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Buying a home is a major responsibility. If you’re unable to continue paying the mortgage on your house, what happens next? You’ve heard of foreclosure, which can result in losing your home and be financially damaging. But there’s another option called a deed in lieu of foreclosure, which may be less stressful than foreclosure, could have less negative impact on a credit report, and might be faster to complete.

Note: SoFi does not offer a Deed in Lieu at this time.

Here’s what you need to know about a deed in lieu of foreclosure, and when it might be an option to consider.

What Is a Deed in Lieu of Foreclosure?

While a foreclosure may involve the court and a lengthy process, the alternative, a deed in lieu of foreclosure, is fairly simple.

If your lender agrees, you hand over the deed to them and the lender releases the lien on the property. You may be released from any balance you owed on the mortgage (however, there may be exceptions if you owe more than the home is worth).

And while a deed in lieu will appear on your credit report, it doesn’t have as severe an impact as a foreclosure.

The lender might even offer you financial assistance to relocate or let you rent temporarily while you find a new place to live.

Recommended: Tips On Buying a Foreclosed Home

Working With the Lender

Your lender may only consider a deed in lieu of foreclosure in certain situations.

For instance, the lender might require that you first put your home on the market as a short sale or explore a loan modification.

If you’re completely unable to pay, start by contacting your lender and asking if a deed in lieu of foreclosure is an option. If it is, you’ll be given an application and asked for documents proving your inability to pay the mortgage. The documents will show your income and expenses, as well as bank account balances.

This process can take 30 days or more.

If your application is approved, you may want a real estate lawyer to review it to help you understand whether you are fully released from the financial obligations tied to the mortgage. For example, if the lender sells the home for less than the remaining mortgage balance, are you responsible for that deficiency?

Once you are comfortable with the title-transferring agreement, you and the lender will sign it, and it will be notarized and recorded in public records.

At this point, you will be notified how long you have to leave the home.

When to Consider a Deed in Lieu

One instance when a deed in lieu may be a good idea is if you owe more on your home than it is worth, as long as the agreement stipulates that you won’t owe the difference between the value of the home and what you owe.

If you are unable to continue paying your mortgage, it’s important to know that a foreclosure will leave a nasty mark on your credit report for seven years and make it difficult or impossible for you to take out another mortgage for years.

A deed in lieu will appear on your credit report, but it may not have the same lasting effect. Your credit score will drop, but in the long term, it may not affect your ability to take out a loan.

Benefits of a Deed in Lieu

There are advantages for both the borrower and the lender when it comes to a deed in lieu. For both, the big benefit is not having to go through the long and expensive process of foreclosure.

Because a deed in lieu is an agreement between you and the lender and not an order from a court, you may have a little more flexibility in terms of when you vacate the property.

With foreclosure, you are sometimes forced to vacate within days by local law enforcement. With a deed in lieu, you may even be able to work out an arrangement where you rent the property back for a period. The lender gets a little rent money and you have more time to figure out your next move.

In addition, this option is more private than a foreclosure.

From the lender’s perspective, the benefits of a deed in lieu include avoiding litigation and court time.

Drawbacks of a Deed in Lieu

There are disadvantages as well. A deed in lieu will appear on your credit report, even if it’s not as damaging as a foreclosure. Plus, it may still be difficult to get another mortgage in subsequent years. Many lenders won’t issue you a mortgage until at least four years after your deed in lieu, and government-backed programs typically treat it as a foreclosure.

If you owe more than your home is worth, you may still be on the hook for the difference between the appraised property value and what you owe.

You may be denied a deed in lieu if there are other liens or tax judgments on the property, or if the home is in bad condition and requires maintenance to sell.

Recommended: Home Affordability Calculator

Being Smart About Your Mortgage

The best thing to do, if at all possible, is to avoid getting into a situation where you can’t afford to pay your mortgage. If you’re having short-term financial issues, talk to your lender immediately to see if there is the possibility of delaying a few months’ payment or setting up a loan modification so you can work to pay off your outstanding debt.

Typically, the lender will want to help you; it’s easier to work out an agreement now than several months down the road, when you haven’t paid your mortgage at all and are facing foreclosure.

If you do end up in a situation where you are unable to continue paying your mortgage and you aren’t offered options, consider a deed in lieu of foreclosure as a faster and easier solution than a foreclosure.

If you’re just starting to consider buying a home, create a budget and calculate how much in mortgage payments you can afford each month. Don’t forget to calculate insurance and interest as well. Make sure that you won’t be stretched thin financially.

Recommended: Mortgage Calculator

The Takeaway

If you can’t pay your mortgage and you’re unable to get a short sale or loan modification approved, a deed in lieu of foreclosure may be the best option. Rather than go through the foreclosure process, a deed in lieu allows a borrower to sign a property over to the lender. Your credit will take a significant hit, though not as bad as with a foreclosure.

FAQ

Does a deed in lieu of foreclosure affect your credit score?

A deed in lieu of foreclosure will typically have a negative effect on your credit scores, but a foreclosure would affect it even more severely. Your mortgage will be listed as closed and have a balance of zero, but it won’t be shown as paid in full and can remain on your credit report for up to seven years. Your credit score will probably be affected as long as the mortgage remains on your report.

Why do lenders prefer a deed in lieu of foreclosure to a foreclosure?

There are several reasons why a lender may prefer a deed in lieu of foreclosure to a foreclosure. A deed in lieu lets them avoid litigation, which can be lengthy and expensive. Furthermore, in a foreclosure, the property may remain vacant for an extended period and deteriorate, but a lender will want the property in good condition so it will be easier to sell.

Can you buy a house after a deed in lieu of foreclosure?

After a deed in lieu of foreclosure, you may need to wait several years before you can get a mortgage again. Many lenders won’t issue you a mortgage until at least four years after your deed in lieu, and government-backed loan programs generally treat a deed in lieu the same way they would an actual foreclosure, with a waiting period of several years, depending on the loan type.

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

SOHL-Q225-167

There are many reasons why you might need to hire a lawyer, from purchasing real estate to launching your own business to getting a divorce. When these moments hit, it’s time to get a good attorney involved to help you sort out the situation.

However, hiring a lawyer can take some know-how, and if it’s your first time tackling this, you may need some guidance. Personal referrals may be a good place to start, but it’s also vital to work with an attorney who has expertise that’s relevant to your particular legal situation.

Fortunately, there are plenty of resources that are available to help you find the right professional at the right price. Here are some tips and tactics to help you navigate the process of hiring an attorney.

Finding the Right Attorney

Most lawyers concentrate in a particular legal specialty (such as family law or personal injury law), so it’s important to find a lawyer who not only has a good reputation, but also has expertise and experience in the practice area for which you require their services.

Below are some simple ways to begin your search.

Word-of-Mouth Referrals

One of the best ways to find a lawyer is through word of mouth. Ideally, your family and friends may have worked with someone that they can refer you to. Better still if their situation is similar to yours.

But even if a recommended lawyer doesn’t have the right expertise, you may still want to contact that attorney to see if they can recommend someone who does.

You might consider asking your accountant for a recommendation as well, since these two types of professionals often refer clients back and forth.

Recommended: How Much Does a Will Cost?

Local Bar Associations

Your local and state bar associations can also be great resources for finding a lawyer in your area. County and city bar associations may also offer lawyer referral services to the public (though they don’t necessarily screen for qualifications).

In addition, the American Bar Association maintains databases to help people looking for legal help.

Your Employer

Many companies offer legal services plans for their employees, so it’s worth checking with your human resources department to see if yours does.

You’ll want to understand the details, however, before you proceed. Some programs cover only advice and consultation with a lawyer, while others may be more comprehensive and include not only advice and consultation, but also document preparation and court representation.

Legal Aid or Pro Bono Help

Those who need a lawyer but can’t afford one may be able to get free or low-cost help from the Legal Aid Society. You can often find out who to contact by searching online and typing “Legal Aid [your county or state]” in your computer’s search bar.

Consider reaching out to local accredited law schools as well. Many schools run pro bono legal clinics to enable law students to get real world experience in different areas of law.

Recommended: Easy Ways to Save Money

Online Resources

There are a number of online consumer legal sites, such as Nolo and Avvo, that offer a way to connect with local lawyers based on your location and the type of legal case you have.

Nolo, for example, offers a lawyer directory that includes profiles of attorneys that clue you in on their experience, education, fees, and more. (Nolo states that all listed attorneys have a valid license and are in good standing with their bar association).

Martinedale-Hubbell also offers an online lawyer locator, which contains a database of over one million lawyers and law firms worldwide. To find a lawyer, you can search by practice area or geographic location.

💡 Quick Tip: Did you know online banking can help you get paid sooner? Feel the magic of payday up to two days earlier when you set up direct deposit with SoFi.^

Doing Some Detective Work

Once you’ve assembled a short list, it’s a good idea to do a little bit of sleuthing before you pick up the phone.

This includes checking each attorney’s website. Does it look sloppily done or professional? Is there a lot of style but little substance?

By perusing the site, you can also get details about the lawyer or firm, such as areas of expertise, significant cases, credentials, awards, as well as the size of the firm. Size can actually be an important consideration.

A solo practitioner may not have much bandwidth if they have a heavy caseload to give you a lot of hand holding if that matters to you. However, their prices may be more budget-friendly than a mid-sized or larger firm.

While larger firms may be more expensive, they may have more resources and expertise that makes them the better option.

You’ll also want to make sure the lawyers on your consideration list are in good standing with the bar, and don’t have any record of misconduct or disciplinary orders filed against them.

Your state bar, once again, is a good place to get this kind of information. Some state bar websites allow you to look up disciplinary issues. The site may also have information on whether the attorney has insurance.

You may also be able to search the state bar’s site by legal specialty, which can help you confirm the lawyers you’re looking at really do have expertise in the area of law you need counsel in.

The Martindale-Hubbell online directory can be helpful here as well. It offers detailed professional biographies and lawyer and law firm ratings based upon peer reviews, which may help when choosing between two equally qualified candidates.

Asking the Right Questions

Many lawyers will do a free initial consultation. If so, you may want to take advantage of this risk- and cost-free way to get a sense of the attorney’s expertise and character. This is also a good opportunity to get a sense of the costs.

Whether you’re able to arrange a face-to-face meeting or just speak over the phone, here are some key topics and questions you may want to address:

•   Do they have experience in the area of law that applies to your circumstances? Further, you may want to get the percentage breakdown of their practice areas. If you need someone to help you with setting up a business and understanding business loans, for example, and that’s only 10% of what they do, that practice may not be the best fit.

•   Do they work with people in your demographic? If the practice only represents high-net-worth clients, and you’re not in that income bracket, they could be a mismatch. You can also get a sense of their typical clientele by asking for references from clients.

•   How much time can they commit to you? And, how do they like to communicate: phone calls? Email? Ideally, you want a lawyer who can make you a priority and is able to respond to your questions in a timely manner, rather than leave you hanging for days or weeks.

•   What are the fees and how are they charged? This is an important one so you can budget properly. For example, they may charge hourly, or they may work on a contingency basis, meaning they only get paid if you successfully resolve your case.

Also find out if they require a retainer (an upfront fee that functions as a down payment on expenses and fees), as well as what is included in their fees, and what might be extra (such as charges for copying documents and court filing fees). Ideally a lawyer will explain their fees and put them in writing.

You might also use this meeting or conversation to judge the lawyer’s character and personality, keeping in mind that chemistry counts.

The attorney you’re interviewing could have all the right credentials and awesome experience, but in the end, if their personality strikes you as a little prickly, or the vibe is off, even if you can’t exactly put your finger on it, you may want to trust your gut, walk away and keep searching.

The Takeaway

Choosing an attorney is an important decision. As much as you want to just get on with what may be a challenging or stressful situation that you need legal help with, it’s a good idea to invest some time, cast a wide net for referrals, then create and carefully vet your short list.

Finally, you’ll want to have an open conversation with any lawyer you are considering to make sure they are a good fit for you and that you understand, and can afford, all the fees involved.

Whether you’re looking for a lawyer to help you buy a home, start a business, or facilitate any other life transition, this may also be a good time to reconsider your banking partner and take steps to get your finances in order as well.

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.

FAQ

How much does it cost to hire a lawyer?

The cost to hire a lawyer varies widely depending on the case complexity, location, and attorney’s experience. Initial consultations are often free, but average hourly rates for lawyers across the country range from $162 to $392. In some cases, lawyers charge flat fees or contingency fees, rather than hourly fees.

What is it called when you hire an attorney?

When you hire an attorney, it is called “retaining” a lawyer. This formal process involves signing a retainer agreement that outlines the scope of the legal services, fees, and other terms. Retaining a lawyer ensures they are officially working on your behalf.

What are the disadvantages of hiring a lawyer?

Hiring a lawyer can be expensive, and legal fees can quickly add up. It can also be time-consuming, requiring frequent communication and documentation. Additionally, the legal process can be stressful and may not always guarantee the desired outcome, leading to potential disappointment and frustration.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

This article is not intended to be legal advice. Please consult an attorney for advice.

SOBNK-Q225-080

Paying rent every month can feel akin to throwing money away. You don’t grow equity in a home, nor do you have a place to call your own or customize as you see fit (farmhouse kitchen sink, anyone?).

Perhaps you’re wondering if the time is right to buy a home or at least start saving for one. Maybe you’ve caught DIY fever and have ideas about what your dream home would look like and have been watching videos of how to redo a backsplash and plant some annuals. Or maybe you are planning on enlarging your family and think it’s time to become a homeowner, since a yard and playroom sure would be nice.

But there are other considerations, especially financial ones, to contemplate as well. The housing market has been hot, and pulling together a down payment plus affording a home loan may stretch your budget. Maybe renting is your best bet after all.

“Am I financially ready to buy?” is certainly one question you will likely want to answer. But it’s not the only issue. Here, learn the four signs that you may be ready to join the ranks of first-time homebuyers.

Renting a Home vs Owning a Home: Pros and Cons

One important way to know if you are ready to be a first-time homebuyer is to consider the pros and cons of owning vs. renting.

First, take a closer look at the benefits of owning:

•  You know what your housing payments will be in terms of your mortgage amount, especially if you opt for a fixed-rate mortgage.

•  Month by month, you will build equity in your home.

•  As your equity grows, you may be able to borrow against it for other financial goals.

•  Owning a home can be a step toward building your net worth.

•  You may qualify for tax deductions.

•  On-time payments can help build your credit history.

•  You can customize your home to reflect your particular needs and tastes.

Now, here are the cons of owning a home:

•  You often need to come up with a down payment, which can be hard to save for. There are also closing costs to be paid.

•  You need to qualify for a mortgage.

•  You also need to budget for property taxes and related expenses such as insurance.

•  It will be your responsibility to pay for home repairs and upgrades, which may make having a healthy emergency fund more important. If, say, the furnace conks out, there’s no landlord to call for help.

•  Your mortgage, as well as taxes and other expenses, could add up to more than rent.

•  You are making a long-term commitment to owning a home. While, of course, you can always sell a property, it’s in your best interest to stay put and recoup closing costs and other expenses vs. picking up and moving frequently.

Next, think over the pros of renting:

•  It could be cheaper than owning. Your rent could be less than the mortgage, and you won’t have property taxes to pay.

•  Repairs and maintenance will likely be your landlord’s responsibility.

•  You’ll have the flexibility to move more easily when you want to.

•  You don’t need to come up with a down payment or qualify for a mortgage loan.

Last of all, take a look at the cons of renting:

•  You won’t be building equity in a property as you make your monthly rental payment.

•  Your net worth will not grow with rising property values.

•  You won’t have the security of ownership and its relatively predictable costs. Your landlord could raise your rent or decide not to rent the property any longer.

•  Your payments typically don’t build your credit history.

•  While you can likely decorate as you please, you won’t be able to upgrade or renovate as you might with a home you own. For instance, even if your landlord did allow you to get a new smart fridge, you probably couldn’t take it with you when you move.

💡 Quick Tip: Buying a home shouldn’t be aggravating. Online mortgage loan forms can make applying quick and simple.

Renting a Home vs Owning a Home Differences

Deciding whether to buy or rent is a major decision that can involve your financial and personal needs and aspirations. Here are some specifics:

•  Renting a home offers you more flexibility in terms of when and where you move; you will likely feel less anchored in a property.

•  Renting may well be less expensive: You don’t need to come up with a down payment, and rent may cost less than a mortgage or a mortgage plus property taxes.

•  However, when you have a mortgage, you are likely building equity and wealth, which you may choose to borrow against in the future (say, with a cash-out refinance). You may not have that feeling of “throwing money away” every month on rent.

•  When you buy a home, you are on the hook for that monthly payment, but, if you have a fixed-rate loan, it is more predictable than rent, which may fluctuate with the housing market.

•  As a homeowner, you would be liable for paying taxes and insurance, as well as bankrolling any renovations and upgrades to your home.

•  When you own your own place, you can personalize it to suit you, whether that means putting in a spa bathroom, knocking down walls, or building a patio.

Buying a Home vs Renting an Apartment

When it comes to deciding whether to buy a property or rent a home (say, an apartment), there is no right or wrong answer.

•  Renting is often more affordable, allowing you to save money and perhaps meet other money goals like paying down debt.

•  Renting is more flexible in most cases. If you rent an apartment, you are able to move at the end of your lease (or possibly before) without a lot of hassle.

•  When you rent an apartment, your landlord is probably covering property taxes and will be responsible for repairs, such as HVAC upgrades or fixing a clogged sink.

That said, when you buy a home, you may find the following:

•  A bigger financial commitment may be required (down payment, closing costs, property taxes, home maintenance), but you are building equity and possibly growing your wealth.

•  You can make your place yours and renovate it to suit your taste.

•  Buying a home vs. renting an apartment can give you a sense of security: You won’t have a landlord who can raise your rent, and you can put down roots in a community.

4 Signs You May Be Ready to Buy

If you think owning a home vs. renting is right for you, here are four signals that you may be ready to move ahead.

1. Your Budget Is Big Enough to Cover the Expenses

Home ownership isn’t all gain, no pain. Expenses may include:

•  Down payment and closing costs

•  Mortgage payments, including property taxes, homeowners insurance, and, if applicable, private mortgage insurance

•  Repair and maintenance costs, including HOA dues, if applicable.

How can you budget for these upfront and ongoing expenses? One way is to take a look at the average amount each of these costs in the housing market where you plan to buy a home to get a sense of how home-related expenses may affect your finances in the larger picture.

Doing some number crunching with a home affordability calculator may be enlightening.

You may get excited about buying a fixer-upper when watching home improvement shows. A common mortgage for such homes is an FHA 203(k), backed by the federal government, which includes money for the purchase price and some repairs and renovations.

Buyers will need to get bids for all the repairs they hope to fund with the loan. For less extensive repairs/improvements, there’s a Limited 203(k).

If the desired renovation is on the smaller side and you acquire a traditional mortgage, cash or a personal loan are options.

You can get an idea of how much your chosen home repair or improvement costs will be with this home improvement cost calculator.

💡 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.

2. You Plan on Staying Put for a While

Buying a home signals more of a commitment to location than renting. If you’re likely to relocate in the coming couple of years, renting may be the right move.

Here’s why: If you buy a home and sell it soon after, there’s a chance you’ll barely break even. That’s because real-estate commissions and other factors will come into play. And the financial and emotional stress of selling again soon after buying can be significant. On the other hand, if you can see yourself staying put in your new home for a while, it might be a sign to start shopping.

3. You Have Good Credit

Your good or better credit profile may have been advantageous when applying for a place to rent.

The credit you’ve spent years building will likely pay off in a bigger way once you make the move to own, with improved lending terms such as a lower mortgage rate offer.

What credit score is needed to buy a house? The average American’s credit score remains in the range considered “good.” But applicants with “fair” and even “poor” credit scores can and do secure mortgages.

Here’s how credit scores are usually classified:

•  Excellent: 800–850

•  Very good: 740–799

•  Good: 670–739

•  Fair: 580–669

•  Poor: 300–579

If you’ve spent years building your credit and your number reflects that, then you might be financially ready to buy a home.

Credit score requirements for loan program eligibility and pricing can vary from lender to lender, so you may want to shop around.

4. Rents in Your Area Are High

In many markets, the rising price of rent could make buying more enticing than ever. It may be a smarter move to invest your money toward homeownership vs rent.

Two big factors to consider are:

•  How long you plan to stay in your home

•  The price-to-rent ratio, which compares the median home price and median annual rent in a given area.

Several websites (such as Zillow, Trulia, and Realtor.com®) have tools that allow you to assess the dollars and cents of renting vs. buying. Estimating your break-even point of renting vs. owning a home could be another useful way to answer the question of whether it’s a good time to buy a home.

It’s best to take the calculations with a grain of salt, though. These are general estimates, and no one can predict the future of housing prices, rents, and taxes.

The Takeaway

When considering whether to buy vs. rent, there’s not one right decision. It’s a matter of which scenario suits your life and your financial situation at a given time.

Signs that you may be ready to buy a home can include having an adequate budget for the costs involved and a good credit profile, a desire to put down roots, and an understanding of the price-to-rent ratio in your target area.

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

FAQ

What are the advantages of owning vs. renting a home?

There are several pros to owning vs. renting a home. You can build equity in your home and potentially grow your net worth. What’s more, you can personalize your home however you like. You’ll also have stability in terms of both knowing your housing costs every month (as opposed to a surprise rent hike) and putting down roots in a community.

What are 3 disadvantages to owning a home?

There are several cons to owning vs. renting a home. You may face higher costs (down payment, closing costs, mortgage, plus property taxes). In addition, you will be responsible for home maintenance, which can be pricey and require your time and energy. You’ll likely have less flexibility in terms of moving, too.

What is the main reason to avoid renting to own?

Renting to own can be problematic if you change your mind. You can wind up losing your down payment and other charges.

*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.

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

SOHL-Q225-169

Whether you’re refreshing a single room or outfitting an entirely new home, furnishing a space can be an exciting creative process. It’s the chance to bring your vision to life, curate your style, and find pieces that truly reflect who you are.

But let’s be real: furniture can be pricey these days. The good news? Affordable doesn’t have to mean cheap-looking. With the right strategies, you can score stylish, quality pieces without draining your wallet — or settling for the dreaded “first apartment” look.

Here are 25 savvy tips to help you furnish your space for less — and sometimes even for free.

25 Tips on How to Get Cheap Furniture

Scoring great furnishings on a tight budget takes some planning, and also knowing where to buy affordable furniture. These ideas can help you create a great space without spending a lot.

1. Taking Stock of What You Already Have

Before going out to buy new stuff, you may want to do a walk-through of your space and make a list of what you already have. You can label each item “keep,” “donate/sell” or “toss,” so you know exactly what you need.

2. Taking Stock of Mom’s Basement Too

Do you have family members who may be harboring some perfectly good but no-longer-needed furniture? Consider scoping out their basements, attics, and garages for some free treasures.

3. Making a Wishlist

It’s okay to dream a little. In fact, a good way to start furnishing a new home is to go to your favorite furniture store’s site and fill your cart without considering price. You can then cull down your list to essentials, and start looking for those pieces (or something similar) for a cheaper price tag.

4. Renting Furniture

If your furniture budget is super tight, you may want to consider renting furniture from a company like CORT rather than buying everything you need. Renting can also be a good option if you’re only going to be in your current home for a short time.

5. Timing Your Purchases Right

Knowing when to make big purchases can help you get some steep furniture discounts. Furniture stores tend to get new inventory at the end of winter and end of summer. To make room for newer items, they will often run good sales in January/February and July/August.

When it comes to furnishing your porch or patio, the right time to buy furniture is typically the end of summer and early fall, when retailers are trying to clear out any leftover inventory.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

6. Checking Out Freecycle

Cheap is great, but free can be even better. Consider going to a reuse/recycle site like Freecycle.org to see what people in your area may be looking to get rid of. Keep in mind that good items often go fast.

7. Curbing Impulse Buys

It’s easy to fall madly in love with a cool sectional sofa and give in to an impulse buying that can leave you with major debt. Before you pull the trigger on a pricey new piece of furniture, you may want to press pause. By giving yourself a week or so to really consider the purchase, you may realize you don’t actually need it. Or you may be able to scout out a cheaper but equally good option.

Recommended: How to Combat Impulsive Spending

8. Mixing High and Low

Here’s another way to buy furniture cheap: You can often get a high-end look by splurging on one or two classic investment pieces and then going with cheaper, trendier accent pieces and accessories.

9. Putting the Word Out on Social Media

You may want to use social media to let people in your network know that you are on the hunt for furniture. You can even specify what you’re looking for (dining table, a chaise for the yard) and what you’re willing to offer (or barter) in return. You may be surprised at the response you get.

10. Selling Stuff You Don’t Need

To bolster your furniture budget, consider selling pieces that no longer work for your space. If you have a lot to get rid of, you might host a garage sale. For just a few items, you can list them on a resale site like Craigslist, OfferUp, or Facebook Marketplace and see how much you can score.

11. Doing a Furniture Image Search

If you see a piece you love but it doesn’t fit your budget, download a photo of the item and then go to Google Images. If you click on the “Search By Image” button (the camera icon) and upload the photo, you can search for similar items. You might find the item’s twin at a better price.

12. Searching Craigslist

Craigslist may be an oldie, but it can still be a goodie when it comes to finding affordable furniture. You can head to the site (which hasn’t changed much over the years), click the furniture tab, and search the possibilities.

13. Thinking Beyond Furniture Stores

Mass market retailers like Target, Walmart, and Home Depot actually have large furniture departments. You may be able to find stylish pieces at good prices, along with free delivery.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

14. Searching Amazon Warehouse

How else to buy furniture cheap? Check out Amazon Resale, a corner of Amazon’s main site that is dedicated to selling used, pre-owned, and open-box products (often things that were returned unused or close to it). You can click on the furniture tab and either search for your needs or just see what’s available.

15. Hitting the Yard Sales

You can spend a Saturday or Sunday morning driving around town looking for treasures. Or you can check out yard sale listings online, then map out a route that hits the yards or stoops with the most potential.

16. Asking About the Floor Model

If there’s a piece in a store you absolutely love but it’s a bit out of budget, you can always ask the manager if they will sell you the floor model for a discount.

Recommended: The Secret to Never Paying Full Price

17. Combing Flea Markets

It can take a little time and effort, but you can often find great, affordable treasures at flea markets. Sometimes a little DIY is all it takes to transform something past its prime into the perfect thing for your place.

18. Browsing Antique Stores

In the winter months, you can often get the flea market experience by combing through antique stores or, even better, antique malls that have multiple booths housed indoors.

19. Checking Online Resale Marketplaces

Sites like OfferUp and Facebook Marketplace (where you may have listed items to sell) can also be a great resource for finding what you need. You can even do a search for a specific item you saw in store to see if anyone is offloading that same piece.

20. Thrifting Furniture

Large thrift store chains like Goodwill and Salvation Army typically get lots of donated items every day and can be a great place to find your next book shelf or coffee table. Local thrift shops can be worth checking out too.

21. Checking Out Salvage Stores

One of the most widely known salvage stores, Habitat ReStore, has locations throughout the country and often sells new and used furnishings, as well as appliances, for far less than retail. Bonus: They are helping to divert those goods from the waste stream.

22. Going Cheap on Art and Accessories

Once you’ve made your big item purchases, it’s time to think small (and cheap) with accent pillows, throws, artwork, and other decorative accessories. These items don’t need to cost a lot to add serious personal style to a space. You may fall for a $150 throw pillow but, odds are, you could find a super cute one for a fraction of the cost.

23. Stopping by Estate Sales

You can often find beautiful, high-quality pieces of furniture, as well as artwork, at estate sales for a fraction of what you’d pay at a store. You can find estate sale listings in your area on Craigslist as well as Estatesale.com and Estatesales.net.

24. Haggling Over the Price

No matter where you are shopping for furniture, it can be worth trying to bargain the price down a bit. You can ask a seller if the listed price is as low as they can go, if they will offer a discount for buying multiple items, or if there is any wiggle room on the delivery fee.

25. Checking In With Neighbors

You can use Nextdoor, the neighborhood online hub, to let neighbors know what you are looking for and also scroll through the site’s “For Sale and Free” listings to see what your neighbors are selling or giving away.

What Contributes to High or Low Furniture Prices?

Here are some factors that contribute to whether a piece of furniture has a high or low price:

•   Production: Mass-produced pieces are likely to be less expensive than a piece that is made in smaller batches or handcrafted by an artisan.

•   Supply and demand: An item that is popular is likely to be pricier than something that has fallen out of favor.

•   Materials: A solid wood piece, for example, is probably going to cost more than a similar item made of particleboard.

•   Supply chain: If a manufacturer is using, say, a material that is scarce due to supply chain issues, they may have to pay more to obtain it. Those additional charges could be passed along to the consumer.

•   Source: Depending on trade conditions, labor, shipping, and other factors, there could be a price discrepancy based on whether the item was manufactured in the U.S. or elsewhere.

What to Look Out for in Secondhand Furniture

Secondhand furniture can be a great resource when you are buying furniture on a budget. Btw, you can even shop for used furniture online at sites like AptDeco and Kaiyo.

Here, some buying furniture tips when you’re hunting for preloved treasures:

•   Just say no to used mattresses: They can be a repository of stains, smells, dust mites, bedbugs, and more.

•   Inspect for structural damage: Cracks, duct tape, and evidence of past repairs can spell trouble.

•   Avoid upholstered furniture with an odor: Whether mildew, smoke, or pet smells, these smells can be very hard to eliminate.

•   Be wary of painted pieces that might have lead paint: This could include items that were made before 1978, when laws were passed banning lead paint. Crackly, “alligator skin” painted surfaces can indicate lead paint. Also, if you rub your hand over the surface and get a chalky residue, it might be lead.

•   Check for signs of mold: It can look like a patch of dirt that won’t rub away. That’s another health issue you don’t want to deal with.

With these warnings in mind, you could get a real deal by buying secondhand, especially if you use your imagination. Often, with the addition of a coat of paint and new hardware or a slipcover, tired pieces can turn into treasures. Look online for how-to ideas.

The Takeaway

Furnishing a new place can be daunting, especially if you’re shopping on a budget. But by thinking beyond traditional furniture stores and turning to alternatives like flea markets, resale and salvage shops, estate sales, and online marketplaces, you can often score chic and cheap pieces that won’t fall apart in a year or two.

You can also stretch your furniture budget by mixing higher-end investment pieces with cheaper accent decor and sprucing up secondhand finds.

Another way to cut furniture costs is to save up for your purchases in advance. Credit cards and store financing often come with high interest rates, which can significantly increase the overall cost of furnishing your home. Building a furniture fund in advance and paying cash eliminates these added fees.

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.

FAQ

How do you buy furniture on a budget?

You can buy furniture on a budget by shopping at estate sales, garage sales, thrift shops, and antique malls, as well as hunting at your usual retailers for floor models and other sale items. Also see what you might be able to score for free via a neighborhood online community or Freecycle.

Is it cheaper to buy furniture in-store or online?

It depends. Online retailers often offer lower prices due to reduced overhead costs and high sales volume. However, brick-and-mortar stores often offer bundled deals, local discounts, or free delivery. In-store shopping also allows you to inspect quality firsthand, possibly saving on return costs or buyer’s remorse. Overall, online can be cheaper, but savvy in-store shopping might offer better value and fewer risks.

What is the cheapest month to buy furniture?

It depends what you’re in the market for. If you’re looking for deals on indoor furniture, consider shopping in February. This is near the end of retail’s winter season, when stores generally try to get rid of inventory to make room for spring lines. If you’re shopping for outdoor furniture, August is often the cheapest month to shop. This is when many retailers are eager to get rid of summer items in order to make space for income merchandise.

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SOBNK-Q225-063

The decision to adopt a child is an exciting milestone in life, but it’s also one that takes a considerable amount of planning and effort. Future adoptive parents can opt for either a domestic adoption or international adoption, but there are many differentiating factors that may influence the decision.

If you’re thinking about adoption, you’ll want to understand the distinctions between domestic and international adoptions, from the process and timeline to the costs involved, so you can decide what’s best for you.

The Domestic Adoption Process

One of the major advantages of choosing a domestic adoption is that you have the potential to adopt a newborn. However, the timeline is not set in stone (it’s usually between two and seven years to adopt a newborn) and may depend on whether you opt for an open, semi-open, or closed adoption. Most domestic adoptions are considered at least “semi-open.”

Depending on the agency you work with, you may need to be chosen by a birth mother based on your profile. Once you’re selected, the timing depends on the expected (and actual) due date. The process usually takes at least a few months. Typically, you get access to the child’s medical records as well as the birth mother’s family history.

An open adoption also allows some contact and conversations with the birth mother before the baby is born. In a semi-open adoption, personally revealing information is withheld between the adoptive parents and the birth mother.

Once the baby is born and you officially adopt the child, the adoption agency may facilitate sending updates to the birth mother, as well as pictures so she can see the baby is well taken care of.

Domestic Adoption Eligibility Requirements

American adoption requirements vary by state and by the adoption agency you choose to work with. Generally, you must be at least 18 years old, and there’s often a minimum age difference required between you and the child.

Most states allow domestic adoptions regardless of marital status; parents can be married, single, divorced, or widowed and still qualify.

Explore your state and city adoption websites for more details on additional requirements unique to your area.

The International Adoption Process

International adoption, due to rules and clearances, typically will not involve a newborn, so you’ll need to be open to welcoming an older baby or toddler (or a child) to your home.

With international adoption, there are issues that could affect your ability to adopt, even in the middle of the process. New international laws and relations between the United States and other countries have the potential to derail families who are in the middle of an adoption. The process varies by country but typically takes between 1.5 and 6 years or longer.

While you can find out about the child’s medical history, you likely won’t know anything about the family history. Once you adopt a child from abroad, you won’t have any contact with the birth family.

International Adoption Eligibility Requirements

Each country has its own eligibility requirements for adoptive parents, which are typically much stricter than domestic requirements. Often you’ll need to meet income requirements, which may include a higher amount if you already have children. Some countries also have net worth requirements.

In addition, you may discover that some countries restrict the type of families that are allowed to adopt from there. For example, some only offer adoption to married couples or single women.

These rules vary by country, and there are some countries, such as Colombia, that allow single men and same-sex partners to adopt.

International vs Domestic Adoption Costs

The costs vary greatly with both international and domestic adoptions, but the common thread is that it can be expensive if you’re not adopting a foster child.

For international adoptions, expect to pay anywhere from $25,000 to $70,000 or more, depending on the country.

In South Korea, for example, adoptions may cost between $30,000 – $40,000. In China, the range is $25,000 to $40,000. Adoptions from India may span $38,000 to $52,000.

Choosing an international adoption also requires you to travel to the country (often more than once) in advance of actually adopting your child.

Domestic adoptions through a private agency may cost between $20,000 and $45,000, though costs of $60,000 or higher are also possible.

It is much less expensive, and potentially even free, to adopt through foster care. However, as a foster parent, your goal is to help reunite the child with the existing family. Adoption may become an option, but it is not the primary objective.

Recommended: Common Financial Mistakes First-Time Parents Make

Funding Options for Adoptions

Adoption costs are often out of reach for many U.S. families. But even if you can’t tap into your savings (or don’t want to), you can explore other options for funding your adoption.

Recommended: 5 Tips for Saving for a Baby

Employer Benefits

Some companies offer adoption assistance funds as part of their employee benefits packages. In addition, about 33% of employers offer paid adoption leave. This can provide flexibility to transition when a new family member arrives.

You may want to check with your HR department to make sure you don’t miss out any adoption benefits offered by your company.

Adoption Federal Tax Credit

The federal government provides some tax benefits for adoptions. First, if you use employer benefit funds to pay for the adoption, that money is excluded from your income so you don’t have to pay federal taxes on it.

The tax code also offers an adoption tax credit that can help offset some of the costs involved in adoption, whether you adopt for a domestic or international adoption. Qualified adoption expenses include things like adoption fees, legal costs, and travel expenses.

The tax credit amount changes every year, so it’s a good idea to do your research or talk to an accountant for more specifics.

There are income limits for qualifying for both the tax exclusion and credit.

Friends and Family

Many adoptive parents ask friends and family members for financial support when starting the adoption process. You could even start a crowdfunding campaign as a way for your broader community to donate to your adoption fund.

Hopeful parents may want to include a compelling personal story about the path to adoption to help draw in potential donors from their community.

Just remember that if you use a crowdfunding platform, you generally have to pay fees taken out of the money you’ve raised. This usually ranges from 3% to 18% when including both fundraising fees and processing fees.

Recommended: New Parent’s Guide to Setting Up a Will

Personal Loan

Another option for financing your domestic or international adoption is with an unsecured personal loan.

This type of loan typically comes with a fixed interest rate and repayment period, which allows you to make a set monthly payment over a set number of years.

You’ll need good credit to qualify for the best interest rates. Lenders may also take your debt-to-income ratio into consideration. You may qualify for a larger loan amount if your existing debt is low compared to your monthly income.

Sometimes referred to as an adoption loan, the proceeds from this type of loan can be used for just about anything. That means not just the agency and legal fees but also costs like travel and meals, which can get expensive if you’re adopting from abroad.

The Takeaway

Choosing to adopt a child can be life-changing, but an international or domestic adoption usually carries a high price tag. Fortunately, with tax benefits and funding options available, you can worry less about how to pay for all of the costs associated with the process and focus more on the joy of growing your family. Crowd-funding and personal loans are two sources to consider to help finance an adoption.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What are the disadvantages of international adoption?

International adoption has its upsides, but in terms of disadvantages, the challenges of international travel and social adjustment, the expense of this kind of adoption, and the complexities of foreign laws and requirements are among the downsides. Also, those who want full knowledge of the biological parents’ medical records may not be able to access the information they are seeking.

What are the benefits of international adoption?

One of the key benefits of international adoption is that it promotes cross-cultural exchange and understanding. It allows families to create multicultural households.

What is the most common kind of adoption in the U.S.?

The most popular type of adoption in the U.S. is newborn adoption. This accounts for about 60% of adoptions in America.

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SOPL-Q225-055