4 Types of Wills Explained: Which One is Right For You?

4 Types of Wills Explained: Which One Is Right for You?

Not all wills are alike; there are actually four main kinds and one of them is right for you. Sure, writing a will can be an easy task to put off until “someday.” But what if the worst were to happen before “someday?” That could mean a complicated and emotionally draining legal process for your loved ones. Creating a will not only can provide peace of mind for your loved ones after you die, but it can also provide peace of mind for you right now.

The simple definition of a will is a document that states your final wishes. This alone was sufficient a century ago, when many people had limited property to pass down. But in the modern era, when “property” encompasses everything from the contents of your long-forgotten storage unit to the crypto you decided to buy on a whim, a simple will may not encompass your complex life.

Not only that, but a will is a document that only takes effect after you die. But what if you were medically unable to make decisions? Modern end-of-life documents encompass your wishes if you were medically or otherwise unable to make decisions on your own. Among these documents is one that also has the world “will” in its name.

4 Kinds of Wills

As you begin estate planning, you’ll likely come across four common types of wills. These are:

•   A simple will

•   A joint will

•   A testamentary trust will

•   A living will

Let’s look at each type of will more closely.

What Is a Simple Will?

Like the name, a simple will may be the type of will that pops into your mind when you hear the word “will.” This will can:

•   State how you want your property bequeathed upon death

•   Provide guardianship specifications for minors

Upon death, a simple will is likely to go through a legal process known as probate to divide assets. Sometimes, in the case of high-net worth individuals, probate can be expensive. (For those with complex situations and a positive net worth, a trust can help handle those what-ifs. It can transfer assets out of your estate and into the trust, which can be advantageous in terms of taxes.) But in many situations, a simple will can provide peace of mind for people in good health. Later, these individuals may want to take on more complex estate planning, but a will provides a good foundation when it comes to making sure guardians are named and property is divided according to your wishes.

A simple will can be created through online templates, and the cost can be zero dollars to several hundred dollars. More expensive online options may come with support from an attorney who can help answer simple questions. Once created, a will then needs to be made legal according to state laws. This may include signing the will in front of witnesses. You may also want to have it notarized. Having a hard copy of the will, as well as people who know how to access it in case of your death, can ensure the will is found in a timely manner if you were to die.

💡 Quick Tip: We all know it’s good to have a will in place, but who has the time? These days, you can create a complete and customized estate plan online in as little as 15 minutes.

What Is a Joint Will?

A joint will functions in much the same way as a simple will, except it is a will created by two people, usually who are married to each other. It merges their wishes into a single legal document. In many cases, this kind of will dictates that property will be left entirely to the surviving partner. Here’s the catch, though: Upon death, property will be distributed in the manner dictated by the will — the surviving person does not have the ability or authority to make changes to what the will says once the initial spouse has died.

This can sound streamlined, especially if couples were planning to leave everything to each other anyway. But this type of will can cause headaches. For example, if the surviving spouse has more children or gets remarried, it can be almost impossible to provide for additional people not named in the initial, joint will.

There could be problems even if the surviving spouse does not remarry. For example, if the marital home is considered an asset to be given to the couple’s children upon the death of both of the will’s creators, it may be impossible for the surviving spouse to sell a home to downsize.

One alternative that may suit married couples is to create two individual wills. This may provide a greater degree of flexibility and better achieve the desired effect without ruling out all of life’s what-ifs.

What Is a Testamentary Trust Will?

A testamentary trust will is usually part of big-picture estate planning. It is a document that creates a trust that goes into effect when you die. This trust can outline how certain types of property will be divided. A testamentary trust can have certain stipulations (for example, someone only inherits X piece of property when they reach Y age). This can also be used for people with minors or dependents to help ensure that wishes are followed.

What’s more, a testamentary trust can also help provide for pets. Because a pet can’t own property, naming your “fur baby” within a will can set up a legal headache. But a testamentary trust can ensure that your pet will be provided for according to your wishes.

It’s worth noting that a testamentary trust will go through the probate process, and it may not have the same tax benefits for recipients as other types of trusts. Weighing the pros and cons of different trust options can be helpful before settling on the best one for your situation.

What Is a Living Will?

This is a hard topic to think about, but what if you were in an accident and were knocked unconscious? What if you were undergoing treatment for a serious medical condition and couldn’t fully grasp the options offered to you? There’s a way to put a trusted relative or friend in the decision-making role. A living will, which is also known as an advance directive, specifies your wishes if you were medically incapacitated or unable to make or communicate decisions about your medical care. It also stipulates who your healthcare proxy, also known as a medical power of attorney, would be to make medical decisions on your behalf.

If you are creating a living will, you may also want to create a power of attorney document as well. This designates a person, who may or may not be the same person as your healthcare proxy, who has the right to make financial decisions on your behalf. Having a living will can cover unexpected situations that may occur before death and can be an integral part of end of life planning.

💡 Quick Tip: It’s recommended that you update your will every 3-5 years, and after any major life event. With online estate planning, changes can be made in just a few minutes — no attorney required.

The Takeaway

While end of life planning can be a challenging or sad endeavor, it’s an important step in making sure your assets are directed where you want them to go and that other important wishes are executed as you want. There are four main types of wills to help you legally record your plans. You’ll have options; more than one may suit your needs. And you can decide to use online services or work in person with an attorney.

In either case, making a will can give you peace of mind right now — and help smooth things along for your loved ones in the future during a difficult time.

When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 15% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.

Create a complete and customized estate plan in as little as 15 minutes.

Photo credit: iStock/LaylaBird

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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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Guide to Mortgage Relief Programs

Whether a layoff, inflation, or other bugaboo is causing you to struggle with your mortgage payments, life rafts are available.

Options for people who need mortgage relief include forbearance, loan modification, and refinancing. Here’s a closer look at each option.

What Are Mortgage Relief Programs?

Relief programs don’t magically make monthly mortgage payments disappear, but they can pause or lower those payments.

Through a perennial form of mortgage relief, mortgage forbearance, borrowers facing financial troubles may be able to defer or trim payments short term.

It’s important to know that if you even anticipate a problem making a payment, it would be smart to contact your mortgage servicer (the company you send your mortgage payments to) immediately to talk about your options.

Tardy payments damage credit scores, and late payments stay on a credit report for seven years.

Catching a Break Through Mortgage Relief

The remedies for mortgage payment anguish come in several forms.

Forbearance at Any Time

While pandemic-related laws that required lenders to provide mortgage forbearance relief to struggling homeowners expired in April 2023, many lenders offer forbearance programs to borrowers on a case-by-case basis. If you’re dealing with a short-term crisis, you can reach out to your lender and ask for mortgage forbearance, to temporarily pause or lower your mortgage payments.

Many lenders will ask for documentation to prove the hardship. They also will want to know whether the hardship is expected to last for six months or less or 12 months.

During forbearance, interest accrues and is added to the loan balance. All suspended or reduced payments will need to be paid back.


Homeowners coming out of forbearance may find that it’s a good time for a mortgage refinance, aiming for a lower rate and possibly different repayment term.

When choosing a mortgage term, know that the longer the term, the lower the payments, in general.

It’s generally thought that you should have at least 20% equity in your home to refinance. Your debt-to-income ratio and credit will be assessed if you apply.

There are two refi options for low- to moderate-income homeowners whose current mortgage is owned by Fannie Mae or Freddie Mac. Fannie Mae’s RefiNow and Freddie Mac’s Refi Possible are designed to help those homeowners get better mortgage rates and reduce upfront costs.

Someone with a VA loan can look into an interest rate reduction refinance loan, and an FHA loan borrower may look into an FHA Streamline Refinance or standard conventional refi.

💡 Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).

Loan Modification

Homeowners who expect a permanent change in finances, or who are exiting forbearance but don’t qualify for refinancing, can ask for a loan modification.

Loan modification may result in a lower interest rate, a lower principal balance, an extension of the repayment term, or a combination.

You might have to prove the hardship to be approved.

Recommended: Loan Modification vs. Refinancing

Applying for Mortgage Relief

Again, when homeowners realize that they might have trouble making their monthly mortgage payment, they would be doing themselves a favor by contacting their loan servicer.

This applies to primary homes, multifamily property, and vacation homes.

Suffering in silence does no good. Working with your mortgage servicer could lead to one of the mortgage relief options described above or an agreement to try a short sale to avoid foreclosure.

A deed in lieu (an arrangement where you give your mortgage lender the deed to your home) is also sometimes used to avoid foreclosure.

Recommended: 6 Ways to Lower Your Mortgage Payment

What to Do During Forbearance

A homeowner in mortgage forbearance might want to keep track of the following:

•   Automatic payments. Any automatic payments or transfers to mortgage accounts should be paused by the borrower during the forbearance period. It’s unlikely the payments will be paused automatically, so it might be best to double-check.

•   Credit scores. On any loan, deferring payments shouldn’t affect credit scores, but homeowners might want to keep an eye on their scores in the event of an error.

•   Savings account. Now might be a good time to set aside any extra income to pay for the mortgage once forbearance ends.

•   Any changes to income. If a borrower’s income is restored during forbearance, they might need to contact their lender.

•   Property taxes and insurance payments. If homeowners insurance and taxes are paid through an escrow account, it should go into forbearance along with the mortgage. Homeowners who do not have an escrow account may be on the hook for those payments.

Homeowners interested in an extension of a forbearance period need to ask their mortgage servicer.

💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.

How to Repay Forbearance

Homeowners who received Covid hardship forbearance are not required to repay their paused payments in a lump sum when the forbearance period ends.

For those with Fannie Mae and Freddie Mac loans, options include a repayment plan with higher mortgage payments, putting the missed payments at the end of the loan, and a loan modification.

Borrowers with FHA loans can put the money owed into a no-interest lien that comes payable if they sell the home or refinance the mortgage. Or they can negotiate to lower their mortgage payments with a loan modification.

Options for USDA and VA loan repayment include adding the missed payments to the end of the loan, and loan modification.

In general, a homeowner can expect one of the following scenarios:

•   Repaying the forbearance amount in a lump sum.

•   An amount is added to the borrower’s monthly payment until the forbearance amount is repaid in full.

•   The forbearance amount is added to the end of the loan.

Recommended: Guide to Buying, Selling, and Updating Your Home

The Takeaway

Federal mortgage relief programs help homeowners who are experiencing hardship. General mortgage forbearance is possible during most any household setback. Refinancing could be an answer for some borrowers who are coming out of forbearance.

SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.

A new mortgage refinance could be a game changer for your finances.

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Throwing a Gender Reveal Party on a Budget

6 Cheap Gender Reveal Ideas for Those on a Tight Budget

Congratulations! If you’re reading this, it probably means you or someone you care about is starting a family (or adding to one). One popular way to celebrate is with a gender reveal party: It’s a fun way to get all the expectant parents’ loved ones involved before the new addition arrives.

But gender reveal parties, like any kind of get-together, can quickly get expensive. Renting a space, ordering flowers and decorations, and wrangling the menu can add up. Which can be an issue, especially if the couple that is expecting or the person hosting is trying to also save for, say, the baby’s nursery or a baby shower.

So read on for six gender reveal party ideas that will be a fun way to share the news without breaking the bank.

Cheap Gender Reveal Ideas

When ​​saving for a baby, it’s vital to protect your finances, even during celebrations. Sure, you want to share the excitement in a stylish way, but there are cribs, strollers, and lots of diapers to be bought! To help you pull off a gender reveal on a budget, read on.

💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.

1. Keep It Small

You can save money by downsizing your event. Instead of inviting anyone and everyone, try including just friends and family. Not only will a smaller party keep costs low, but it will make the event more personal and a whole lot less frantic. An intimate gathering with those closest to you can be a lovely way to celebrate learning a baby’s gender. Plus, it allows the host or guest of honor to get more quality time with each invitee.

However, you may want to run this by the expectant mother if you are organizing the party on her behalf. She should have the last say about the invite list so that no one significant gets missed.

2. Choose a Cheap or Free Venue

You can hold a gender reveal party anywhere. When you think about it, it’s a very accommodating event without a lot of rules about the dress code, timing, or the activities involved. So, you can likely make any location work, whether it’s at home, a local restaurant, or elsewhere.

•   Be creative with the location. Instead of a full (pricey) restaurant meal, could you host a party at a local coffee bar (some host events)? Or could you do an afternoon tea at a favorite eatery, before they open for dinner? These kinds of options can help you save a considerable amount of money.

•   When picking where to have the party, you may need to factor in the size of your guest list and the type of gender reveal you want. For example, if you plan to use a gender-reveal powder cannon, you probably need a venue outdoors.

•   Rented venues can be expensive, so for a gender reveal on a budget, consider hosting at home.

•   Look at other cheap locations like a nearby green space. Many gender reveal parties are happily hosted in a local park. You bring cushions, a picnic blanket, and all the trimmings, and you’re set, without the cost of renting.

3. Send Digital Invites

Invitations are where many people let their creativity shine. But physically mailing them out may not be the most cost-effective option; you’ll have to buy the cards and spend money on postage, too. If you are looking for a way to send fun invites but for a fraction of the price and time, consider digital versions.

•   There are apps and websites that offer digital invite services. You can find a wide range of gender-reveal invitation templates on them. Spend a few minutes scrolling; you may find some totally free options, or you might spend anywhere from $10 to $20 on them. You can also find fun graphics and animations to make them unique.

•   These resources make planning a party more straightforward for the host. That’s because they usually come with a function that lets guests RSVP digitally, so you can keep track of who is coming. You can also usually automate updates and reminders.

•   Where to start? Try exploring Punchbowl, Evite, and Paperless Post for some great evite options.

4. Make Your Own Decorations

Similar to birthday parties, a gender reveal party isn’t complete without a few decorations. Here are some ways to keep costs down:

•   Easy DIY décor can include banners, streamers, candles, and table centerpieces. Often, you only need cardstock, ribbon, and paper to get creative. You might also be able to find printable images online. Sayings like “Whether pink or blue, we love you” and the like can be a fun way to underscore the reason everyone has gathered.

•   Use what you already have — outside. Anyone with a green thumb can take advantage of their garden to liven up their party. You can set the whole event up outdoors if the weather is nice or use flowers to decorate your home. For example, fresh flowers in mason jars or dollar-store vases are a simple but effective centerpiece.

•   A quick reminder: Even if the parents know the gender already, decorations shouldn’t give it away. Instead, aim for a gender-neutral look or a mix of pinks and blues so that nothing spoils the surprise.

5. Do a Potluck

Hosting a gender reveal party that includes a meal can get very pricey, very fast. No matter the size of your guest’s appetite, you have to purchase food per head. Some recommend around a half-pound of meat and half a bottle of wine for each person at an event. That alone could rack up a bill equal to a few months’ worth of baby supplies.

Instead, consider a potluck.

•   A potluck can save you significant costs in the food department.

•   It’s a great way to bond as a community or family. Everyone plays a role. You may find that having a number of people contributing makes the endeavor more creative.

•   Hosting a potluck does take a bit of organization to make sure, say, that not everyone brings a dessert, but the savings and sense of teamwork may be well worth it.

6. Opt for These Ways to Do the Reveal

The most important part of a gender reveal party is the reveal itself. But, you don’t have to pay for expensive fireworks, a band, or an entire room of balloons to make a statement. Some budget-friendly ideas include:

•   Gender reveal confetti or powder cannons

•   A giant balloon filled with colored confetti; pop it to reveal the gender

•   Cupcakes or cake with the gender color inside

•   A pinata filled with either pink or blue ribbons and glitter

You can also set the stage with color-themed food and drink. Some hosts like to have pitchers of fun fruit drinks, one tinted pink and the other blue with berries.

Recommended: A Guide to Using Savings Clubs

Setting Your Gender Reveal Party Budget

Your budget will obviously vary with the type of party you are planning. If you have a backyard potluck for 10 close friends it will, of course, be much more affordable than a meal for a few dozen guests at a rented space.

For example, let’s say you choose a large venue; that alone may cost you upwards of $200 to rent. In addition, decorating the location may be expensive, anywhere from $50 to $100 and up. That’s because there is more space to cover than your garden or living room. Plus you’ll need to factor in the food as well. Ka-ching! And double ka-ching if you live in a major city; your costs are likely to be higher.

That said, only you and your loved ones know what will be the right way to celebrate the upcoming birth. Just like putting together a budget for a baby, be methodical.

Budget Beforehand

Sit down early in the planning process and create a budget for your party. If there is more than one host, pool your resources and determine the total you can spend. It’s essential to do this before you start party planning.

•   Go line by line, item by item. Write down what you need and estimate the cost. That way, you know exactly what you need to buy and how much it will cost. Otherwise, there’s every chance that you’ll discover your cheap gender reveal party wound up being a high-cost celebration.

•   Understand where the funds are coming from. Is the expectant couple or individual footing the bill? If you are organizing, who else might contribute? Sometimes family members of the parents-to-be are also willing to help. They may contribute some cash or offer to bring items to the event.

Stick to Your Budget

It sounds self-explanatory: Stick to the budget you make. However, any party planner knows that it’s easier said than done, whether you have a baby shower, birthday, or anniversary on your hands.

•   Hold yourself and the team that’s organizing the event accountable. It’s very easy to dip a little further into your funds for extra decorations, more flowers, or a beautifully decorated dessert. While those gestures are nice, they come at a financial cost. You may need to separate your “party fund” from your savings account. Or, if you have a co-host, report your spending to each other. You’ll be less inclined to go overboard that way.

•   Play around with your distribution of funds. For instance, maybe you have a baker in the family who can bake a fab gender reveal cake. In that case, you can put more money toward a venue. Or, perhaps you are hosting a potluck version of a gender reveal party. That frees up some cash for decorations or how you handle the big reveal.

It’s a balancing act, for sure, but with a little planning and a strong commitment to your budget, you can host a gender reveal party that won’t leave you with debt to pay off.

Recommended: Budgeting for Beginners

The Takeaway

Hosting a gender reveal on a budget may take a bit of extra planning. But spending less won’t make the event any less memorable. Instead, think of it as an opportunity to test your creative muscles and come together as loved ones. Play around with your budget to find the best party plan. Maybe you host it at a restaurant but it’s a tea party instead of a full meal. Or perhaps you gather in someone’s yard or a local park and then have enough to splurge on an amazing cake. It’s all about balance.

Whether you’re expecting a baby or simply planning a party for one of your besties, life is expensive. That’s why finding a banking partner that offers competitive interest rates and low (or no fees) can be important.

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

Better banking is here with up to 4.60% APY on SoFi Checking and Savings.


What is a good budget for a gender reveal party?

Budgets will vary depending on the host’s means and goals and the expectant parents’ desires. However, you can stretch a fund further with a more relaxed event. For example, a small barbecue in your backyard with a few friends won’t cost as much as a luxe rented location but may make up for that with the warm, intimate vibe.

Who usually throws a gender reveal party?

There is no norm; anyone can throw a gender reveal party, from a close family member to the parents to a best friend. It’s all good! In some cases, there are even multiple hosts. This allows everyone to take on a smaller financial burden than a singular host. The only rule is to keep the gender a secret during planning.

How much should a gender reveal cake cost?

The cost of gender reveal cake can vary in price depending on where you buy it, how big it is, and how ornate it is. Prices often land in the range of $25 to $50. However, features like surprise candy inside will likely run you more money. And if you purchase a cake from a highly rated patisserie in a big city it will probably be considerably more expensive than one at a local bakery in the suburbs.

Photo credit: iStock/Ievgeniia Shugaliia

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SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

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Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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, products, or companies 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 Part-Time Students Have to Pay Back Student Loans?

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

One question that can come up for part-time students is whether they need to pay back student loans if they’re not attending classes full time. In short, if a student meets their school’s requirements for half-time enrollment, they are generally not required to make payments on federal student loans. Private student loans have their own terms and depending on the lender, students may be required to make payments on their loan while they are enrolled in school.

Part-time college enrollment is expected to increase 10% by 2031. Students may be part-time because of financial reasons, caregiver or parental duties, medical issues, or other reasons, but for all scenarios, balancing college with other duties and needs can be a struggle.

What Is a Part-Time College Student?

A part-time college student is someone who is not taking a full course load during any given academic quarter or semester. Individual schools set the standards for what counts as a full- or part-time student, but in general, full-time students may take about 12 credits or four classes at a time.

Part-time students may take anywhere from six to 11 credits or two to three classes per academic period.

Students may choose to attend college part-time in order to take care of family obligations, work a day job, or because of other circumstances that don’t allow them to take four classes at one time.

Repaying Student Loans as a Part-Time Student

In general, part-time students may not need to pay back their federal student loans while they are attending school as long as they don’t drop below half-time enrollment — or as long as they haven’t graduated.

What does this mean in practicality? If you’re a part-time student and you are taking at least half of the full-load credit hours, you generally won’t need to start paying off your federal student loans until you graduate, withdraw, or drop below half-time enrollment. Federal loans also come with a grace period, meaning you technically won’t be required to make payments for six months after graduating, withdrawing, or dropping below half-time enrollment.

For example, if a full course load at your school is 12 credits, and you’re taking six credits this semester, you are still enrolled at least half-time, and wouldn’t normally be required to start paying back your federal student loans.

If, however, you drop down below half-time enrollment by taking only one three-credit class, you would no longer be attending school at least half-time and may be required to start paying off your federal student loans.

💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.

When Do I Have to Start Paying Back My Student Loans?

If you are a part-time student who graduates, withdraws, or drops below half-time enrollment, you may not need to start paying back your federal student loans right away. Many new grads, or those entering a repayment period for the first time, are given a six-month grace period, as mentioned above, before they have to start paying federal student loans back.

The exact length of any grace period depends on the type of loan you have and your specific circumstances. For example, Federal Direct Subsidized Loans and Direct Unsubsidized Loans all have a standard six-month grace period before payments are due.

Factors That May Influence the Grace Period

If you’re a member of the armed forces and are called to active duty 30 days or more before your grace period ends, you could delay the six-month grace period until after you return from active duty.

Another situation that could impact your grace period is if you re-enroll in school at least half-time before the end of the grace period. You will receive the full grace period again on your federal student loans when you graduate, withdraw, or drop below part-time enrollment.

This is because, in general, once you start attending school at least half-time again, you’re no longer obligated to start making payments on federal student loans. In this situation, you would still get a grace period after you graduate, even though you may have used part of a grace period while you were attending school less than half-time. Note that most loan types will still accrue interest during the grace period.

You may lose out on any grace period if you consolidate your federal student loans with the federal government during your grace period. In that scenario, you’ll typically need to start paying back your loan once the consolidation is disbursed (paid out).

Repayments for Private Student Loans

If you have private student loans, don’t count on getting a grace period before you start paying back your loans. Student loans taken out from private lenders don’t have the same terms and benefits as federal student loans, which means that private student loans may not offer a grace period at all or it may be a different length than the federal grace period.

Some lenders may require students make payments on private student loans while they are enrolled in school. If you have a private loan or are considering a private loan, check with the lender directly to understand the terms for repayment, including whether or not there is a grace period.

How Do I Pay Back My Student Loans?

There are things you can do to make paying back your loans as painless as possible. When you enter loan repayment on a federal student loan, you’ll be automatically enrolled in the Standard Repayment Plan, which requires you to pay off your loan within 10 years.

However, there are other types of federal student loan repayment plans available, including income-driven repayment plans like the SAVE Plan and loan forgiveness programs for public service, and it is always worth learning about the different plans so you can make an educated choice.

Recommended: Student Loan Forgiveness Guide

As mentioned, private student loans have different requirements than federal student loans. Individual lenders will determine the repayment plans available to borrowers.

Take a Look at Refinancing

One option you may want to consider is refinancing your student loans with a private lender. Refinancing your student loans allows you to combine your federal and/or private student loans into one new, private loan with a new interest rate and new terms.

It’s important to remember, however, that student loan refinancing isn’t right for everyone. If you refinance your federal loans, they will no longer be eligible for any federal repayment assistance, such as the Public Service Loan Forgiveness (PSLF) program or income-driven repayment plans.

The Takeaway

Part-time student loans who are enrolled at least half-time, based on the definition at their school, are generally not required to make payments on their federal student loans. Private student loans have terms and conditions that are set by the individual lender, and may require students make payments on their loans while they are enrolled in school.

If your student loan payments are due and you’re hoping to lower your interest rate or monthly payment, consider refinancing them with SoFi. (You may pay more interest over the life of the loan if you refinance with an extended term.) SoFi offers an easy online application, competitive rates, and no origination fees. It takes just two minutes to fill out an application and your credit score will not be impacted during the prequalification stage.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

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

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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 a $200,000 Mortgage Will Cost You

A $200,000 mortgage might cost you more than twice that amount over the course of the loan’s lifetime. That’s thanks in part to the way banks amortize, or parse out the balance of interest to principal in each payment. Of course, how much your specific $200,000 mortgage will cost is a more complicated equation, since personal financial factors like your credit score and debt level will affect your interest rate. And your interest rate, in turn, will affect your total mortgage cost.

Read on for a peek into the mortgage payment on $200K, including sample amortization tables, how much your monthly payment might cost, where to find a loan, and more.

Here’s What a $200,000 Mortgage Costs

When you take out a loan of any kind, the lending institution — often a bank — charges you for the service of giving you the money you need up front. When you repay a loan, you’re repaying both principal (the money you borrowed) and interest (the money the loan servicer is charging you).

Interest is expressed as a rate in the form of a percentage. Higher interest means you’re paying more for the loan — and lower interest, of course, means you’ll pay less. The lowest interest rates are reserved for buyers with the best financial profiles, which may include factors like robust and steady income, a good or excellent credit score, and a low level of existing debt (another factor lenders express in the form of a percentage: DTI, or your debt-to-income ratio).

With all that said, let’s say you take out a $200,000 mortgage to pay for a house that costs $275,000. In this example, you’d have made a down payment of $75,000, or just over 27%. Over the course of a 30-year mortgage term, with a fixed interest rate of 6%, you’d pay almost $232,000 in interest — along with the principal repayment, of course, bringing your total amount paid to almost $432,000. You’ll notice that figure is more than double the original $200,000 you borrowed, and this example doesn’t even include additional fees like property tax or homeowners insurance.

However, interest rates are very powerful here, and even a small decrease in interest can have a big effect on the overall loan cost. For example, imagine everything we’ve just described above remains the same, but your interest rate is 4% rather than 6%. In that scenario, your total interest would be about $143,000, representing a savings of around $90,000. (Insert shocked emoji.)

As you can see, finding the most favorable interest rates possible is really worthwhile for homebuyers. If this is your first time in the home market, a home loan help center can educate you about the buying process.

💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

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

How Much Are Monthly Payments for a $200,000 Mortgage?

Maybe you’re less concerned about how much your $200,000 mortgage will cost you over the long term but are curious about the monthly payment on a $200K mortgage. Again, interest rates have a big effect on monthly mortgage payments, as does the loan’s term (how long you have to repay it). Still, we can offer a few examples.

For a 30-year $200,000 mortgage at a fixed interest rate of 7%, your monthly payments would be about $1,330 (though this figure doesn’t include property taxes or homeowners insurance, which could push your payment hundreds of dollars upward).

For a 15-year $200,000 mortgage with the same interest rate, your monthly payments would be about $1,797 (again, without additional costs included).

You can get more specific figures customized to your circumstances using a mortgage calculator or home affordability calculator online.

Where You Can Get a $200,000 Mortgage

There are ways to get a $200,000 mortgage if you’re sure you’re ready for one. Private banks, credit unions, and lenders who specialize in mortgages are all available to meet your request. You can usually do most of the application online.

One caveat: As we’ve seen above, interest rates can make a huge difference when it comes to the cost of your mortgage over time. Although market factors have a big influence on interest rates, your personal markers also matter, so getting your financial ducks in a row as possible before applying could help you save money in the long run. (So can finding an affordable place to live in the first place.) Additionally, you may want to ask for prequalification quotes from a variety of lenders to see who can give you the best deal.

Recommended: Tips to Qualify for a Mortgage

What to Consider Before Getting a $200,000 Mortgage: Amortization

Remember how we were talking about amortization above? In most cases, lenders amortize loans in such a way that, toward the beginning of the loan, the bulk of your payments are going toward interest. (Although your fixed monthly payments never change, the proportion of how much of that amount goes toward interest versus principal can.)

To understand how this can impact your ability to build equity, we’ve included the following sample amortization schedules for two different types of mortgage loans below. As you’ll see, the remaining principal balance goes down far more slowly than the amount you pay in. For example, in the chart below, although you’d pay a total of almost $16,000 toward your mortgage, the principal only reduces by about $2,000 because nearly $14,000 of your payments go toward interest.

Amortization Schedule, 30-year, 7% Fixed

Years Since Purchase Beginning Balance Monthly Payment Total Interest Paid Total Principal Paid Remaining Balance
1 $200,000 $1,330.60 $13,935.64 $2,031.62 $197,968.38
3 $195,789.89 $1,330.60 $13,631.29 $2,335.97 $193,453.93
5 $190,949.09 $1,330.60 $13,281.35 $2,685.91 $188,263.18
10 $175,432.38 $1,330.60 $12,159.65 $3,807.61 $171,624.77
15 $153,435.50 $1,330.60 $10,933.39 $5,033.87 $153,435.50
20 $129,388.32 $1,330.60 $8,831.12 $7,136.14 $122,252.17
30 $15,377.96 $1,330.60 $589.30 $15,377.96 $0.00

As you can see, even 20 years into the loan’s 30-year lifespan, you’ll still be paying more toward interest than principal (though the proportion will be much closer to 50/50 than at the beginning of the term).

Next, let’s look at what happens when the home mortgage loan term is reduced to 15 years.

Amortization Schedule, 15-year, 7% Fixed

Years Since Purchase Beginning Balance Monthly Payment Total Interest Paid Total Principal Paid Remaining Balance
1 $200,000 $1,797.66 $13,752.28 $7,819.60 $192,180.40
3 $183,795.53 $1,797.66 $12,580.86 $8,991.02 $174,804.51
5 $165,163.53 $1,797.66 $11,233.95 $10,337.93 $154,825.60
7 $143,740.35 $1,797.66 $9,685.27 $11,886.61 $131,853.74
10 $105,440.55 $1,797.66 $6,916.57 $14,655.31 $90,785.24
12 $75,070.50 $1,797.66 $4,721.12 $16,850.76 $58,219.74
15 $20,775.73 $1,797.66 $796.15 $20,775.73 $0.00

As this chart shows, a mortgage loan with a shorter term can help you build equity more quickly: Notice how principal and interest payments are much closer to equal just five years in, or a third of the way through the loan. Keep in mind that this ability comes at the cost of a higher monthly payment, though, so it may not be possible for all — especially first-time homebuyers who may struggle to meet higher mortgage payments.

💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.

How Do I Get a $200,000 Mortgage?

Taking out a $200,000 mortgage is a fairly simple process these days. In most cases, your lender can pre-qualify you online or over the phone. While applying for your official approval will take a few more steps, including providing documentation like income verification and tax returns, you can still be approved in as little as a business day—and ready to take over the keys to your dream home.

To get started, reach out to the lender you’ve chosen to learn more about their process. They may make it simple to start your application online. Just don’t forget that interest adds up, and amortization can make it more difficult to build equity quickly. It’s worth checking in to ensure your lender doesn’t charge an early repayment penalty, and that they make it simple to pay additional principal if you’re able.

Recommended: The Cost of Living By State

The Takeaway

Because of interest, a $200,000 mortgage might cost more than $200,000 on top of the principal you borrow. It all depends on your loan term as well as your specific rate — which in turn depends on your financial standing.

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

SoFi Mortgages: simple, smart, and so affordable.


How much does a $200K mortgage cost each month?

With a fixed rate of 7%, a 30-year $200,000 mortgage will cost about $1,330 per month before additional fees, and a 15-year $200,000 mortgage at the same rate will cost closer to $1,800. If your down payment is less than 20% you will likely have to pay for mortgage insurance as well, not to mention property taxes and insurance.

How much income is required to qualify for a $200,000 mortgage?

An income of around $65,000 is in the right ballpark to qualify for a $200,000 mortgage. Income is far from the only important factor lenders consider when qualifying you for a loan, however, and even those who make substantial income may not qualify if they have high levels of debt or other negative factors.

How much is the down payment for a $200,000 mortgage?

Down payment amounts can vary substantially. Some loans allow you to put down as little as 3.5%, which, for a $200,000 home would be $7,000. To avoid having to pay for mortgage insurance, you’d want to put down at least 20%, which is $40,000.

Can I afford a $200K house with a salary of $70K?

What you can and can’t afford is a complex calculation that depends on your lifestyle, where you live, and more. That said, $70,000 is within the feasible range to take out a $200,000 mortgage, particularly if you choose a longer loan term.

Photo credit: iStock/skynesher

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

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

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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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