Beginner’s Guide to a Bedroom Remodel_780x440

Beginner’s Guide to a Bedroom Remodel

Is your bedroom cluttered, depressing … tired? Maybe it’s high time for a bedroom remodel, an awakening of a room that can range from paint to structural changes.

If you’re a homeowner looking to spice up or calm down, your bedroom, know that bedroom remodels can have a return on investment of 40% to 80%, according to HGTV.

The steps you can take to renovate rooms aren’t too onerous and can often be done without the help of a contractor or other professional.

Recommended: The Top Home Improvements to Increase Your Home’s Value

How Much Does It Cost to Remodel a Bedroom?

The amount of money you put into a bedroom remodel depends on what you’re trying to achieve. Do you simply want to change up your décor, including your bed, bedside tables, and desk? Or do you want to do that, paint the room a different color, and add some window treatments?

You may also be looking at more extensive changes, such as ripping up carpeting and putting in new flooring, installing new windows, or building custom cabinetry in your closet.

The good news is that most bedroom remodels are less costly than renovations that entail taking down walls, rewiring electrical systems, and installing pipes, though some bedroom remodels may call for these types of tasks.

You’re less likely to be doing major construction that requires hiring licensed professionals like a carpenter, plumber, or general contractor.

Even if you have to rely on the services of a vendor, like one that can design and produce an extensive closet remodel, there are likely other aspects of the project you can tackle yourself.

Simple Bedroom Remodel Ideas

Decluttering is a tried-and-true way to visually open up a room. That means books and magazines, laundry or piles of clothes, and furniture. Here are some other ways.

Painting

House-paint companies boomed during the pandemic, Artnews pointed out. Gray—all 50 shades—were out. Warm tones and deeply saturated color were in.

Some of the major brands and independent companies offer online color consultations. And then, if you feel up to the task, you can avoid hiring a painter by painting your walls yourself.

You’ll want to take stock of the current trim and match a color to it. You’ll also want to consider how the room changes color depending on the time of day. Sometimes a room that looks white in the evening can take on a yellowish tint during the light of day

You’ll want to make sure you have all the equipment you need to get the work done efficiently and well. This includes paintbrushes, a paint roller and pan, rags, sandpaper, and drop cloths.

The great thing about paint is, if you feel you’ve done a poor job in spots, you can always paint over it.

Flooring

What you do with your floors is going to depend largely on personal taste. Your choices include wall-to-wall carpeting, wood or wood-engineered flooring with or without area rugs, and tile or ceramic flooring, which works best in humid climates.

You’ll want to think about how your flooring will complement the rest of the room, including furniture. You’ll also want to take your comfort into consideration. Carpeting, for example, muffles sound, while wood flooring does not.

Some people don’t like walking barefoot on anything besides carpet, for example, while others prefer the look of bare floors.

Cost may also come into play here as wood flooring is generally more expensive than carpeting, topping at $14 per square foot compared with carpeting, which runs upward of $11 a square foot, HomeAdvisor notes.

Furnishings

While some homeowners may want to keep the bedroom furniture they’re currently using, others choose to sell or donate what they have and start over.

If you’re in the latter group, you’ll want to consider the paint and flooring you’ve chosen when looking for a new bed and headboard, bedside tables, desk, and chest.

Looking online for bedroom remodel ideas can be a low-cost way to design your bedroom décor, with many blogs and websites linking to online retailers for easy purchase.

Social media sites like Houzz and Pinterest have scores of photos and boards delineated by room, color, and style to help you brainstorm.

If your budget allows, this might be an area to bring in the help of an interior designer, who may be able to see things you don’t, such as whether you need a large desk for working from home, a bench at the end of the bed for sitting, or a changing table if you plan to grow your family in the near future.

More Extensive, and Expensive, Bedroom Remodels

While bedroom remodels are typically less wide-ranging than those of a bathroom or kitchen, you may opt for larger changes that can drive up your cost.

These include altering the function and structural design of a room, which may require the use of a professional.

Recommended: 10 Steps for the Perfect Bathroom Remodel

Structural Changes

If you own a home or are looking to buy, the lack of an ensuite bathroom might be a big deal. Maybe you’d really like to be able to pad into the bathroom in the middle of the night without tiptoeing through the hallway.

Depending on the layout of the bedroom and the rooms near it, this may necessitate turning a closet into a bathroom, or building a door through a wall that conjoins your bedroom with that hallway bathroom.

Either way, you’re probably looking at hiring a plumber, carpenter, electrician, and contractor. While this type of remodeling affords you more options than sticking with your current footprint, it comes with added costs to be aware of.

Recommended: Renovation vs. Remodel

Lighting and Fans

Adding recessed lights requires the work of a licensed electrician, who may have to work around obstacles like heating ducts, and will charge for both installing and wiring each light.

Ceiling fans, while pretty and useful, will likely also require the hiring of a professional installer to burrow through your ceiling, connect to electricity, and complete the necessary patchwork afterward.

Paying for It

Having a budget and payment plan is key, no matter the size of your bedroom remodel. Some changes are so small that homeowners can pay upfront.

Those with more extensive remodels might use a home equity loan or personal loan.

The Takeaway

A bedroom remodel can be a fun project from start to finish. After all, we spend a lot of time in our personal spaces, so it’s an opportunity to renovate a room to your exact specifications.

A home improvement loan could be just the ticket for a bedroom remodel.

Or if you’re a house hunter and have your eye on a home with bedrooms that could use some invigoration, know that SoFi offers home loans and mortgage refinancing.

Check your rate in two minutes.



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

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.

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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How Much is a Downpayment on a House?

Mortgage lenders traditionally have wanted to see borrowers put down 20% of a home’s purchase price. But what are the benefits and challenges of a down payment that’s less than 20%?

Lenders traditionally have wanted to see borrowers put down 20%.

The upshot: Is 20% down dated advice?

Let’s look at these questions and more to help you qualify for a home loan, and ultimately turn your dream house into a reality.

Qualifying for a Mortgage Loan

The question of how much to put down on a house is really a subset of a bigger homebuying question: whether the house you want is within your budget.

Many house hunters take their household gross annual income (before taxes) and multiply it by 2.5. That would be the most, they decide, they can afford a house.

So, if your household income is $150,000, the maximum purchase price, using this formula, would be $375,000. Note that this isn’t a formula used by a lender; it’s a general rule of thumb that people use.

A lender often wants your total housing expense—monthly principal, interest, property taxes, and insurance, plus any homeowners association fee or private mortgage insurance—to be, at most, 28% of your gross monthly income.

So, using the figure of $150,000, that would equal a maximum housing expense of $3,500 per month ($150,000/12 x 28%).

Your estimated housing payment will depend on how much of a down payment is applied. Let’s say the house you want costs $329,000, which happens to be the recent median existing-home sales price nationwide.

If you were to finance the home, you’d need $65,800, plus closing costs, to swing a 20% down deal. So the first question is whether you have or can get those funds easily enough.

If the answer is “yes,” then you can check your income against the formulas provided to see if it all works out according to plan.

If you don’t have that kind of cash for the down payment—if you could afford a smaller down payment plus closing costs, and still meet the income requirements—your next step would be to see which lenders offer home loans with that kind of program.

Mortgage loans generally fall into two categories: loans that are insured or guaranteed by the government, and loans not insured or guaranteed by the government, which are called conventional loans.

Government-backed mortgages are often easier to qualify for than conventional mortgages.

FHA Loans

One home loan option is a Federal Housing Administration (FHA) loan. FHA loans are a government program that was initially created to help people buy homes during the Great Depression. It’s still available, and people who can’t afford larger down payments might choose this option.

The FHA doesn’t directly make mortgage loans. Instead, certain lenders offer FHA loans that are backed by a government guarantee. Because of this guarantee, lenders will typically offer more flexible guidelines for mortgage approvals, including the size of the down payment.

In general, if you have a FICO® credit score of 500 to 579, the minimum down payment required for FHA loans is 10%. If your credit score is 580 or above, the minimum down payment is 3.5%.

FHA loans require an annual mortgage insurance premium (MIP) and an upfront MIP of 1.75% of the base loan amount. You’ll typically pay the MIP for as long as you have the loan, unless you make a down payment of at least 10%. If that’s the case, your MIP will be canceled after 11 years.

How much is the MIP? A rate of 0.85% applies to borrowers who put down less than 5% on a 30-year FHA loan for $625,500 or less. You can estimate the upfront and ongoing MIP at fha.com/calculator_payments.

VA Loans

If you’re a military veteran, active service member or, in some cases, a surviving military spouse, you may qualify for a U.S Department of Veterans Affairs (VA) mortgage loan without a down payment.

This program was created by the US government in 1944 to help people returning from military service purchase homes.

Monthly mortgage insurance is not required, but a one-time funding fee is for some borrowers. For a first VA-backed purchase or construction loan, the fee is 2.3% of the total loan amount if you put less than 5% down. It’s 1.65% of the loan amount if you put 5% to 10% down.

Conventional Loans

Some private lenders provide conventional loans for homebuyers with less than 20% down. Almost always, in these cases, you’ll need to purchase private mortgage insurance (PMI) that insures the lender.

PMI adds a fee to the monthly mortgage payment.

PMI can be an annual 0.5% to 2.25% of the total loan amount, with the premium amount depending on the type of mortgage you get, your down payment, your credit score, and loan term. It also depends on the amount of PMI that’s required by your loan program or lender.

Borrowers usually choose to pay PMI monthly, and it is included in the monthly mortgage payment. Expect to pay about $30 to $70 per month for every $100,000 borrowed, Freddie Mac says.

You can ask to get rid of PMI after you accumulate 20% equity and have a good payment record, there are no liens on the property, and the value has not declined. (PMI usually must end once you have 22% equity in your home, based on the original purchase price, if you’re current on payments.)

You may also be able to get rid of PMI if your home’s value rises enough to give you 25% equity and you’ve paid PMI for at least two years.

This applies to borrower-paid mortgage insurance. You can’t cancel lender-paid mortgage insurance when your equity reaches 78% because it is built into the loan.

How Big Should Your Down Payment Be?

The average down payment falls below 20%, so if you can’t cough up 20%, you’re in good company.

In general, it makes sense to put down as much as you can comfortably afford. The more you put down, the less you’ll be borrowing, which translates into more equity in the house and lower monthly payments. Plus, with a lower mortgage amount, you’ll pay back less interest over the life of the loan.

On the other hand, it doesn’t always make sense to empty the bank in order to put down the largest down payment possible. That’s because you’ll likely have moving expenses, plus you’ll need to pay closing costs, which can vary by purchase price, state in which property is located, interest rate chosen, lender processing fees, and more.

Furthermore, the home you’re moving into may need cosmetic repairs, or you may want to redecorate, add new landscaping, and so forth. Plus, you’ll probably want to keep an emergency fund to pay for unexpected costs.

If this doesn’t all seem doable, you may want to look for a more affordable house for now and save up for your dream house. Or, if you can wait a while before buying, then you can create a savings plan to build up a down payment.

Saving for a House

For 58% of recent buyers, their down payment came from savings (a fortunate 10% of buyers used a gift from a friend or relative toward the down payment), according to a 2021 National Association of Realtors® report.

Saving can be difficult, to be sure. In the Realtors® report, nearly half of respondents who said that saving for a down payment was difficult attributed the struggle to student loans, and 36% to credit card debt.

But if you are ready to be a homeowner, now is the time to get serious about saving.

Here are steps to consider taking:

1.   Track your spending, including fixed expenses (rent, utilities, car payments, and so forth) and variable ones (like dining out, clothes shopping, and hobbies). Add expenses that you pay annually or semiannually, breaking those down into monthly amounts.

2.   Make a budget that helps you to trim unnecessary expenses. (Does it make sense to refinance student loans or consolidate credit card debt into a personal loan?)

3.   Brainstorm ways to boost your income. Asking for a raise may be an option.

4.   Figure out what you can save each month, both for emergency expenses and for your house fund.

5.   Set a timetable for your plan.

The Takeaway

If you can manage a down payment but it’s south of 20%, know that you’re in good company. Finding a mortgage with less than 20% down is often doable, though fees usually come along for the ride.

Still, if you’d like to hear the jingle of house keys instead of apartment keys in your pocket, give SoFi mortgage loans a look.

SoFi offers home loans with as little as 5% down. And you can get prequalified in just minutes with no obligation.

Ready to get started? It’s easy to check 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.

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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IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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How to Deal With an Underwater Mortgage

How to Deal With an Underwater Mortgage

An underwater house is more than just a financial burden—it’s an emotional one, too.

Rather than live in fear or denial, it’s smart to explore your options if you’re underwater or worried that an upside-down mortgage might be on the horizon.

Thanks to soaring home prices, the national negative equity share in late 2020 hit its lowest point in over 10 years, CoreLogic reported.

Still, more than 5% of mortgage holders, including those in forbearance plans, remained delinquent on payments in March 2021, up from 3.2% before the pandemic, according to Black Knight.

It takes a considerable toll to juggle an unfavorable loan while holding on to your home, but it’s essential to understand how to seek underwater mortgage help.

What Is an Underwater Mortgage Exactly?

Your home’s worth can shift while you’re still paying it off. An underwater mortgage, or an upside-down mortgage, means you owe more on your home than it’s worth.

That puts homeowners in a poor situation: It affects their finances if they have to catch up on payments or hurts their chances of selling in the near future.

What Causes an Underwater Mortgage?

An underwater mortgage can happen in one of two ways: missed payments or a property value decrease.

Let’s start with missed payments. From the moment you start paying off your loan, a process called amortization starts. Essentially, when you pay your mortgage, it is in equal installments that are split between the principal and the interest.

During the early years, the bigger portion of your payment covers the interest. As time goes on, your amortization schedule dictates how to divvy up that installment, with more going to the principal eventually.

If you miss a payment, the interest will continue to build. Compounding interest makes it more difficult to pay off a loan since missing a payment forces you to make increased monthly payments that match the accumulated interest. Eventually, your home loan may go underwater.

Making payments depends on you, but a decrease in property value may be out of your hands thanks to market fluctuations.

Suppose you buy a house for $300,000. You put a down payment of $11,000 on it, and your lender approves a loan to cover the remaining $289,000. Sometime down the line, a few of your neighbors go to sell their homes. There is a lack of buyer demand, though. So the local homeowners lower their selling prices, which affects your property’s value. Now you have a mortgage balance of, say, $250,000 on a home that is only worth $200,000.

How Do I Know If I Have an Underwater House?

There are a few ways to determine if you have an underwater house or upside-down mortgage. You may have picked up on some of the tells in the previous section.

Those who fall behind early in their loan term may be more susceptible than others. You’ll know if your late payments have led to an upside-down mortgage if you compare your current and original principal.

If the current principal is higher than it was when you first took out the loan, and the home’s value has not grown, you’re underwater.

Another sign is property depreciation. Monitor property prices in your area since falling values around you will affect your home’s value as well. That can include your local neighborhood or the greater surrounding area.

You can use a real estate database to keep track or talk to a local real estate professional who can explain the current and projected market to you. After you know the approximate price of your home, you can compare it to the amount you still owe on your loan.

If you want a more exact evaluation of your home’s value, you can pursue an independent appraisal. A professional can come to your home and take stock of the property’s condition, then compare it to others in your area. If the appraiser’s estimate is lower than your remaining loan balance, you have an upside-down mortgage.

What Are My Options If My Mortgage Is Underwater?

It’s hard on any homeowner when faced with an underwater mortgage. Many people are emotionally attached to their home, making the issue even harder to work through.

Some options may suit you better than others, depending on your situation.

Stay in the Home

Numerous situations may put your house underwater. You may want to speak with your lender honestly about your struggle to keep up with the mortgage. The lender might have ways to help you avoid foreclosure such as a forbearance agreement, which would pause or reduce your payments for a limited time.

You may also be able to work out a repayment plan with your lender if you have fallen behind on your mortgage. Your lender will discuss the time frame and parameters necessary if you want to pursue this option. However, you’ll need to be in a financially stable position, with enough extra money at the end of the month to afford the add-on costs.

Then there’s the Department of Housing and Urban Development (HUD), which connects struggling homeowners with approved housing counseling agencies .

You can also visit consumerfinance.gov/mortgagehelp or call (800) 569-4287 and enter your ZIP code to find a HUD-approved housing counselor.

Refinance Your Mortgage

Most lenders require you to have a minimum amount of equity in your home before refinancing. Because of this, regular refinancing options won’t be available to you if you’re underwater. However, you may still use refinancing to improve your situation for loans owned or backed by Freddie Mac and Fannie Mae.

You can find out whether your mortgage is a Fannie Mae loan here or a Freddie Mac loan here .

Freddie Mac offers the Freddie Mac Enhanced Relief Refinance program, which may let you refinance your home loan at current interest rates if you have little to no equity. It’s designed for homeowners who don’t meet the qualifications for a typical refinance, but it still has requirements. For example, your mortgage payments can’t be 30 days delinquent within the past 12 months.

Fannie Mae’s take on the relief refinance program is the high loan-to-value refinance . Like Freddie Mac’s program, it allows borrowers who make on-time loan payments to change the terms of their loan. The program comes with its own rules and benefits comparable to Freddie Mac’s.

Sell the Home

Some individuals may have to face the possibility of selling their home. If you can’t financially recover enough to pay the current mortgage payments on top of the missed installments you have to catch up on, you could sell your underwater home and cover the difference with cash.

Or you could turn to a short sale as a solution. In a short sale, property is sold for less than the home seller still owes on their mortgage. The money earned from the sale is then used to pay off the lender as an alternative to foreclosure.

The lender is also a big part of the short sale process. You have to negotiate the terms with the lender, which must approve the sale before it goes through.

It’s also typical for the borrower to prove their financial struggles to the lender during the negotiation process. That may include a hardship letter and concrete documentation supporting their claim.

A short sale could help you avoid foreclosure, which could hurt your chances of getting a loan in the near future. A person with a foreclosure on their record usually has to wait from two to eight years to get a new mortgage, according to Nolo.

Try a Deed in Lieu

If you’re unable to make your payments and are upside down on the mortgage, you could consider asking your lender if a deed in lieu of foreclosure is an option.

If it is, you would submit documentation about income and expenses in an attempt to deed the house back to the lender so that no foreclosure takes place.

The lender might require you to first attempt a short sale or look into a loan modification.

A deed in lieu will usually, but not always, release you from all obligations and liability tied to the mortgage. If a deficiency results—the difference between the home’s fair market value and the total debt—the lender might try to hold you liable for the deficiency. You can ask to have the deficiency waived or try to negotiate a reduced amount.

A deed in lieu will hurt your credit but not as severely as a foreclosure would.

Allow Foreclosure

If you have no way to make up missed payments and the home is underwater, you might have to let the lender foreclose on the property.

While this may seem like an easy deal on the surface—you get to walk away from the home causing you trouble—it’s not so simple.

A foreclosure can cause your credit score to take a nosedive, which hurts your future chances of getting loans or lines of credit. Bad credit can affect other areas of your life, too. Credit comes into play when you apply for rental housing, get a cellphone contract, buy a car, or sometimes get a job.

If what you owe exceeds what the foreclosure sale brings in, the difference is a deficiency. In some states, the lender can seek a deficiency judgment to recover the deficiency.

All things considered, you may want to think of foreclosure as a last resort.

Avoiding an Underwater Mortgage

Some factors that contribute to an underwater mortgage are in your control, and some are not. Still, it’s better to preempt any possible situations that could lead you to have an underwater loan.

Staying alert can help you stay on track and avoid possibly damaging circumstances.

Make Timely Payments

Making payments on time will help you build equity and stay in a more secure position if property values drop. There are a couple of ways you can keep tabs on both your loan payments and your home’s worth.

Looking into rental or property-buying sites can help you get a perspective on your home’s current value. You can also check in to see how the market is fluctuating, which can help you predict any moves you may want to take in the future. Of course, researching the real estate market can also help you watch your home’s price.

Alternatively, if you want to track how your loan payments are going, you can view your amortization schedule or use an amortization calculator. Either is a valuable tool that can tell you where you currently are in your mortgage payments and where you will be in the future.

Assess the Market Before You Buy

Knowledge will always be one of your best shields against financial loss. It’s best to research and evaluate the market for an extended period before you buy a home.

You may want to look into the neighborhood surrounding your potential property as well as the greater local area. You want to ensure you buy in a location that won’t immediately drop in price after you make the purchase.

That is especially important if you intend to move again within a certain time frame.

A real estate agent can advise you on the current and predicted market conditions to help you make the choice best for you.

Refinance

Refinancing isn’t just an option for when you are already struggling to make payments. You know your financial situation better than anyone else.

If you think you may start to have trouble with your regular monthly installments but still retain some equity in your home, you may want to consider refinancing.

Even if you are not immediately at risk for an underwater loan, you may be considering the option to refinance your mortgage. Many borrowers may benefit from the chance to pay at a lower interest rate with more favorable terms.

The Takeaway

How to deal with an underwater house? First, denial or panic will not serve you well. The initial step most recommended is to call your lender early on to address your underwater mortgage. Then know your other options for contending with an upside-down loan.

If you would like to determine if you qualify for a lower rate and different term by refinancing your home, consider applying for a refinance with SoFi. The application process is simple and all online.

It might be prime time to check your rate on SoFi refi.



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.
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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Top 30 States With Foreclosures in April 2021

Despite the economic fallout and job loss from the pandemic, the number of US properties with foreclosure filings in April was 11,810, down 17% from April last year (when foreclosures dropped precipitously), according to ATTOM Data Solutions . This is likely thanks to the COVID-19 foreclosure moratorium for federally guaranteed mortgages, which has been extended to June 30, 2021. (Note: President Joe Biden’s executive order also extended the mortgage payment forbearance enrollment window to June 30, 2021.)

April foreclosures were also down, albeit slightly, from March, specifically 0.005%. Read on for the top 30 states with foreclosures in April 2021—plus top counties within those states.

States With the Highest Foreclosure Rates: 1 – 10

Two regions had seven of the top 10 states. The Midwest had three –Illinois, Indiana, and Ohio — while the South had four: Delaware, Florida, South Carolina, and Louisiana. The West Coast appears with California and the East Coast with New Jersey.

1. Delaware

Though the 6th least populated state in the country, Delaware ranks #1 for foreclosures with a foreclosure rate of 1 in every 5,700 homes in April. With a total 433,195 housing units, , the state saw a total 76 foreclosure filings (default notices, scheduled auctions, and bank repossessions). The counties with the most foreclosures per housing unit were (in descending order): Kent, New Castle, Sussex.

2. Nevada

Ranking 34th for population, Nevada is a close second with a foreclosure rate of 1 in every 5,738 homes. With a total 1,250,893 housing units, the state had 218 foreclosure filings in April. The counties with the most foreclosures per housing unit were (in descending order): Pershing, Nye, Lyon, Carson City, and Elko.

3. Illinois

The 6th most populated state, Illinois was third for most foreclosures. Of its 5,360,315 homes, 910 went into foreclosure–making the state’s foreclosure rate 1 in every 5,890. The counties with the most foreclosures per housing unit were (in descending order): Massac, Moultrie, Saline, Whiteside, and Livingston.

4. Florida

With the 3rd largest population in the country, Florida’s foreclosure rate of 1 in every 6,375 homes puts it in the number four spot. Of its total 9,448,159 housing units, 1,482 went into foreclosure. The counties with the most foreclosures per housing unit were (in descending order): Union, Suwannee, Baker, Putnam, and Holmes.

5. New Jersey

With the 11th largest population in the country, New Jersey is not very far behind Florida with a foreclosure rate of 1 in every 6,390 homes.. Of its total 3,616,614 housing units, 566 went into foreclosure. The counties with the most foreclosures per housing unit were (in descending order): Atlantic, Salem, Ocean, Gloucester, and Morris.

Recommended: Tips on Buying a Foreclosed Home

6. Ohio

Ranked the 7th most populated, Ohio was 6th with a foreclosure rate of 1 in every 7,195 homes. With a total 5,202,304 housing units in the state, the state had a total of 723 filings. The counties with the most foreclosures per housing unit were (in descending order): Marion, Seneca, Jackson, Cuyahoga, and Defiance.

7. Louisiana

Ranked 25th for population, Louisiana had 286 homes out of a total 2,059,918 go into foreclosure. That meant 1 in every 7,203 households went into foreclosure. The counties with the most foreclosures per housing unit were (in descending order): Webster, De Soto, Saint Tammany, Tangipahoa, and Saint Charles.

8. South Carolina

With 1 in every 7,425 homes going into foreclosure, South Carolina is in eighth place. Ranked 23rd for population,South Carolina has 2,286,826 housing units and saw 308 foreclosure filings. The counties with the most foreclosures per housing unit were (in descending order): Bamberg, Edgefield, Dorchester, Marion, and Lee.

9. Indiana

The 17th largest state by population, Indiana ranks 9th for foreclosures with 1 in every 7,616 homes. Of its 2,886,548 homes, 379 homes were foreclosed on. The counties with the most foreclosures per housing unit were (in descending order): Newton, Blackford, White, Starke, and Delaware.

10. California

Ranked 1st for most populated state, California is 10th for most foreclosures. It has 14,175,976 housing units, of which 1,540 went into foreclosure—making the state’s foreclosure rate 1 in every 9,205 households. The counties with the most foreclosures per housing unit were (in descending order): Plumas, Trinity, Humboldt, Shasta, and San Bernardino.

States With the Highest Foreclosure Rates: 11 – 20

Three Mountain states — Utah, New Mexico, and Utah– appear in this grouping. Meanwhile, the Northeast increases its numbers (Maine, Connecticut, and Pennsylvania) and the South continues to be a presence (Georgia, Alabama, and North Carolina).

11. Maine

Ranked as 9th least populated state, Maine saw a total 78 foreclosures in April. With a total 742,788 housing units, the state had a foreclosure rate of 1 in every 9,523 homes. The counties with the most foreclosures per housing unit were (in descending order): Washinton, Somerset, Penobscot, Androscoggin, and Oxford.

12. New Mexico

The 36th most populated state is 12th for foreclosures. Of its 937,920 homes, 91 went into foreclosure, making for a foreclosure rate of 1 in every 10,307 homes. The counties with the most foreclosures per housing unit were (in descending order): Hidalgo, Valencia, Chaves, Cibola, and Sandoval.

13. Iowa

The 30th most populated state has 1,397,087 homes, of which 134 homes went into foreclosure. That makes the state’s foreclosure rate 1 in every 10,426 homes. The counties with the most foreclosures per housing unit were (in descending order): Adams, Wayne, Mills, Montgomery, and Pottawattamie.

14. Utah

Of Utah’s 1,087,112 housing units, 99 homes went into foreclosure in April. The 31st most populated state’s foreclosure rate is 1 in every 10,981 households. The counties with the most foreclosures per housing unit were (in descending order): Emery, Duchesne, Wasatch, Tooele, and Salt Lake.
Recommended: What Is a Short Sale?

15. Georgia

The 8th most populated state, Georgia is 15th for most foreclosures. Of its 4,283,477 homes, 386 were foreclosed on. That puts the state’s foreclosure rate at 1 in every 11,097 households. The counties with the most foreclosures per housing unit were (in descending order): Polk, Mcduffie, Rockdale, Talbot, and Cook.

16. Connecticut

With 131 of its 1,516,629 homes going into foreclosure, Connecticut’s foreclosure rate is 1 in every 11,577 households. In the 29th most populated state, the counties with the most foreclosures per housing unit were (in descending order): Windham, Litchfield, Tolland, New Haven, and New London.

17. Alabama

Ranked 24th for most populated, Alabama is 17th for foreclosures. Of its 2,255,026 homes, 194 went into foreclosure, making for a foreclosure rate of 1 in every 11,624 homes. The counties with the most foreclosures per housing unit were (in descending order): Macon, Dale, Jefferson, Covington, and Crenshaw.

18. Alaska

Close on Alabama’s heels, Alaska’s foreclosure rate is 1 in every 11,654 homes. That puts the 3rd least populated state –with a total of 314,670 housing units and 27 homes in foreclosure — in 18th place. The counties with the most foreclosures per housing unit were (in descending order): Kodiak Island, Anchorage, Kenai Peninsula, Fairbanks North Star, and Matanuska-Susitna.

19. North Carolina

The 9th most populated state drops one place (from March) to 19th this month. North Carolina has 4,627,089 homes, of which 385 went into foreclosure in April. That means its foreclosure rate was 1 in every 12,018 homes. The counties with the most foreclosures per housing unit were (in descending order): Jones, Hoke, Craven, Bertie, and Onslow.

20. Pennsylvania

In the 20th spot for most foreclosures, Pennsylvania ranks as 5th for most populated–and has 5,693,314 homes. A total 435 went into foreclosure in April, making the state’s foreclosure rate 1 in every 13,088 households. The counties with the most foreclosures per housing unit were (in descending order): Luzerne, Delaware, Monroe, Chester, and Dauphin.

States With the Highest Foreclosure Rates: 21 – 30

The remaining states (21 to 30) in our rankings of the highest foreclosure rates are a mix of states mostly from the Northeast ( Massachusetts, New York, and Rhode Island) and the South (Oklahoma, Kentucky, and Texas). With Hawaii, the Pacifc region also appears.

21. Oklahoma

With housing units totaling 1,731,632, Oklahoma saw 132 homes go into foreclosure. As the 28th most populated, the state has a foreclosure rate of 1 in every 13,118 homes. The counties with the most foreclosures per housing unit were (in descending order): Woods, Nowata, Muskogee, Johnston, and Seminole.

22. Wisconsin

Though ranked as the 20th most populated state, Wisconsin’s total 205 foreclosures (out of 2,694,527 total housing units) puts it in 22nd place for most foreclosures. The state’s foreclosure rate is 1 in every 13,144 households. The counties with the most foreclosures per housing unit were (in descending order): Langlade, Richland, Pepin, Jackson, and Washburn.

23. Kentucky

With a total 1,983,949 housing units, Kentucky saw 146 homes go into foreclosure. That puts the foreclosure rate for the 26th most populated state at 1 in every 13,589 households. The counties with the most foreclosures per housing unit were (in descending order): Boyd, Campbell, Hardin, Greenup, and Powell.

24. Massachusetts

The 15th most populated state ranks 24th for foreclosures. Of its 2,897,259 housing units, 211 went into foreclosure, making for a foreclosure rate of 1 in every 13,731 homes. The counties with the most foreclosures per housing unit were (in descending order): Franklin, Berkshire, Worcester, Plymouth, and Hampshire.

25. Arizona

In Arizona, the 14th most populated state, there were 195 foreclosures (out of 3,003,286 housing units.) That puts its foreclosure rate at 1 in every 15,401 homes. The counties with the most foreclosures per housing unit were (in descending order):Mohave, Cochise, Yuma, Yavapai, and Maricopa..

26. Wyoming

Ranked the least populated, Wyoming came in as 26th for foreclosures. With 276,846 housing units and 17 homes in foreclosure, the state’s foreclosure rate was 1 in every 16,285 households. The counties with the most foreclosures per housing unit were (in descending order):Hot Springs, Sublette, Sweetwater, Campbell, and Fremont.

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

27. Hawaii

The 40th most populated state was 27th for foreclosures. Of 542,674 homes, 33 went into foreclosure, making for a foreclosure rate of 1 in every 16,445 households. The counties with the most foreclosures per housing unit were (in descending order):Kauai, Hawaii, Maui, and Honolulu.

28. Texas

Texas’s total number of foreclosures was only 645. But in a state with the 26th biggest population (and 10,937,026 housing units), that number put it in the 28th spot for foreclosures, making for a foreclosure rate of 1 in every 16,957 households. The counties with the most foreclosures per housing unit were (in descending order): Liberty, Crockett, Atascosa, Jones, and Hidalgo.

29. New York

With 481 of a total 8,322,722 housing units in foreclosure, New York’s total number was also in the low triple digits. But with a foreclosure rate of 1 in every 17,303 households, the 4th most populated state holds 29th for foreclosures. The county with the most foreclosures per housing unit was New York County, which is also Manhattan, and the zip codes were (in descending order): 10027 (Morningside Heights), 10035 (East Harlem), 10036 (West Midtown), 10022 (East Midtown), and 10011 (Chelsea).

30. Rhode Island

Last but not least, Rhode Island saw 26homes go into foreclosure in April. That nabbed the 8th least populated state as the 30th spot on our list. With 468,335 total housing units, the state’s foreclosure rate was 1 in every 18,013 households. The counties with the most foreclosures per housing unit were (in descending order): Kent, Bristol, Washington, Providence, and Newport.

The Takeaway

The Midwest has the smallest presence on our list with just four states. Of the top 30 states, California had the most number of foreclosures (1,540) and Wyoming had the least (17).

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What Is Monetary Policy?

Monetary policies are how a central bank or similar government organization manages the supply of money—as well as the interest rates—in an economy.

In the U.S. the central bank is known as the Federal Reserve. The Fed has a dual mandate: first, to maintain stable prices, and second, to promote full employment.

Read on to learn more about monetary policy and the integral role that the Fed plays.

Overview of Fed Monetary Policy

The U.S. Federal Reserve sets the level of the short-term interest rates in the country, which then has an impact on the availability and cost of credit. We’ll discuss how the short-term rates the central bank sets has a direct impact on a key interest rate for banks.

The Fed also has an indirect effect on longer-term interest rates, currency exchange rates, and prices of bonds and stocks, as well as other assets. Through these channels, monetary policy can influence household spending, business investment, production, employment, and inflation.

A country’s economy sometimes experiences inflation, which is when the prices of goods and services overall are rising. The central bank can use monetary policy to tame inflation, mainly by raising interest rates. In the U.S., inflation was rampant in the 1970s and early 1980s. Since then, consumer prices have stayed relatively stable.

In more rare instances, the economy has been in a period of deflation when overall prices have fallen. Then the central bank typically responds by loosening monetary policy, either by lowering interest rates or the more extreme measure of buying assets directly. A sharp period of deflation occurred after World War I, as well as during the first several years of the Great Depression.

Recommended: What Is Fiat Currency?

What Is the Fed Funds Rate?

The Federal Reserve System has a committee, the Federal Open Market Committee (FOMC), which meets several times a year to review key economic factors. The FOMC watches for signs of recession or inflation. It then sets what’s called the federal funds rate–what banks charge one another on an overnight basis.

It may seem counterintuitive that banks would loan money to each other, but here’s why they do. Banks are required to meet the reserve requirement set by the Fed. This is the smallest amount of cash a bank must have on hand, either in its own vault or in one of the regional Fed banks.

For example, the Fed, in the era of the housing bubble of 2008, lowered the federal funds rate to 0.25% to encourage banks to lend. This was part of the Fed’s strategy to mitigate the expanding financial crisis. In contrast to that rate, in 1980, the federal funds rate was 20%, the highest in our nation’s history.

Rates set by the Fed have an impact on the overall financial market. For example, when rates are low, it’s less expensive and easier to borrow, which can boost the market’s liquidity. Overall, when rates are low, the economy grows. When high, it typically retracts.

Recommended: Federal Reserve Interest Rates, Explained

How Monetary Policy Can Affect You

If a bank doesn’t have enough to meet its reserves, it borrows the funds from a bank with excess cash. The lending bank can benefit financially because it would earn interest in the amount of whatever the federal funds rate is that day.

This system helps ensure that each bank has enough cash on hand for its business needs that day, and it also caps that bank’s lending ability because the bank needs to keep a certain amount of cash in a vault, rather than lending it out.

Then, banks can decide to set their prime interest rates, or the rates that they charge their best customers—those who are considered low risk. So, if the federal funds rate goes up, your bank may decide to charge a higher interest rate on loans—if it goes down, a lower rate.

Moves made by the Fed can have a significant impact on the personal finances of people in the U.S. As the federal funds rate changes, it’s likely that banks’ prime rates will change in response—which in turn affects what consumers are likely to be charged on mortgage loans, car loans, personal loans, credit cards, and so forth.

This can affect consumers who owe money on a variety of loan types, but this is often more the case for people who have short-term variable interest rate loans. As the federal funds rate and the prime interest rates at banks go up or down, so can the monthly loan payment. In addition, a credit card rate could be tied to the prime rate plus a certain percentage.

Famous Fed Decisions

If you want information in significant detail, you can see meeting minutes from the Federal Reserve going back to 1936. You can also see the entire history of rate changes since 1954.

An entire book could be written about Federal Reserve policies and the Great Depression —a decade-long, deep economic downturn when production numbers plunged and unemployment figures skyrocketed. It’s been acknowledged that mistakes the Fed made contributed to this economic disaster.

During this time period, the Fed was largely decentralized and leaders disagreed on how to address the growing economic challenges. Some policies were implemented that unintentionally hurt the economy. The Fed raised interest rates in 1928 and 1929 to limit securities speculation, and economic activity slowed. The Fed made the same error in judgment in 1931.

In 1973, President Richard Nixon stopped using the gold standard to support the U.S. dollar. When inflation rates tripled, the Fed doubled its interest rates and kept increasing them until the rate reached 13% in July 1974. Then, in January 1975, it was significantly dropped to 7.5%.

This monetary policy didn’t effectively address the inflation, and in 1979, then Fed Chairman Paul Volcker raised rates and kept them higher to end inflation. This might have contributed to the country’s recession, but the inflation problem was solved.

Recommended: History of Fed

Monetary Policy vs Fiscal Policy

Both monetary policy and fiscal policy are tools government organizations use to manage a nation’s economy. Monetary policy typically refers to the action of central banks, such as changes to interest rates that then affect money supply. As mentioned, in the U.S. that would be the Federal Reserve.

Meanwhile, fiscal policy typically refers to tax and spending by the federal government. In the U.S., fiscal policy is decided by Congress and the presidential administration.

For instance, when the Covid-19 pandemic wreaked havoc on the U.S. economy, forcing many businesses to shut down, U.S. fiscal policy put together stimulus packages that included supplemental unemployment benefits, stimulus checks, and small-business loans. These measures were intended to prop up the economy during a difficult time.

In recent years, the rise and popularity of digital currencies like Bitcoin have spurred central banks to explore virtual money of their own. Central bank digital currencies (CBDC) are digital versions of the fiat currency issued by a sovereign nation. While such money is still in its early stages, the emergence of CBDC could give central banks a more direct way of implementing monetary policy in an economy.

Recommended: What Is a CBDC?

The Takeaway

Monetary policies are a key way that central banks try to influence a country’s economy. The main tools that central banks, like the U.S. Federal Reserve use are interest-rate levels and money supply.

On a macroeconomic level, monetary policy can be a powerful, important way to fend off recessions or tame inflationary pressure. On a more microeconomic level, the monetary policy interest rates that a central bank sets also affect loans that everyday consumers take from their banks.

Understanding how monetary policy works can help investors gauge the future of economic growth and consequently, the direction of financial markets. Central bank decisions and interest-rate changes have an impact on the prices of bonds, stocks and commodities. With SoFi Invest, investors can monitor price actions in all these asset classes using the Active Investing platform.

Get started investing with SoFi Invest today.


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