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What Is an Assumable Mortgage?

While assuming a mortgage may be different than taking out a traditional home loan, it may offer benefits to select homebuyers — if they know how an assumable mortgage loan works and how to land the best deal possible.

What Is an Assumable Mortgage?

Assuming a mortgage simply means that in a home sale transaction, the buyer takes over the existing mortgage held by the seller, including the loan’s outstanding balance, interest rate, and the responsibility for making payments for the entire loan term.

A buyer may also need to finance the amount of equity the seller has in the home.

Just as with any other financial agreement, it’s recommended that all parties know in advance what obligations they have when they agree to a mortgage assumption.

What Types of Loans Are Assumable?

Home loans that operate outside the federal government’s mortgage loan environment, such as conventional 30-year mortgages issued by private lenders, typically are not assumable.

The following kinds of mortgages, insured by the government and issued by private lenders, are assumable. A seller usually must obtain lender approval for the assumption, or in the case of USDA loans, agency approval. And the buyer must qualify.

FHA Loans

The Federal Housing Administration insures these mortgages. With a minimum 3.5% down payment for borrowers with a credit score of 580 or higher, FHA loans are popular among first-time homebuyers.

VA Loans

Home loans guaranteed by the Department of Veterans Affairs are also assumable, and the buyer does not have to be a veteran or in the military. Note: The seller of these loans may remain responsible for the mortgage if the buyer defaults.

USDA Loans

Loans guaranteed by the Department of Agriculture are assumable only if the current owner is up to date on payments.

How to Get an Assumable Mortgage Loan

First things first: Confirm that the loan is assumable.

The homebuyer must apply for the assumable mortgage and be vetted for creditworthiness and the ability to meet all the contractual requirements — especially showing that they have the financial assets needed to qualify for the loan.

The buyer will need to make up any difference between the amount owed and the home’s current value.

If the mortgage lender or agency signs off on the deal, the property title goes to the homebuyer, who starts making monthly mortgage payments to the lender. If the lender denies the application, the home seller must move on and find a qualified buyer.

Why Do Assumable Mortgages Exist?

Actually landing an assumable debt is doable for both a buyer and seller, but the mortgage lending industry may not make it easy to cut a deal. Why? Because as history attests, mortgage lenders may lose money on assumable mortgages.

In the late 1970s and early 1980s, when interest rates were at the highest levels in the past 50 years, assumable mortgage deals were attractive to buyers who could assume a seller’s mortgage at the original loan interest rate, which in many cases was lower than the then-current rate for a new mortgage.

According to data from ForecastChart.com, a mortgage originating in December 1965 had an average rate of 5.51%. Yet by December 1980, the average mortgage rate stood at 14.79%.

By steering into an assumable loan in the late 1970s, a buyer could take over a mortgage loan with a significantly lower interest rate attached.

Correspondingly, the seller could more easily transfer the property to buyers with an assumable loan if that loan came with a 5.5% interest rate instead of a rate two or three times higher.

Mortgage companies could see that they would lose money if homebuyers chose a lower-rate assumable loan over a higher-rate new mortgage loan.

That’s one reason mortgage companies began inserting “due on sale” clauses, which mandated full repayment of the loan for most home transactions.

As the FHA and VA began issuing more mortgage loans to homebuyers, assumable loans grew in prominence again. More relaxed rules allowed mortgage assumption transactions as long as the homebuyer demonstrated the ability to repay the remaining home loan balance, usually after a thorough credit check.

How Do Assumable Mortgages Work?

With an assumable mortgage, the homebuyer must make up any difference between the amount owed on the mortgage and the property’s current value. That could mean the buyer pays cash to make up the difference or takes out a second mortgage.

For example, a home seller has a $225,000 balance on the home’s original mortgage on a property that’s valued at $350,000. Under the terms of most assumable mortgage loans, the homebuyer must deliver $125,000 at closing to cover the difference between the original mortgage and the current estimated value of the home, usually determined by an appraisal.

When agreeing on an assumable mortgage, the buyer and seller are usually working from one of two models: a simple mortgage assumption or a novation-based mortgage assumption.

Simple Assumption

In a typical simple mortgage assumption, the buyer and seller agree to engage in a private transaction. The home seller transfers the title of the property to the buyer after the buyer agrees to take over the remaining mortgage payments.

If the buyer misses monthly payments or defaults on the original mortgage loan, the lender could hold both parties responsible for the debt, and the credit scores of both buyer and seller could be significantly damaged if the debt isn’t repaid.

Novation-Based Assumption

Unlike a simple mortgage assumption, where a mortgage underwriter usually isn’t directly involved, an assumption with novation is based on the buyer agreeing to assume total responsibility for the existing mortgage debt and remaining payments.

Under those terms, the original mortgage lender releases the home seller from liability for the remaining mortgage loan debt.

Pros and Cons of Assumable Mortgages

Assumable mortgages have upsides and downsides.

Upsides of an Assumable Mortgage

•   A lower rate may be possible. The buyer may save significant money on the loan if the original mortgage’s interest rate is lower than current rates.

•   Closing costs are curbed. The buyer might also benefit because closing costs are minimized in private home sale transactions between a buyer and a seller.

•   No appraisal is needed. With no need to get a new mortgage on the property, a home appraisal isn’t required for a mortgage assumption, although the buyer could request an appraisal as part of the general home purchase agreement.

Downsides of an Assumable Mortgage

•   Upfront cash may be required. To meet terms of an assumable mortgage, the buyer may need to have a substantial amount of upfront cash or take out a second mortgage to close the deal. This usually occurs when the property’s value is greater than the mortgage balance.

•   Second mortgages can be problematic. Second mortgages aren’t always easy to obtain, as mortgage lenders may be reluctant to issue a second home loan when the original mortgage still has a balance due. And a second mortgage probably carries closing costs.

•   The property may be in distress. In some cases, the home seller may be eager to get out of an expensive home and may be behind on payments. In that event, the mortgage lender may require the mortgage to be made current (meaning getting up to date on payments) before it will approve an assumable mortgage.

•   FHA loans carry an add-on. The mortgage insurance premium for FHA loans, if the home seller put less than 10% down, lasts for the entire loan term.

In a nutshell:

Pros

Cons

Possibility of a lower interest rate than market rate Buyer must make up difference if home value exceeds mortgage balance
Reduced closing costs Home may be in distress
Home appraisal not necessary FHA loans usually carry mortgage insurance premium

The Takeaway

Assumable home loans are generally difficult to find and to close, and may require the buyer to take on the onerous task of qualifying for a second mortgage. But if the buyer finds that assuming the mortgage will save money over getting a new mortgage (primarily through a lower rate), an assumable mortgage could be a good way to go.

Hunting for a mortgage? SoFi offers home loans with as little as 5% down, and getting prequalified is quick and easy.

Find the rate you qualify for today.


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

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

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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What’s the Difference Between a Co-op and a Condo?

It’s easy to get confused about the difference between co-ops and condos. If you pulled up pictures of each during a home search, they might seem exactly the same.

But if you’re in the market for a home — especially in a large city where both housing types are popular — you’ll learn quickly that the terms are not interchangeable.

You might have wondered if you’d prefer a house or a condo. But if you’re moving in the direction of co-op vs. condo, it’s important to understand their many distinct features.

Both give a resident the right to use certain common areas, such as pools, gyms, meeting rooms, and courtyards. But there are big differences when it comes to what you actually own when you purchase a condo or co-op.

You’ve done the work of budgeting for a home. Now you need to get a handle on the difference between a condo and a co-op.

What Is a Condo?

With a condominium, you own your home, but you don’t solely own anything outside your unit — not even the exterior walls. Common areas of the complex are owned and shared by all the condo owners collectively.

Buying a condo is not all that different from securing any other type of real estate.

Typically, the complex will be managed by a homeowners association that is responsible for maintaining the property and enforcing any covenants, conditions, and restrictions that govern property usage. The HOA sets the regular fees needed to pay for repairs, landscaping, other services, and insurance for the shared parts of the property. Special assessments also might be levied to pay for unexpected repairs and needed improvements that aren’t in the normal operating budget.

What Is a Co-op?

In the co-op vs. condo debate, it’s key to know that with a housing cooperative, residents don’t own their units. Instead, they hold shares in a nonprofit corporation that has the title to the property and grants proprietary leases to residents. The lease grants you the right to live in your specific unit and use the common elements of the co-op according to its bylaws and regulations.

A co-op manager usually collects monthly maintenance fees; enforces covenants, conditions and restrictions; and makes sure the property is well kept.

As a shareholder, you become a voting manager of the building, and as such have a say in how the co-op is run and maintained. Residents generally vote on any decision that affects the building.

With a co-op, should you want to sell your shares, members of the board of directors will have to approve your new buyer. They will be much more involved than would be the case with a condo. That can make it a lengthy process.

Co-ops and condos are both common-interest communities, but their governing documents have different legal mechanisms that determine how they operate and can affect residents’ costs, control over their units, and even the feeling of community.

Some Pros & Cons of Co-Ops vs Condos

Financing

It’s important to drill down on the details of buying an apartment. Because you aren’t actually buying any real estate with a co-op, the price per square foot is usually lower than it would be for a condo. Eligibility for financing may depend on credit score, down payment, project analysis, minimum square footage of a unit, and more.

However, it might be somewhat harder to get a mortgage for a co-op than a condo, even if the bottom-line price is less. It might not have all that much to do with you. Some lenders are reluctant to underwrite a mortgage for a property on which they can’t foreclose.

Most condo associations don’t restrict lending or financing in the building. If you can get a mortgage, the condo association will usually let you buy a place.

Fees

Because a co-op’s monthly fee can include payments for the building’s underlying mortgage and property taxes as well as amenities, maintenance, security, and utilities, it’s usually higher than the monthly fee for a condo. Either way, though, generally the more perks that come with your unit, the more there is to maintain and in turn, the more you’re likely to pay.

If you’re concerned about an increase in fees, you might want to ask the association or board about any improvements that may lead to an increase in the future — and what the rules are for those who do not pay their assessed dues.

All of these factors are important to weigh when you’re making a home-buying checklist, which includes figuring out how much money you’ll need and the best financing strategy.

Taxes

If you itemize on your income tax return, you may be able to deduct the portion of a co-op’s monthly fee that goes to property taxes and mortgage interest. However, none of a condo’s monthly maintenance fee is tax deductible.

You might want to consult a tax professional about these nuances before moving forward with a co-op or condo purchase.

Privacy vs Community

If you’ve ever lived in one of those neighborhoods where the only time you saw your fellow residents was just before they pulled their cars into their garages, it could take you a while to adjust to cooperative or association living. Because you share ownership with your neighbors, you may be more likely to see them at meetings and other events. And you can trust that they’ll know who you are.

Co-op boards often require prospective buyers — who are potential shareholders — to provide substantial personal information before a purchase is approved, including personal tax returns, personal and business references, and in-person interviews.

You may find that you like the sense of community and that everyone knows and looks out for each other. Or you may not. Again, you might want to ask some questions about socialization and privacy while checking out a particular co-op or an active condo community.

Restrictions

In a co-op, you might run into more rules regarding how you can renovate or even decorate your unit. And don’t forget: You’ll also have to deal with that rigorous application approval process if you ever decide to sell.

Both condos and co-ops frequently have restrictions on renting your unit, how many people can stay overnight or park in the parking lot, the type of pets you can have and their size, and more. Before you look at a unit, you may want to ask your agent about covenants, conditions, and restrictions that could be difficult to handle.

The Takeaway

Whether you end up saying home sweet co-op or condo, ownership offers many benefits you won’t find in a rental. When you’re ready to start a serious search, take the time to look for a lender that will work with you on whatever type of loan you might require. In the co-op vs. condo terrain, there are specialists for both sides.

SoFi offers competitive options for home loans, working with you to find the right fit for your financial needs. You can get prequalified online in just minutes, and you may be able to put as little as 3% down.

Check your rate on a SoFi mortgage today.


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

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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Foreclosure Rates for All 50 States

Foreclosure Rates for All 50 States in November 2021

The number of U.S. properties with foreclosure filings in November was 19,479, according to ATTOM Data Solutions . This is up nearly 94% from November last year when foreclosure activity remained low due to the pandemic-related moratorium on foreclosures. The Biden administration’s final extension of the moratorium on foreclosures ended July 31, 2021. The extension of the evictions moratorium for foreclosed borrowers ended September 30, 2021.

It is also worth noting that foreclosure filings decreased by over 5% from October to November. This dip follows the roughly 5% increase in foreclosure filings that occurred from September to October. The researchers at ATTOM explain that this decline is likely due to a convergence of factors, including a slowdown as the end of the year approaches, support from government and industry programs, and an improving economy.

While foreclosure activity was down in November compared to the previous month, foreclosure filings have been up year-over-year for the past seven months. Read on for the foreclosure rates in November 2021 – plus the five counties with the highest rates within those states.

50 State Foreclosure Rates

As just noted, foreclosures are down from last month, but up significantly compared to last year. Read on for November foreclosure rates for all 50 states — plus the District of Columbia — beginning with the state that had the lowest rate of foreclosure filings per housing unit.

District of Columbia

Ranking in population between Alaska and Vermont, the country’s 48th and 49th least populated states, Washington, D.C. had 13 foreclosures in November. With a total of 315,176 housing units, the District’s foreclosure rate was one in every 24,244 households, putting it in between the states of Washington (#45) and Nebraska (#46).

50. Vermont

In 49th place for population, Vermont ranked 50th for foreclosure rates in November. Of Vermont’s 334,999 housing units, four homes went into foreclosure for a rate of one in every 83,750 households. Only four counties in the state had foreclosures. The counties with the most foreclosures per housing unit were (from highest to lowest): Windham, Washington, Rutland, and Chittenden.

49. West Virginia

The 38th most populated state, West Virginia claimed the 49th spot. It has 892,182 homes, of which 11 went into foreclosure. That means the foreclosure rate was one in every 81,107 homes. This was the same rate as October. The counties with the most foreclosures per housing unit were (from highest to lowest): Taylor, Boone, Raleigh, Mason, and Randolph.

48. South Dakota

South Dakota ranked 48th with five homes going into foreclosure in November. This is the same ranking South Dakota held in October. With 388,569 total housing units, the fifth least populated state’s foreclosure rate was one in every 77,714 households. With only three counties in the state seeing foreclosures, the most foreclosures per housing unit were in (from highest to lowest): Brown, Minnehaha, and Pennington.

47. Oregon

The 27th most populated state ranked 47th for foreclosures. Of its 1,768,901 homes, 42 went into foreclosure, making for a foreclosure rate of one in every 42,117 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Morrow, Union, Curry, Columbia, and Linn.

46. Nebraska

Ranked 37th for population, Nebraska claimed the 46th spot with a foreclosure rate of one in every 27,916 homes. With a total 837,476 housing units, the state had 30 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Phelps, Kimball, Merrick, Gage, and Custer.

45. Washington

Ranked 13th for most populated state, Washington came in at 45th place for foreclosures. It has 3,106,528 housing units, of which 141 went into foreclosure, making the state’s foreclosure rate one in every 22,032 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Chelan, Pacific, Pierce, Asotin, and Clallam.

44. Idaho

The 39th most populated state, Idaho had 35 homes go into foreclosure. With 723,594 total housing units, the state’s foreclosure rate was one in every 20,674 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Oneida, Shoshone, Washington, Payette, and Teton.

43. Kansas

Kansas took the 43rd spot in November. With 1,273,297 homes and a total of 62 housing units going into foreclosure, the 35th most-populated state’s foreclosure rate was one in every 20,537 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Geary, Greenwood, Cowley, Seward, and Mcpherson.

42. New Hampshire

The 41st most populated state, New Hampshire ranked 42nd for highest foreclosure rate. Of 634,726 homes, 32 went into foreclosure, making for a foreclosure rate of one in every 19,835 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Sullivan, Merrimack, Belknap, Carroll, and Hillsborough.

41. Montana

With 27 foreclosures out of 510,180 housing units, Montana ranked 41st, making the 44th most populated state’s foreclosure rate one in every 18,896 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Big Horn, Deer Lodge, Sanders, Yellowstone, and Hill.

Recommended: Tips on Buying a Foreclosed Home

40. Colorado

The 21st most populated state ranked 40th for foreclosures. Of its 2,386,475 housing units, 129 went into foreclosure, making for a foreclosure rate of one in every 18,500 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Crowley, Kit Carson, Elbert, Lake, and Morgan.

39. Mississippi

In Mississippi, the 33rd most populated state, there were 80 foreclosures out of 1,322,808 housing units. That put the foreclosure rate at one in every 16,535 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Tunica, Warren, Kemper, Lowndes, and Forrest.

38. Kentucky

With a total 1,983,949 housing units, Kentucky saw 128 homes go into foreclosure. That put the foreclosure rate for the 26th most populated state at one in every 15,500 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Lewis, Boyd, Carter, Hardin, and Pendleton.

37. Minnesota

Ranked 22nd for most populated state, Minnesota took the 37th spot. It has 2,438,203 housing units, of which 161 went into foreclosure, making the state’s foreclosure rate one in every 15,144 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Lake Of The Woods, Houston, Nicollet, Goodhue, and Steele.

36. Alaska

Alaska saw 21 foreclosures, making the foreclosure rate one in every 14,984 homes. That caused the third least populated state, with a total of 314,670 housing units, to take the 36th spot. The counties with the most foreclosures per housing unit were (from highest to lowest): Valdez-Cordova, Ketchikan Gateway, Anchorage, Fairbanks North Star, and Juneau.

35. Louisiana

Ranked 25th for population, Louisiana took the 35th spot, with 152 homes out of a total 2,059,918 going into foreclosure. That means Louisiana had a foreclosure rate of one in every 13,552 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Ouachita, Ascension, West Carroll, Acadia, and Orleans.

34. Arizona

In Arizona, the 14th most populated state, there were 224 foreclosures out of 3,003,286 housing units. That put the foreclosure rate at one in every 13,408 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Cochise, Graham, Mohave, Pima, and Yuma.

33. Tennessee

In Tennessee, the 16th most populated state, there were 231 foreclosures out of 2,963,486 housing units. That put the foreclosure rate at one in every 12,829 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Lake, Tipton, Haywood, Claiborne, and Pickett.

32. Missouri

The 18th most populated state, Missouri came in 32nd for highest rate of foreclosures. Of its 2,790,397 homes, 238 went into foreclosure, making for a foreclosure rate of one in every 11,724 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Webster, Clinton, Caldwell, Bates, and Shelby.

31. Wisconsin

With 238 foreclosures out of 2,694,527 total housing units, Wisconsin, the 20th most populated state, had a foreclosure rate of one in every 11,322 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Dodge, Richland, Rusk, Vernon, and Waukesha.

Recommended: What Is a Short Sale?

30. Hawaii

The 40th most populated state, Hawaii came in 30th for foreclosures. Of 542,674 homes, 48 went into foreclosure, making for a foreclosure rate of one in every 11,306 households. Only four counties in the state had foreclosures. The counties with the most foreclosures per housing unit were (from highest to lowest): Hawaii, Maui, Honolulu, and Kauai.

29. Michigan

Ranking 10th for population, Michigan took the 29th spot with a foreclosure rate of one in every 11,075 homes. With a total of 4,596,198 housing units, the state had 415 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Genesee, Macomb, Wayne, Ingham, and Shiawassee.

28. Virginia

The 12th most populated state ranked 28th with 318 homes going into foreclosure. With 3,514,032 total housing units, the state’s foreclosure rate was one in every 11,050 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Hopewell City, Petersburg City, Martinsville City, Colonial Heights City, and Buena Vista City.

27. Wyoming

Ranked the least populated in the country, Wyoming claimed the 27th spot for foreclosures. With 276,846 housing units, of which 27 were in foreclosure, the state’s foreclosure rate was one in every 10,254 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Campbell, Sweetwater, Natrona, Converse, and Carbon.

26. Connecticut

With 151 of its 1,516,629 homes going into foreclosure, Connecticut’s foreclosure rate was one in every 10,044 households. In the 29th most populated state, the counties that had the most foreclosures per housing unit were (from highest to lowest): Windham, New Haven, Fairfield, Middlesex, Hartford, and Tolland.

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25. Alabama

Ranked 24th for most populated, Alabama came in 25th for foreclosure rates. Of its 2,255,026 homes, 226 went into foreclosure, making for a foreclosure rate of one in every 9,978 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Saint Clair, Jefferson, Bullock, Greene, and Pike.

24. Massachusetts

The 15th most populated state ranked 20th for foreclosures. Of its 2,897,259 housing units, 302 went into foreclosure, making for a foreclosure rate of one in every 9,594 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Hampden, Berkshire, Plymouth, Worcester, and Bristol.

23. Pennsylvania

Pennsylvania, the fifth most populated state, had a total of 610 housing units out of 5,693,314 homes go into foreclosure, making the state’s foreclosure rate one in every 9,333 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Snyder, Greene, Wayne, Delaware, and Philadelphia.

22. New Mexico

The 36th most populated state took the 22nd spot in November for most foreclosures. Of its 937,920 homes, 101 went into foreclosure, making for a foreclosure rate of one in every 9,286 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Colfax, Chaves, San Juan, Valencia, and Santa Fe.

21. Rhode Island

The eighth least populated state took the 21st spot for most foreclosures. A total of 53 homes went into foreclosure out of 468,335 total housing units, making the foreclosure rate for the Ocean State one in every 8,837 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Newport, Providence, Kent, Bristol, and Washington.

Recommended: Home Buying 101: How Much House You Can Afford

20. New York

With 955 out of a total 8,322,722 housing units going into foreclosure, the fourth most populated state took the 20th spot. This put New York’s foreclosure rate in November at one in every 8,715 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Suffolk, Saint Lawrence, Putnam, Suffolk, Ulster, and Chemung.

19. North Carolina

The ninth most populated state took 19th place for most foreclosures. Out of 4,627,089 homes, 534 went into foreclosure. That put the Tar Heel State’s foreclosure rate at one in every 8,665 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Tyrrell, Vance, Onslow, Scotland, and Pasquotank.

18. Arkansas

Ranked 32nd for most populated state, Arkansas took the 18th spot for foreclosures. It has 1,370,281 housing units, of which 163 went into foreclosure, making the state’s latest foreclosure rate one in every 8,407 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Garland, Perry, Jackson, Grant, and White.

17. Texas

The Lone Star State saw 1,414 foreclosures in November. With a foreclosure rate of one in every 7,735 households, this put the second most populous state with 10,937,026 housing units into the 17th spot. The counties with the most foreclosures per housing unit were (from highest to lowest): Dickens, Crosby, Liberty, Atascosa, and Kaufman.

16. Utah

Utah placed 16th in November. Of the Beehive State’s 1,087,112 housing units, 143 homes went into foreclosure, making the 31st most populated state’s foreclosure rate one in every 7,602 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Utah, Beaver, Carbon, Iron, and Sevier.

15. North Dakota

In November, North Dakota’s foreclosure rate was one in every 7,461 homes. That puts the fourth least populated state – with a total of 373,063 housing units, of which 50 were in foreclosure – in 15th place. The counties with the most foreclosures per housing unit were (from highest to lowest): Pembina, Walsh, Stutsman, Mercer, and Dickey.

14. Georgia

The eighth most populated state, Georgia ranked 14th in November – the same ranking it held in October – for most foreclosures. Of its 4,283,477 homes, 622 were foreclosed on. That put the state’s foreclosure rate at one in every 6,887 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Chatham, Pulaski, Butts, Appling, and Decatur.

13. Iowa

With 212 housing units out of 1,397,087 homes going into foreclosure, the 30th most populated state’s foreclosure rate was one in every 6,590 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Jasper, Lucas, Des Moines, Cedar, and Henry.

12. California

The most populated state ranked 12th for most foreclosures in November. This is the same ranking California held in October. Of its 14,175,976 housing units, 2,167 went into foreclosure, making California’s foreclosure rate one in every 6,542 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Trinity, Sutter, Yuba, Kern, and Calaveras.

11. Oklahoma

Oklahoma claimed the 11th spot. With housing units totaling 1,731,632, the 28th most populated state saw 273 homes go into foreclosure at a rate of one in every 6,343 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Washita, Alfalfa, Canadian, Tulsa, and Carter.

Recommended: Your 2021 Guide to All Things Home

10. Maryland

Ranked 19th for most populated state, Maryland took 10th place for highest foreclosure rate. With a total of 2,448,422 housing units, of which 394 housing units went into foreclosure, the state’s foreclosure rate was one in every 6,214 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Prince George’s County, Charles, Calvert, Kent, and Allegany.

9. Maine

Ranked as the ninth least populated state, Maine placed ninth for foreclosures. With a total of 742,788 housing units, the Pine Tree State saw 128 foreclosures for a foreclosure rate of one in every 5,803 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Knox, Aroostook, Penobscot, Somerset, and Kennebec.

8. Indiana

The 17th largest state by population, Indiana took the eighth spot with a foreclosure rate of one in every 5,385 homes. Of its 2,886,548 homes, 536 homes were foreclosed on in November. The counties with the most foreclosures per housing unit were (from highest to lowest): Vermillion, Starke, Benton, Fayette, and Orange.

7. South Carolina

With one in every 5,331 homes going into foreclosure, South Carolina took the seventh spot. Ranked 23rd for population, South Carolina has 2,286,826 housing units and saw 429 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Kershaw, Dorchester, Oconee, Richland, and Chester.

6. Nevada

Ranking 34th in population, Nevada ranked sixth in November. With one in every 4,811 homes going into foreclosure and a total of 1,250,893 housing units, the state had 260 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Churchill, Clark, Lyon, Washoe, and Elko.

5. New Jersey

With a foreclosure rate of one in every 4,096 homes, New Jersey took the fifth spot. The 11th most populated state has 3,616,614 housing units, 883 of which went into foreclosure. The counties with the most foreclosures per housing unit were (from highest to lowest): Cumberland, Sussex, Camden, Burlington, and Salem.

4. Delaware

The sixth least populated state in the country, Delaware ranked fourth for highest foreclosure rate in November. With one in every 3,800 homes going into foreclosure and a total 433,195 housing units, Delaware saw a total of 114 foreclosure filings. With only three counties in the state, the most foreclosures per housing unit were (from highest to lowest) in: Kent, New Castle, and Sussex.

3. Ohio

Ohio claimed the third spot with a foreclosure rate of one in every 3,669 homes. With a total of 5,202,304 housing units, the seventh most populated state had a total of 1,418 filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Cuyahoga, Seneca, Huron, Fayette, and Lake.

2. Florida

Florida held on to its second spot from October. The third most populated state in the country has a total of 9,448,159 housing units, of which 2,847 went into foreclosure. That’s a foreclosure rate of one in every 3,319 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Baker, Liberty, Gilchrist, Gadsden, Escambia.

1. Illinois

Illinois took the top spot, once again, for highest foreclosure rate. Of its 5,360,315 homes, 1,682 went into foreclosure, making the sixth most populated state’s foreclosure rate one in every 3,187. The counties with the most foreclosures per housing unit were (from highest to lowest): Clark, Mason, Dewitt, De Kalb, and Cook.

The Takeaway

Of all 50 states, Florida had the most foreclosure filings (2,847); Vermont had the least (4). As for the states with the highest foreclosure rates, Illinois, Florida, and Ohio took the top three spots respectively.

The Great Lakes region and the Mideast region tied, once again, for the largest presence among the 10 states that ranked the highest for foreclosure rates. All the same states from October re-appear in both regions. In the Great Lakes, these states were (from highest to lowest): Illinois, Ohio, and Indiana. In the Mideast, these states were (from highest to lowest): Delaware, New Jersey, and Maryland.

The Plains region had the largest presence among the 10 states that ranked the lowest for foreclosure rates. All the same states from October re-appear. These states were (from highest to lowest): Kansas, Nebraska, and South Dakota.

Looking to buy a home? SoFi offers competitive home financing rates, exclusive member discounts, and guidance from mortgage loan officers and member specialists.

Discover more about home loans at SoFi.


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

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

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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7 Key Steps in Buying a Home

Purchasing a house or condo can be pretty complicated, but having a blueprint of the normal process can steady your nerves.

The journey can seem especially mystifying if you’re a first-time buyer, since everything is likely to be new to you. First-time buyers made up 31% of all recent homebuyers, according to the 2021 generational trends report from the National Association of Realtors® (NAR).

The report also found that what it defines as millennials, buyers ages 22 to 40, continue to make up the largest share of homebuyers, 37%.

7 Key Steps in the Home Buying Process

First, you’ll want to keep it real in your real estate search. To that end, here’s a home affordability calculator.
Then here are the steps you can expect in the home-buying process.

1. Do Your Homework

Before you start the search, consider the type of home you’d like to buy and what neighborhoods you’d want to live in. Then do some research to see what similar homes have sold for in the recent past. That should give you an idea of whether your resources align with your dream house or whether you need to reevaluate.

It’s good to know how much of a down payment you’ll need, and what it will take to qualify for a home loan.

Lenders typically give great weight to your credit score and debt-to-income ratio. Most will also be looking to verify your income and at least two years’ worth of steady employment or consistent and ongoing income.

Most conventional mortgages—those originated by private lenders—require a down payment of at least 3%. An FHA loan requires as little as 3.5% down, and a VA loan, usually nothing down.

Putting less than 20% down on almost any purchase will mean ongoing fees or, in the case of a VA loan, a one-time fee.

2. Get Prequalified for a Home Loan

Next, you’ll need to figure out what kind of home you can afford. One way to do this is by getting prequalified with a mortgage lender. Using self-reported information, the lender reviews the basics of your financial situation and provides an estimate of how much you may be able to borrow and at what rates.

Getting prequalified with several lenders can help you get a sense of what kind of home you can afford and allow you to compare monthly payments and interest rates.

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


3. Find a Real Estate Agent

It’s not required, but the vast majority of house hunters purchase a home through a real estate agent or broker.

You can hire either a Realtor® or a real estate agent to assist you in your search. Both are licensed professionals. The main difference is that a NAR member is required to stick to a code of ethics that includes putting a client’s interests before their own.

Agents only get paid when you close on a home. The seller typically pays the real estate commission for both the listing agent and buyer’s agent.

A real estate agent will help you find property listings that fit your preferences, visit them to make sure they’re up to snuff, write offers and counteroffers, attend inspections, help you negotiate, and work with you to deal with any obstacles that emerge.

When looking for an agent, you can ask people you know for recommendations, note the names on signs in your area, and read reviews online. You may want to speak to several agents until you find one who feels right and may be considered an expert in the area where you want to buy.

4. Get Preapproved for a Mortgage

Once you’re ready to start seriously looking for a home, unless you’re a cash buyer you’ll need to lock down funding. You can do this by getting preapproved with a mortgage lender. This is a more involved process than prequalification.

You’ll fill out a detailed application and allow the lender to do a hard credit check and verify your finances.

When you’re preapproved for a mortgage, you will know exactly how much you can most likely borrow and at what terms. That’s because the entire credit portion of the loan has been verified.

Remember that you don’t have to take out the highest amount you qualify for if you find a more affordable home. In that scenario, you’d just ask your lender to adjust the preapproval letter based on the actual bid you’re making on a home.

Showing a seller the lender’s preapproval letter (typically valid for 90 days) can help you rise above the pack if multiple offers are in play.

5. Shop for a Home

Next, it’s time to start shopping for a house or condo or buying into a co-op. If you have an agent, you’ll probably sit down and outline the parameters of what you’re looking for.

Then the agent will start bringing to your attention properties that might fit the bill, and you’ll attend viewings and open houses.

But these days, there’s also a lot more you can do to jumpstart your home search on your own. Websites like Zillow, Trulia, Redfin, and others can help you find out about properties as soon as they’re on the market.

If you’re moving forward without an agent, you can consider exploring platforms that have cropped up to help buyers who don’t have agents.

6. Make an Offer

Once you find the perfect home, you’re ready to make a formal purchase offer. This involves not only letting the seller know how much you’re willing to pay but providing evidence that you’ll be able to afford those costs and when you expect to close on the house. The offer also details what you expect the seller to do before closing.

At this stage, many buyers also provide earnest money, a deposit that can be up to 10% of the negotiated price. The offer might also include contingencies, which are conditions that need to be met in order for you to proceed with the transaction.

Some contingencies, like a home or roof inspection, are usually at the buyer’s discretion. Others, like a home appraisal, can be tied to the loan approval.

7. Close on the Home and Move In

Once you and the seller are on the same page about a price, the house goes into escrow. That involves a third party, namely an escrow officer, making sure that both of you meet the conditions you’ve agreed to.

Your real estate agent will help make sure any home inspection you ordered takes place. If there are unwelcome surprises, the agent might need to help you renegotiate the selling price. Depending on the severity of the surprise—if a significant home repair is needed, for example—the lender might require a complete fix before escrow closes.

Once that’s all set, and all income, assets, and property conditions are signed off on by the underwriter, you will be issued final loan approval.

Next, you’ll sign the needed paperwork to take out the mortgage and finalize the home purchase. It can take a few days for the purchase money to reach the seller and for the county records to reflect the transfer of the sale.

And then the house is all yours! Move in and enjoy.

The Takeaway

Buying a home isn’t a cakewalk, but the path is much smoother when you know the steps involved.

One of the first things to think about doing is to get prequalified for a mortgage. SoFi, which offers fixed-rate mortgages with competitive rates, makes that quick and easy.

Check your rate for a SoFi Home Loan in two minutes.


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

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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Do You Qualify as a First-Time Homebuyer?

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

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

‘First-Time Homebuyer’ Under the Microscope

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

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

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

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

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

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

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

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

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

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


Options for First-Time Homebuyers

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

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

Federal Government-Backed Mortgages

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

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

FHA Loans

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

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

USDA Loans

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

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

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

VA Loans

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

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

Government-Backed Conventional Mortgages

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

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

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

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

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

A Mortgage for Certain Civil Servants

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

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

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

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

State, County, and City Assistance

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

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

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

Using Gift Money

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

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

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

The Takeaway

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

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

It’s easy to find your rate.


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

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

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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