home. Contact a lender to go over your unique situation.

Photo credit: iStock/Nuttawan Jayawan

^²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

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

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

SOHL-Q225-002

Buying a home is probably one of the biggest financial commitments many people make in their life, and so it stands to reason that the process can be complex and lengthy. From figuring out how much you can afford to learning how mortgages work to getting preapproved to determining where exactly to live…it’s a lot!

But by learning about the usual flow before you begin hitting the open houses, you can be well-prepared to dive into homeownership. Below, the eight steps to follow that will help make purchasing a home a smooth process.

8 Steps to Prepare for a Home Purchase

Here are the moves that will help you get ready to buy your dream property:

1. Determining Credit Score

A homebuyer’s credit score can impact their ability to secure a mortgage loan with a desirable rate. It can also affect how much they’ll be required to pay as a down payment when it’s time to close.

Credit score can be influenced by a variety of factors, from payment history to amount of debt (aka credit utilization ratio) to age of credit accounts, mix of credit accounts, and new credit inquiries.

Payment history is the main factor that affects a person’s credit score, accounting for 35% of an overall FICO® score. Missing a payment on any credit account — from unpaid student loans to credit cards, auto loans, and mortgages — can negatively impact a person’s credit score.

On the other hand, positive habits can include making on-time payments, limiting the number of new inquiries on their credit file, and working to pay down outstanding balances.

Is There a Credit Score “Sweet Spot?”

Many buyers wonder whether there’s a desired credit score range or “sweet spot” to obtain a mortgage. Typically, a credit score of 740 or higher will get the best deals (meaning lowest rates).

Credit scores can also affect the amount of the down payment itself. Some mortgage lenders require at least 20% of the house’s sale price be put down, but might offer more flexibility if the buyer’s credit score is in the higher range. A lower credit score, on the other hand, could call for a larger down payment.

Whether homebuyers have debt or not, checking credit reports is still a recommended first step to applying for a mortgage. Understanding the information on credit reports can be invaluable in knowing where you stand when qualifying for a mortgage loan rate.

2. Deciding How Much to Spend

Deciding how much to pay for a new home can be based on a variety of factors including expected and unexpected housing costs, upfront payments and closing costs, and how it all fits into the buyer’s overall budget.

Calculating Housing Costs

There are several housing costs for home purchasers to consider that might affect how much they can afford to offer for the house itself. The costs of ongoing fees like property taxes, homeowner’s insurance, and interest — if the loan isn’t a fixed-rate mortgage — can all lead to an increase in the monthly mortgage payment.

Closing costs are fees associated with the final real estate transaction that go above and beyond the price of the property itself. These costs might include an origination fee paid to the bank or lender for its services in creating the loan, real estate attorney fees, escrow fees, title insurance fees, home inspection and appraisal fees and recording fees, to name a few.

Typically, closing costs are between 2% and 5% of the loan’s amount. To get an idea on how this can impact your budget, use this home affordability calculator to estimate total purchase cost.

In addition to closing costs, expenses that potential homebuyers might want to consider are repairs and updates they might want to make to a home, new furniture, moving costs, or even commuting costs. If you are considering buying in a community with a homeowners association, factor those costs in as well.

Finally, unforeseen costs of a major life event like a layoff or the birth of a new child might not be the first expenses that come to mind. However, some buyers could find themselves making a potential home-buying mistake by not getting their finances in order to prepare for the unexpected.

Making a list of these estimated expenses can help homebuyers calculate how much they can feasibly afford. It can also help them create a budget that could help them avoid being overextended on housing costs, especially if they might be paying other debt or saving for other financial goals.

3. Saving for a Down Payment

Saving money for a house is one of life’s biggest financial goals. And how much they’re able to offer as a down payment can significantly impact the amount of their monthly mortgage payment.

A larger down payment can also be convincing to sellers who see it as evidence of solid finances, sometimes beating out other offers in a competitive housing market.

The typical down payment on a house varies depending on the type of buyer, loan, location, and housing prices. Most recently, the median down payment was 18%, although it was 9% for first-time buyers.

For first-time homebuyers, 18% or even 9% of the price of the home can seem like a daunting figure. Many buyers find that cutting spending on luxury or non-essential items and entertainment can help them save up the funds.

Other tactics could include getting gifts and loans from family members, applying for low down-payment mortgages, withdrawing funds from a retirement account, or receiving assistance from state and local agencies.

For buyers who are also sellers, proceeds from another property could also fund the down payment.

4. Shopping for a Mortgage Lender

There are many mortgage lenders competing for the business of homebuyers who finance their home purchases. These lenders offer a variety of mortgages to apply for, with a few of the most common being conventional/fixed rate, adjustable rate, FHA loans, and VA loans.

Buyers might not realize they can — and should — shop around for a lender before selecting one to work with. Different lenders offer different variations in interest rates, terms, and closing costs, so it can be helpful to conduct adequate research before landing on a particular lender.

Mortgage lenders must provide a home mortgage loan estimate within three business days of receiving a mortgage application. The form is standard — all lenders are required to use the same form, which makes it easier for the applicant to compare information from different lenders and make sure they are getting the best loan for their financial situation.

When comparing loan offers, don’t just look at the interest rate. Examine the annual percentage rate (APR), which factors in costs.

5. Getting Preapproved for a Loan

While it might seem like a bit of a nuance, getting prequalified for a loan vs. preapproved for a loan are two different things.

When a buyer is prequalified for a loan, their mortgage lender estimates the loan amount they are qualified for, based on financial information they provided.

When a buyer is preapproved, the lender conducts a thorough investigation into their finances that includes income verification, assets, and credit rating. Preapproval is not a guarantee but tells a buyer that a lender is likely to approve them for a certain amount, as long as they clear the underwriting process.

Having a preapproval letter in hand can help some buyers get ahead in a competitive home market. It shows the would-be owner’s intent to purchase and a lender’s guarantee to back that purchase up.

6. Finding the Right Real Estate Agent

While the internet and popular real estate search websites have made it easier for homebuyers to hunt for a house online, most buyers still solicit the help of a real estate agent to find the right home and negotiate the price and purchase.

Also, many realtors are experts in their particular housing market, so for buyers who are searching in a specific location, a real estate agent may be able to offer valuable insights that might not be revealed online.

7. Exploring Different Neighborhoods

By researching neighborhoods where they might want to purchase a property (both in-person and online), homebuyers can get a better sense of what living in their future community could look like.

Many real estate websites provide comparable listings to help determine a reasonable offer amount in a given neighborhood.

They may also highlight nearby school ratings, price and tax history, commute times, and neighborhood stats like home value fluctuations or predictions, and walkability ratings.

All of this information can help paint a picture of life in the area a homebuyer chooses to settle in. Doing a deep dive into a desired neighborhood can help inform a more realistic decision on where to buy a house.

8. Kicking off the House Hunt

Once the neighborhoods are whittled down, the loan is preapproved, the real estate agent has been signed, and the savings are set aside, the official house hunt can begin.

With the help of a trusted real estate agent and a housing market with adequate inventory, most homebuyers can begin to book showings, attend open houses, and formally put down an offer on a house they like.

In particularly “hot” markets, houses could receive several offers, so homebuyers might want to be prepared to go through the bidding process with a few properties before they get to that glorious final sale.

Are You Ready to Buy a Home Quiz

The Takeaway

A home may well be the biggest purchase you make and the biggest asset you ever own, so it makes sense to spend some time on the home-buying process. From checking out different mortgage options to getting preapproved for a loan to attending open houses, the process is a valuable one that brings you closer to your dream home.

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

FAQ

What is the 20% rule when buying a house?

The 20% rule typically refers to the idea that a homebuyer should make a 20% down payment. This percentage allows the buyer to avoid paying for private mortgage insurance (PMI) as part of their monthly mortgage payment. It’s hard to come up with that much cash upfront, especially for first-time buyers, and it’s not unusual to see buyers put down less. In fact, eligible first-time homebuyers can purchase with as little as 3% down with some lenders. And some government-backed loans require no down payment at all.

How large a down payment do I need for a $350,000 house?

If you want to put down 20% and avoid paying for private mortgage insurance, you will need to come up with a down payment of $70,000. This may be difficult for some buyers, and it is certainly possible to put down less. Eligible buyers may be able to put down just 3.5%, which on a $350,000 house would be $12,250. And if you buy with a government loan, you may be able to avoid a down payment altogether.

What do I do now if I want to buy a house next year?

Preparing to buy a house one year from now is primarily about strengthening your financial situation. Check your credit score and practice good credit hygiene: Pay your bills on time and clear up any blemishes on your credit report. Try to pay down debt and also to save some money for a down payment and the expenses that come with a home purchase. If you have a particular neighborhood or city in mind, begin to follow listings and local news in the area.

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

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

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