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When looking for a home loan, the two main choices of financial institutions are credit unions and banks. Each option comes with pros and cons.

Here’s an overview to help you make the right choice for your situation. You might start with general tips when shopping for a mortgage.

How Credit Union and Bank Mortgages Are Similar

Common types of home loans include fixed-rate and adjustable-rate loans as well as conventional and government-insured loans (such as FHA and VA loans). Most of the different mortgage types are available at both credit unions and banks.

At a high level, approval processes are the same at each type of financial institution as well. Each will have mortgage underwriting guidelines, and after a borrower applies, the loan will be reviewed and approved, suspended, or denied.

Plus, both may offer mortgage preapprovals.


💡 Quick Tip: SoFi’s Lock and Look ⁺ feature allows you to lock in a low mortgage financing rate for 90 days while you search for the perfect place to call home

Differences Between Credit Union and Bank Mortgages

So, credit union or bank for mortgages? Beyond general similarities, differences exist. Let’s look at credit union mortgages and then bank home loans.

Benefits of Getting a Credit Union Mortgage

Are credit unions good for mortgages? In many ways they are. While a bank has stockholders, a credit union consists of members (account holders) who more or less serve in this role. A bank must satisfy its investors by making a profit; credit unions don’t, so they can return those dollars to members through more attractive interest rates, lower fees, and more.

To enhance their members’ financial wellness, credit unions typically provide the following benefits:

Looser Approval Criteria

In general, credit unions may approve more loans in the lower- to middle-income range for their members. Plus, when credit scores are less than ideal, a credit union loan is sometimes the better choice.

Lower Interest Rates

Overall, credit unions offer lower rates on their mortgage loans. To estimate how much money this may save you, use a mortgage calculator.

Fewer Fees

Credit unions can pass on savings to members through lower fees as well as lower rates.

The Personal Touch

Because credit unions are less likely to sell their mortgage loans to a third party, a borrower is more likely to know the loan servicer (the credit union). This can lead to more personalized service.

Recommended: How Does the Mortgage Preapproval Process Work?

Disadvantages of Getting a Credit Union Mortgage

Are credit unions better for mortgages? That depends on a borrower’s needs and preferences because disadvantages of credit union mortgages also exist, including these:

Membership is a Must

In most cases, a borrower must meet certain requirements to join a credit union. This can include living in a certain community, belonging to a certain profession, or otherwise having the appropriate affiliation.

Fewer Locations

Usually, credit unions have fewer branches, which can limit their geographical range. So when away from home, outside the credit union’s range, it may be harder to conduct all the financial transactions you might like. For example, the ATM network may be smaller and less convenient.

Stale Tech

Because credit unions are often more local institutions, they typically won’t have the up-to-date technology found at larger banks. So if a borrower wants first-class online and mobile banking, credit unions may not be the best choice.

Limited Menu

Credit unions may offer fewer financial products, especially on the savings and investment side. They may only offer checking and savings accounts, for example, plus credit cards. Although that may not affect a borrower’s ability to get a mortgage, this can limit what other products they can benefit from at the credit union.

Possibly Higher Interest Rates

Sometimes credit unions can’t compete with banks, especially when a large bank offers especially good interest rates. So be sure to compare rates if you’re looking for the most attractive ones.


💡 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.

Benefits of Getting a Bank Mortgage

Getting a home loan at a bank has its upsides, including these:

Variety of Services

Banks often offer a significant range of savings, lending, and retirement-related financial products, making it easier for a borrower to have an all-in-one financial institution.

Multiple Branches and ATMs

Banks, especially national ones, will typically allow you to have access to multiple branches in more locations as well as a larger ATM network. This can make for a more convenient experience.

New Tech

Banks are, overall, more likely to have the latest in banking technology, including the ability to bank online and to use more sophisticated mobile apps.

Disadvantages of Getting a Bank Mortgage

Meanwhile, drawbacks of getting a bank home loan can include the following:

Higher Interest Rates

Banks need to generate profit for stockholders — and credit unions don’t — so banks may charge a higher rate on home loans. But this isn’t universally true, so it’s always a good idea to compare rates.

Higher Fees

In general, banks charge higher mortgage fees than credit unions do. Although not always true, this is something to investigate.

Less Personalized Customer Service

Because credit union membership tends to be smaller and more local, bank customers may receive less personal service, especially when using a branch outside their more typical one (perhaps while traveling). Plus, banks are more likely to sell mortgage loans to a third-party loan servicer.

With any lender, bank, or credit union, a house hunter should feel at ease asking a range of mortgage questions.

The Takeaway

Credit union vs. bank mortgage? Each has its upsides and potential downsides. Borrowers looking for a home mortgage loan can explore the pros and cons to make the right choice for their specific situation.

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.

FAQ

Is it better to get a mortgage at a credit union?

Not necessarily. It’s a good idea to look into what each route offers before making the right choice for you.

What are the disadvantages of credit unions?

Credit unions tend to be smaller and more localized than many banks, so disadvantages can include fewer locations, a smaller ATM network, and more limited financial products. Borrowers must qualify to become a credit union member; technology probably won’t be as modern as that at a larger bank; and, in some cases, costs can be higher.

Are credit unions safe for mortgages?

The National Credit Union Administration insures deposits of up to $250,000 at all federal and some state credit unions, protects the members who own credit unions, and regulates federal credit unions. Eligible bank accounts of the same amount are insured by the Federal Deposit Insurance Corp.

Can I take out a HELOC or second mortgage through a credit union?

Not all credit unions offer the same products, but many of them do offer home equity lines of credit and home equity loans.

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Photo credit: iStock/Lemon_tm

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

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

⁺Lock and Look program: Terms and conditions apply. Applies to conventional purchase loans only. Rate will lock for 91 calendar days at the time of preapproval. An executed purchase contract is required within 60 days of your initial rate lock. If current market pricing improves by 0.25 percentage points or more from the original locked rate, you may request your loan officer to review your loan application to determine if you qualify for a one-time float down. SoFi reserves the right to change or terminate this offer at any time with or without notice to you.

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.

SOHL-Q224-1843070-V1

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The monthly payments on a $400,000 mortgage could range from about $2,300 to more than $3,700, depending on the loan’s interest rate, term, and other factors. But hopeful homebuyers would be wise to consider how much that mortgage could cost over time as well as what the monthly payments might be. Read on for a breakdown of what some of your home-buying costs might be, and how they could affect the total cost of a $400,000 mortgage.

What Will a $400,000 Mortgage Cost?

There are several different costs you may run into when taking out a mortgage. Most of the time, they can be divided into three main categories.

Closing Costs

Closing costs are expenses you’ll pay upfront when you get a loan. They can include things like loan processing fees, third-party services such as appraisals and title insurance, and government fees and taxes. You also may decide to pay mortgage points (also called discount points) upfront on your loan to lower the interest rate. Closing costs can vary significantly from one loan type and lender to the next, but they generally range from 3% to 6% of the mortgage amount.

Monthly Payments

Monthly mortgage payments, which are paid over the life of your loan, typically include two main parts:

•   Principal: This portion of your mortgage payment goes directly toward paying back the amount you borrowed.

•   Interest: This is the fee the lender will charge you for borrowing money. The amount of interest you pay each month will be calculated by multiplying your interest rate by your remaining loan balance.

Escrow

Some homebuyers may also have a third amount, called escrow, included in their closing costs and/or monthly payments. Lenders often collect and hold money in an escrow account so they can be sure critical bills like homeowners insurance and property taxes are paid on time. (Curious about the most budget-friendly places to buy? Check out this list of the most affordable cities in each state.)


💡 Quick Tip: SoFi’s Lock and Look ⁺ feature allows you to lock in a low mortgage financing rate for 90 days while you search for the perfect place to call home.

What Would the Payment Be on a $400,000 Mortgage?

We’ll keep things simple and eliminate the costs associated with an escrow account to calculate what the payment on a $400,000 mortgage’s monthly payments might be.

Let’s say you wanted to purchase a home for $500,000, and you had $100,000 for a down payment. If your lender offered you a 7% annual percentage rate (APR) on a 15-year loan for $400,000, you could expect your monthly payment — principal and interest — to be about $3,595. If you had a 30-year loan with a 7% APR, your payment could be about $2,661.

Here are some more examples that show the difference between a 15-year loan vs. a 30-year loan, using SoFi’s Mortgage Calculator:

APR	Payment with 15-year Loan	Payment with 30-year Loan
5.5%	$3,268	$2,271
6.5%	$3,484	$2,528
7.5%	$3,708	$2,796

Where Can You Get a $400,000 Mortgage?

Homebuyers may have a few different options when deciding where to go for a mortgage, including online banks and lenders, and traditional banks and credit unions. Because the rates and terms lenders offer may vary, it can be a good idea to shop around for a mortgage that’s the right fit for your individual needs.

Before you start looking for quotes, though, you may want to sit down and review the different types of mortgages you can qualify for. How would a 15-, 20-, or 30-year mortgage affect your monthly payments? Are you looking for a fixed or adjustable mortgage rate? Would you be better off with a conventional mortgage or a government-backed loan? (Some loans may have more flexible requirements for down payment amounts or a borrower’s credit score.)

Once you start comparison shopping, you can note the pros and cons of various offers and narrow down your choices. You also may want to read some online reviews of the lenders you’re considering.

Recommended: 2024 Home Loan Help Center

How Much Interest Will You Pay on a $400,000 Mortgage?

The interest rate your lender offers can make a big difference to the overall cost of your mortgage. So can the mortgage term you choose.

On a $400,000 mortgage at a 7% APR, for example, your total interest costs could range from $247,156 to $558,036, depending on the length of the loan you choose (15 vs. 30 years).

Spreading out your mortgage payments over a longer term can lower your monthly payment, but you can expect to pay more for the loan overall. Your financial circumstances at the time you take out your loan may dictate which is a priority for you. (If you go for a longer loan, and your situation changes, you may decide to refinance your home mortgage to a shorter term down the road.)


💡 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 Does Amortization Work on a $400,000 Mortgage?

Though your payment will remain the same every month (if you have a fixed-rate loan), the amount you’ll pay toward interest vs. principal will change over the life of your home loan. In the first years, the majority of your payment will go toward interest. But as your balance goes down, more of your payment will go toward principal.

Your lender can provide you with a mortgage amortization schedule that shows you how the proportions will change as you make payments on your loan.

Here’s what the amortization schedules for a $400,000 mortgage with 30- and 15-year terms might look like. (Keep in mind that your payments may include other costs besides principal and interest.)

Amortization Schedule, 30-Year Loan at 7% APR

Year	Amount Paid	Interest Paid	Principal Paid	Remaining Balance
1	$31,934.52	$27,871.28	$4,063.24	$395,936.76
2	$31,934.52	$27,577.55	$4,356.97	$391,579.79
3	$31,934.52	$27,262.58	$4,671.94	$386,907.85
4	$31,934.52	$26,924.85	$5,009.67	$381,898.18
5	$31,934.52	$26,562.70	$5,371.82	$376,526.36
6	$31,934.52	$26,174.37	$5,760.15	$370,766.21
7	$31,934.52	$25,757.97	$6,176.55	$364,589.66
8	$31,934.52	$25,311.46	$6,623.06	$357,966.60
9	$31,934.52	$24,832.68	$7,101.84	$350,864.76
10	$31,934.52	$24,319.29	$7,615.23	$343,249.53
11	$31,934.52	$23,768.78	$8,165.74	$335,083.80
12	$31,934.52	$23,178.48	$8,756.04	$326,327.76
13	$31,934.52	$22,545.51	$9,389.01	$316.938.75
14	$31,934.52	$21,866.78	$10,067.74	$306,871.01
15	$31,934.52	$21,138.98	$10,795.54	$296,075.46
16	$31,934.52	$20,358.57	$11,575.95	$284,499.51
17	$31,934.52	$19,521.74	$12,412.78	$272,086.73
18	$31,934.52	$18,624.42	$13,310.10	$258,776.63
19	$31,934.52	$17,662.23	$14,272.29	$244,504.35
20	$31,934.52	$16,630.49	$15,304.03	$229,200.31
21	$31,934.52	$15,524.16	$16,410.36	$212,789.95
22	$31,934.52	$14,337.85	$17,596.67	$195,193.28
23	$31,934.52	$13,065.79	$18,868.73	$176,324.55
24	$31,934.52	$11,701.76	$20,232.76	$156,091.79
25	$31,934.52	$10,239.14	$21,695.38	$134,396.41
26	$31,934.52	$8,670.78	$23,263.74	$111,132.66
27	$31,934.52	$6,989.04	$24,945.48	$86,187.18
28	$31,934.52	$5,185.73	$26,748.79	$59,438.39
29	$31,934.52	$3,252.05	$28,682.47	$30,755.92
30	$31,934.52	$30,755.92	$1,178.60	$0

Amortization Schedule, 15-Year Loan at 7% APR

Year	Amount Paid	Interest Paid	Principal Paid	Remaining Balance
1	$43,143.76	$27,504.57	$15,639.19	$384,360.81
2	$43,143.76	$26,374.01	$16,769.75	$367,591.06
3	$43,143.76	$25,161.72	$17,982.04	$349,609.02
4	$43,143.76	$23,861.80	$19,281.96	$330,327.06
5	$43,143.76	$22,467.90	$20,675.85	$309,651.21
6	$43,143.76	$20,973.24	$22,170.51	$287,480.69
7	$43,143.76	$19,370.54	$23,773.22	$263,707.47
8	$43,143.76	$17,651.97	$25,491.79	$238,215.68
9	$43,143.76	$15,809.16	$27,334.59	$210,881.09
10	$43,143.76	$13,833.14	$29,310.61	$181,570.48
11	$43,143.76	$11,714.28	$31,429.48	$150,141.00
12	$43,143.76	$9,442.24	$33,701.52	$116,439.48
13	$43,143.76	$7,005.95	$36,137.80	$80,301.67
14	$43,143.76	$4,393.55	$38,750.21	$41,551.47
15	$43,143.76	$1,592.29	$41,551.47	$0

How to Get a $400,000 Mortgage

If you’re feeling intimidated by the whole home-buying process, breaking it down into some manageable steps may make things a little less overwhelming.

First, Determine What You Can Afford

Reviewing your income, debts, monthly spending, and how much you’ve saved for a down payment can be a good place to start. This will help you decide how much of a down payment you can handle and how much house you can afford.

Compare Different Loans and Lenders

Once you know what you can afford, you can start looking for the loan type, interest rate, loan term, and lender that meet your needs.

Consider Getting Preapproved

If you’ve decided on a loan and lender, it can be a good idea to go through the preapproval process. Getting a letter from your lender that says you’re preapproved for a certain loan amount lets sellers know you’re a serious buyer. (And it can come in handy if you get into a bidding war for your dream home.)

Get Ready to Go House Hunting

When you have your loan lined up, you can look for and potentially make an offer on a house. And since you already know how much you can afford, you can target homes in that range.

Submit a Full Mortgage Application

Once your offer is accepted and you’re ready to move forward, your lender will ask you to complete a more formal loan application and provide additional financial information and documentation.

Prepare for Closing

While you’re waiting for a final loan approval and a closing date, you can shop for homeowners insurance, get a home inspection, and make sure you have all the money you need for your down payment and closing costs.

Take Ownership of Your New Home

At the closing you can sign all the necessary paperwork, hand over the funds needed to make the purchase, and — congratulations! — get the keys to your new home.

Recommended: First-Time Homebuyer Guide

The Takeaway

Researching the different costs you might have to pay if you plan to take out a $400,000 mortgage can help you stick to your budget and avoid unpleasant surprises.

The choices you make about the type of loan you get, the interest rate, loan term, and other costs, will all play part in how much you pay every month — and over the length of the loan. So it can be a good idea to run the numbers before you decide on a particular lender or loan.

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.

FAQ

How much is a $400,000 mortgage a month?

The monthly payment for a $400,000 mortgage could range from about $2,300 to more than $3,700, depending on several factors, including the interest rate and loan term.

How much income is required for a $400,000 mortgage?

Lenders will look at several factors besides your income to determine if you can afford a $400,000 mortgage. You can expect to be asked about your debt, credit history, assets, and the down payment you plan to make.

How much is a down payment on a $400,000 mortgage?

Your down payment may vary depending on the price of the house you choose, the type of loan you get, and if you want to avoid paying private mortgage insurance as part of your borrowing costs. Traditionally, lenders like to see a 20% down payment, which on a $500,000 home would be a $100,000 down payment and a $400,000 mortgage. But many lenders accept lower down payments.

Can I afford a $400,000 mortgage with a $70,000 salary?

Since your housing costs (monthly payments, insurance, etc.) would likely be more than half your monthly salary, it could be a challenge to afford a $400,000 mortgage on a $70,000 salary.

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Photo credit: iStock/svetikd

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

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

⁺Lock and Look program: Terms and conditions apply. Applies to conventional purchase loans only. Rate will lock for 91 calendar days at the time of preapproval. An executed purchase contract is required within 60 days of your initial rate lock. If current market pricing improves by 0.25 percentage points or more from the original locked rate, you may request your loan officer to review your loan application to determine if you qualify for a one-time float down. SoFi reserves the right to change or terminate this offer at any time with or without notice to you.

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.

SOHL0124062

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On a salary of $100,000 per year, as long as you have minimal debt, you can afford a house priced at around $311,000 with a monthly payment of $2,333. This number assumes a 6.5% interest rate and a down payment of around $30,000.

The 28/36 rule is often used as a guide when deciding how much house you can afford. The rule stipulates that you should not spend more than 28 percent of your salary on overall housing costs and no more than 36 percent on housing costs and your debt. On a salary of $100K with debts of about $250 per month, a house costing $311,000 just fits in your budget.

However, how much home you can afford depends on other factors also, such as where you intend to live and how much you have saved as a down payment.

This article looks at how all of these factors affect your home purchase and gives some examples of how much home you can realistically afford on a salary of $100,000.

What Kind of House Can I Afford With $100K a Year?

Another rule of thumb often applied when buying a home is to not spend more than three times your annual income on a home. If you earn $100,000 a year, that would be $300,000.

A salary of $100,000 is well above the national median income (according to Census data, the national median income was $74,580 in 2022). That puts you in a good position if you want to buy a home, particularly if the cost of living is low in the area that you are targeting. If you have substantial savings for a down payment and little debt, you’re even better positioned. Debt is important because lenders look at how much debt you have when they qualify you for a mortgage.

Your Debt-to-Income Ratio

Your debt-to-income (DTI) ratio is the amount of income you receive relative to the amount of payments you make each month to cover your debt. You’ll get better loan terms, and your monthly mortgage loan payments will be less, if you have less debt.

That’s why many experts also recommend the 28/36 rule. So, if you earn $100K, your housing costs should be less than $28,000, $2,333 a month, and your debt and housing costs should not exceed $36,000, or $3,000 a month.

Your Down Payment

Unless you qualify for a zero-down USDA or VA loan, most lenders will expect a down payment of between 3% and 20%. The more you put down, the more house you can afford, but as you think about your down payment amount, make sure you reserve funds for closing costs, moving costs, and an emergency fund for unexpected expenses.

Home Affordability

Homes are more affordable in certain areas. Some areas have a higher cost of living and higher property taxes.

Your credit score will also affect how much home you can afford. If you have a high credit score, you will qualify for a lower interest rate loan. If you pay less interest, you can borrow more and still meet your monthly payments.

Depending on where you want to live, the housing market might dictate how big a home you can afford. House prices are affected by the economic conditions, and low unemployment rates and healthy economic growth gives buyers more purchasing power. If buyers have more purchasing power, they can afford bigger loans, and this will push up house prices.


💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.

How to Afford More House with Down Payment Assistance

Some people, such as first-time buyers or certain professionals like nurses and teachers, can qualify for down payment assistance from federal, state, and local government, private entities, and charitable organizations. Assistance might be in the form of a low-rate loan, cash grant, tax credit, or a reduced interest rate.

Applying for down payment assistance can add weeks or months to your home buying timeline, but for more information, the U.S. Department of Housing and Urban Development (HUD) keeps a list of programs listed by state, county, and city.

Here are typical down payment amounts for various types of mortgages.

•   Conventional mortgages require a 3% down payment for first-time buyers

•   FHA mortgages require 3.5% down

•   VA mortgages require 0% down

•   USDA: These zero down payment loans serve low-income borrowers in rural areas.

Home Affordability Examples

Let’s take a look at some hypothetical examples for those wondering, “If I make $100K how much home can I afford?” These examples assume an interest rate of 6.5% and average property taxes.

Example #1: Low Down Payment and Significant Debt

Gross annual income: $100,000
Down payment: $10,000
Monthly debt: $1000

Home budget: $238,441

Monthly mortgage payment: $2,000

Payment breakdown:

•   Principal and interest: $1,444

•   Property taxes: $208

•   Private mortgage insurance: $264

•   Homeowner’s insurance: $83

Example #2: Bigger Down Payment, Less Debt

Gross annual income: $100,000
Down payment: $40,000
Monthly debt: $300

Home budget: $333,212

Monthly mortgage payment: $2,333

Payment breakdown:

•   Principal and interest: $1,853

•   Property taxes: $208

•   Private mortgage insurance: $188

•   Homeowner’s insurance: $83

How to Calculate How Much House You Can Afford

You need a budget to find out how much house you can afford. Keeping a budget will show you how much you are spending each month versus how much income you have. Whatever you have leftover after paying essentials like food, clothing, and utilities is how much you can afford to spend on housing.

You can also use a mortgage calculator to help you. Just plug in your own numbers to find out what your monthly payments would be.


💡 Quick Tip: Not to be confused with prequalification, preapproval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for preapproval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.

How Your Monthly Payment Affects Your Price Range

The more you can afford to pay each month for your mortgage and other housing expenses, the more house you can afford. However if you have significant debt payments each month, or you have a poor credit score that results in a higher interest rate for your loan, that will reduce the amount of loan you can afford and the price range.

Types of Home Loans Available to $100K Households

Four types of loans are the most common. These are conventional loans, FHA loans, USDA, and VA loans.

Conventional loans typically require a credit score of 620 or more, but the down payment can be as low as 3 percent. Remember that a lower down payment means higher monthly payments because you will have to borrow more.

FHA loans. With an FHA loan, home buyers with a credit score over 580 can borrow up to 96.5% of a home’s value. Home buyers with a lower credit score, between 500 to 579, can still qualify for a loan as long as they have a 10% down payment.

USDA: USDA loans are zero down payment financing for low-income borrowers in designated rural areas.

VA: VA loans also require no down payment and are available to qualified military service members, veterans, and their spouses.

The Takeaway

If you are looking to buy a home and would like a more realistic idea of what you can afford, first find out how much you are spending on necessities like food, clothing, transportation, and, most importantly, debt. What you have leftover is how much you can spend each month on housing expenses.

Once you have a grasp on your finances, you can use an affordability calculator to see how much of a house you can afford. The size of home that the amount will buy depends on the local housing market and the cost of living where you want to live.

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.

FAQ

Is $100K a good salary for a single person?

A salary of $100k is above the national median income (according to Census data, the national median income was $74,580 in 2022). This is a good salary, but you still might struggle to buy a home in areas with a high cost of living. The larger down payment you have, and the better your credit score, the bigger house you can buy.

What is a comfortable income for a single person?

A comfortable income for a single person is dependent upon where that person lives. The findings from a study using data from the Bureau of Labor Statistics to calculate the cost of necessities to determine a living wage shows wide variance existing among states. According to the study, Hawaii is the most expensive state, and singles require an annual salary of $112,411 to live comfortably. In Mississippi, you can live comfortably on $45,906 a year.

What is a liveable wage in 2023?

A liveable wage will vary depending on where you live. However, the Massachusetts Institute of Technology determined that $104,07 per year was a liveable wage before taxes in 2022. This was for a family of four with two working adults and two children.

What salary is considered rich for a single person?

According to Internal Revenue Service data, an income of $540,009 per year puts a person in the top 1% earnings category.

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Photo credit: iStock/Prostock-Studio

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

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

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^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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In the ever-evolving landscape of real estate, the U.S. foreclosure market often unveils key trends that will shape the future of home ownership. According to property data provider ATTOM , the number of housing units with foreclosure filings in March was 32,878, a drop of less than 1% from the previous month and a 10% decline from the previous year. Rob Barber, CEO of ATTOM, highlights that this ongoing “persistently hot” housing market is likely due to sizable homeowner equity.

Foreclosure starts increased nationwide by 2%, with notable spikes in states like New Hampshire, Illinois, and Florida. Moreover, while there was a 7% increase in bank repossessions from the previous quarter, there’s a notable 20% decline compared to a year ago, indicating some stabilization in the REO (Real Estate Owned) sector. The average time to foreclose showed a slight increase from the previous quarter, but continues a downward trend observed since mid-2020, with states like Louisiana, Hawaii, and New York having longer foreclosure timelines, contrasting with states like Montana, Virginia, and Texas, which boast shorter timelines. Borrowers should stay up to date on their mortgage payments and work closely with their lenders to explore options for assistance if needed.

Read on for the foreclosure rates in March 2024 – plus the five counties, or county equivalents, with the highest rates within those states.

50 State Foreclosure Rates

As previously noted, foreclosure rates saw a negligible drop compared to last month and to last year. Read on for the March foreclosure rates for all 50 states — plus the District of Columbia — beginning with the state that had the lowest rate of foreclosure filings per housing unit.

District of Columbia

Ranking in population between Vermont and Alaska, the country’s second and third least populous states, Washington, D.C. observed 167 foreclosures in March, up about 17% from the previous month. With a total of 350,372 housing units, the foreclosure rate of the nation’s capital was one in every 2,098 households, putting it above the state of Illinois (#1).

50. Vermont

In 49th place for population, the Green Mountain State ranked 50th for its foreclosure rate in March. Of the state’s 335,138 housing units, 11 homes went into foreclosure at a rate of one in every 30,467 households. Only four counties in the state saw foreclosures. They were (from highest to lowest): Rutland, Windsor, Washington, and Chittenden.

49. Montana

Listed as 44th in population, the Treasure State rated 49th again for its foreclosure rate this month. With 24 foreclosures out of 517,430 housing units, Montana’s foreclosure rate was one in every 21,560 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Wheatland, Chouteau, Deer Lodge, Richland, and Carbon.

48. South Dakota

The Mount Rushmore State nabbed the 48th spot once more for its foreclosure rate in March. Having 393,150 total housing units, the fifth-least populous state had a foreclosure rate of one in every 17,870 households with 22 foreclosures. The counties with the most foreclosures per housing unit were (from highest to lowest): Aurora, Codington, Minnehaha, Brown, and Meade.

47. West Virginia

Ranked 39th in population, the Mountain State claimed the 47th spot for the second month in a row. It has a total of 859,142 housing units, of which 58 went into foreclosure. This means that the foreclosure rate was one in every 14,813 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Hancock, Tyler, Fayette, Berkeley, and Cabell.

46. Oregon

The 27th most populous state ranked 46th for highest foreclosure rate in March. Of the Pacific Wonderland’s 1,818,599 homes, 124 went into foreclosure, making for a foreclosure rate of one in every 14,666 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Jefferson, Clatsop, Douglas, Clackamas, and Coos.

45. Kansas

The Sunflower State ranked 45th for highest foreclosure rate this month. With 1,278,548 homes and a total of 100 housing units going into foreclosure, the 35th most populous state’s foreclosure rate was one in every 12,785 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Morton, Clark, Logan, Kearny, and Bourbon.

44. Rhode Island

The eighth-least populous state placed 44th for highest foreclosure rate in March. A total of 38 homes went into foreclosure out of 483,053 total housing units, making the foreclosure rate for the Ocean State one in every 12,712 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Kent, Bristol, Washington, Providence, and Newport.

43. New Mexico

The 36th most populous state claimed the 43rd spot for highest foreclosure rate this month. Of the Land of Enchantment’s 943,149 homes, 82 went into foreclosure, making for a foreclosure rate of one in every 11,502 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Chaves, Eddy, Socorro, Lincoln, and Sandoval.

42. Mississippi

Ranked 34th in population, the Magnolia State experienced 121 foreclosures out of 1,324,992 total housing units. This puts the foreclosure rate at one in every 10,950 homes and into the 42nd spot this month. The counties with the most foreclosures per housing unit were (from highest to lowest): Grenada, Simpson, Union, Copiah, and Lee.

41. Washington

Sorted as 13th in population, the Evergreen State ranked 41st for its foreclosure rate in March. Of its 3,216,243 housing units, 323 went into foreclosure, making the state’s foreclosure rate one in every 9,957 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Pacific, Lewis, Pierce, Cowlitz, and Grays Harbor.

Recommended: Tips on Buying a Foreclosed Home

40. New Hampshire

The Granite State, and the 41st most populous state in the U.S., ranked 40th for highest foreclosure rate. New Hampshire saw 66 of its 640,335 homes go into foreclosure, making for a foreclosure rate of one in every 9,702 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Belknap, Coos, Sullivan, Merrimack, and Carroll.

39. Wisconsin

With 326 foreclosures out of 2,734,511 total housing units, America’s Dairyland and the 20th most populous state secured the 39th spot with a foreclosure rate of one in every 8,388 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Juneau, Iron, Rusk, Taylor, and Trempealeau.

38. Wyoming

The country’s least populous state claimed the 38th spot for highest foreclosure rate this month. With 273,291 housing units, of which 33 went into foreclosure, the Equality State’s foreclosure rate was one in every 8,282 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Carbon, Sweetwater, Campbell, Sublette, and Big Horn.

37. North Dakota

The Peace Garden State’s foreclosure rate was one in every 8,275 homes. This puts the fourth-least populous state — with 372,376 housing units and 45 foreclosures — into 37th place. The counties with the most foreclosures per housing unit were (from highest to lowest): Pembina, Hettinger, Kidder, Grant, and Bottineau.

36. Mississippi

Coming in at 19th in population, the Show-Me State took the 36th spot for highest foreclosure rate this month. Of its 2,795,030 homes, 348 went into foreclosure, making for a foreclosure rate of one in every 8,032 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Caldwell, Mississippi, Laclede, Dunklin, and Barry.

35. Virginia

With 455 homes going into foreclosure, the 12th most populous state ranked 35th for highest foreclosure rate in March. Having 3,625,285 total housing units, the Old Dominion saw a foreclosure rate of one in every 7,968 households. The counties and independent city with the most foreclosures per housing unit were (from highest to lowest): Franklin City, Lexington City, King And Queen, Dickenson, and Halifax.

34. Alaska

The Last Frontier saw 40 foreclosures this month, making the foreclosure rate one in every 7,938 homes. This caused the third-least populous state, with a total of 317,529 housing units, to claim the 34th spot. The boroughs with the most foreclosures per housing unit were (from highest to lowest): Anchorage, Matanuska-Susitna, Kenai Peninsula, Juneau, and Fairbanks North Star.

33. Nebraska

Ranking 37th in population, the Cornhusker State placed 33rd in March with a foreclosure rate of one in every 7,640 homes. With a total of 848,023 housing units, the state had 111 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Garfield, Nemaha, Scotts Bluff, Webster, and Sherman.

32. Hawaii

The Paradise of the Pacific, and the 40th most populous state, came in 32nd for highest foreclosure rate. Of its 560,873 homes, 80 went into foreclosure, making for a foreclosure rate of one in every 7,011 households. Only four of the five counties in the state saw foreclosures. They were (from highest to lowest): Hawaii, Kauai, Honolulu, and Maui.

31. Tennessee

Ranked 16th in population, the Volunteer State endured 442 foreclosures out of its 3,050,850 housing units. This puts the foreclosure rate at one in every 6,902 households and in 31st place for the second month in a row. The counties with the most foreclosures per housing unit were (from highest to lowest): Lake, Hardeman, Houston, Meigs, and Hardin.

Recommended: What Is a Short Sale?

30. Michigan

Ranked 10th in population, the Wolverine State secured the 30th spot with a foreclosure rate of one in every 6,706 homes. With a total of 4,580,447 housing units, the state had 683 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Clare, Shiawassee, Gratiot, St. Joseph, and Jackson.

29. Kentucky

With a total of 1,999,202 housing units, the Bluegrass State saw 301 homes go into foreclosure, thus landing in 29th place in March. This puts the foreclosure rate for the 29th most populous state at one in every 6,642 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Powell, Greenup, Clinton, Bath, and Jefferson.

28. Idaho

Ranked 38th in population, the Gem State received the 28th spot due to its 119 housing units that went into foreclosure this month. With 758,877 total housing units, the state’s foreclosure rate was one in every 6,377 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Custer, Bingham, Bonneville, Caribou, and Bonner.

27. Minnesota

Ranked 22nd for most populous state, the Land of 10,000 Lakes obtained the 27th spot for highest foreclosure rate in March. It has 2,493,956 housing units, of which 396 went into foreclosure, making the state’s foreclosure rate one in every 6,298 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Mille Lacs, Lac Qui Parle, McLeod, Redwood, and Isanti.

26. Colorado

The 21st most populous state ranked 26th for highest foreclosure rate this month. Of the Centennial State’s 2,500,095 housing units, 401 went into foreclosure, making for a foreclosure rate of one in every 6,235 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Phillips, Logan, Pueblo, Morgan, and Elbert.

25. Oklahoma

The Sooners State landed the 25th spot in March. With housing units totaling 1,751,802, the 28th most populous state saw 285 homes go into foreclosure at a rate of one in every 6,147 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Nowata, Caddo, Garfield, Custer, and Murray.

24. Louisiana

Sorted as 25th in population, the Pelican State placed 24th for highest foreclosure rate this month. Louisiana had a foreclosure rate of one in every 5,747 households, with 362 out of 2,080,371 homes going into foreclosure. The parishes with the most foreclosures per housing unit were (from highest to lowest): Richland, Terrebonne, Plaquemines, Iberville, and West Baton Rouge.

23. North Carolina

The ninth-most populous state claimed 23rd place for highest foreclosure rate. Out of 4,739,881 homes, 863 went into foreclosure. This puts the Tar Heel State’s foreclosure rate at one in every 5,492 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Perquimans, Gates, Anson, Northampton, and Vance.

22. Alabama

Listed as 24th in population, the Yellowhammer State came in 22nd for highest foreclosure rate this month. Of its 2,296,920 homes, 428 went into foreclosure, making for a foreclosure rate of one in every 5,367 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Hale, Calhoun, Mobile, Jefferson, and Walker.

21. Arizona

Sorted as 14th in population, the Grand Canyon State withstood 596 foreclosures out of its total 3,097,768 housing units. This puts the foreclosure rate at one in every 5,198 homes and into the 21st spot in March. The counties with the most foreclosures per housing unit were (from highest to lowest): Graham, Navajo, Yuma, Pinal, and La Paz.

Recommended: Are You Ready to Buy a House? — Take The Quiz

20. Arkansas

Listed as the 33rd most populous state, the Land of Opportunity ranked 20th for highest foreclosure rate this month. The state contains 1,371,709 housing units, of which 264 went into foreclosure, making its latest foreclosure rate one in every 5,196 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Prairie, Arkansas, Desha, Hot Spring, and Union.

19. Maine

Ranked 42nd in population, the Pine Tree State placed 19th for highest foreclosure rate in March. With a total of 741,803 housing units, Maine saw 143 foreclosures for a foreclosure rate of one in every 5,187 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Aroostook, Androscoggin, Oxford, Waldo, and Penobscot.

18. Georgia

Ranked eighth in population, the Peach State took the 18th spot for highest foreclosure rate this month. Of its 4,426,780 homes, 910 were foreclosed on. This puts the state’s foreclosure rate at one in every 4,865 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Lanier, Crawford, Henry, Haralson, and Johnson.

17. Utah

The Beehive State placed 17th for highest foreclosure rate in March. Of its 1,162,654 housing units, 245 homes went into foreclosure, making the 17th most populous state’s foreclosure rate one in every 4,746 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Emery, Tooele, Wasatch, Juab, and Washington.

16. Pennsylvania

The Keystone State had the 16th highest foreclosure rate for the second month in a row. The fifth-most populous state saw 1,266 homes out of 5,753,908 total housing units go into foreclosure, making the state’s foreclosure rate one in every 4,545 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Philadelphia, Delaware, Wayne, Fayette, and Bucks.

15. Iowa

The Hawkeye State had the 15th highest foreclosure rate in March. With 325 out of 1,417,064 homes going into foreclosure, the 31st most populous state’s foreclosure rate was one in every 4,360 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Audubon, Keokuk, Monroe, Clinton, and Jasper.

14. Texas

The Lone Star State withstood 2,885 foreclosures this month. With a foreclosure rate of one in every 4,040 households, this puts the second-most populous state in the U.S., with a whopping 11,654,971 housing units, into 14th place. The counties with the most foreclosures per housing unit were (from highest to lowest): Liberty, Madison, Atascosa, Jones, and Kaufman.

13. New York

With 2,144 out of a total 8,494,452 housing units going into foreclosure, the Empire State claimed the 13th spot in March. The fourth-most populous state’s foreclosure rate was one in every 3,962 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Orange, Greene, Suffolk, Nassau, and Rensselaer.

12. Massachusetts

The 15th most populous state ranked 12th for highest foreclosure rate this month. Of the Bay State’s 2,999,314 housing units, 775 went into foreclosure, making for a foreclosure rate of one in every 3,870 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Hampden, Plymouth, Worcester, Berkshire, and Essex.

11. California

The country’s most populous state ranked 11th for highest foreclosure rate in March. Of its impressive 14,424,442 housing units, 3,975 went into foreclosure, making the Golden State’s foreclosure rate one in every 3,629 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Lake, Mendocino, Madera, Kern, and Shasta.

Recommended: Your 2024 Guide to All Things Home

10. Nevada

Ranked 32nd in population, the Silver State took the 10th spot for highest foreclosure rate this month. With one in every 3,181 homes going into foreclosure, and a total of 1,288,357 housing units, the state had 405 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Lyon, White Pine, Clark, Lander, and Nye.

9. Ohio

The Buckeye State placed ninth in March with a foreclosure rate of one in every 3,167 homes. With a sum of 5,251,209 housing units, the seventh-most populous state had a total of 1,658 filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Knox, Cuyahoga, Shelby, Preble, and Defiance.

8. Indiana

The 17th largest state by population, the Crossroads of America landed the eighth spot this month with a foreclosure rate of one in every 3,129 homes. Of its 2,931,710 housing units, 937 went into foreclosure. The counties with the most foreclosures per housing unit were (from highest to lowest): Scott, Perry, Clinton, Howard, and Sullivan.

7. Maryland

Ranked 18th for most populous state, America in Miniature took seventh place for highest foreclosure rate in March. With a total of 2,531,075 housing units, of which 815 went into foreclosure, the state’s foreclosure rate was one in every 3,106 households. The counties and independent city with the most foreclosures per housing unit were (from highest to lowest): Kent, Dorchester, Prince George’s County, Baltimore City, and Calvert.

6. Delaware

The sixth-least populous state in the country, the Small Wonder nabbed sixth place this month. With one in every 3,051 homes going into foreclosure and a total of 451,556 housing units, the state saw 148 foreclosures filed. Having only three counties in the state, the most foreclosures per housing unit were (from highest to lowest): Kent, New Castle, and Sussex.

5. South Carolina

The 23rd most populous state had the fifth highest foreclosure rate in March with one in every 2,867 homes going into foreclosure. Of the Palmetto State’s 2,362,253 housing units, 824 were foreclosed on this month. The counties with the most foreclosures per housing unit were (from highest to lowest): Fairfield, Hampton, Dorchester, Darlington, and Spartanburg.

4. Florida

The third-most populous state in the country has a total of 9,915,957 housing units, of which 3,568 went into foreclosure. This puts the Sunshine State’s foreclosure rate at one in every 2,779 homes and into fourth place this month. The counties with the most foreclosures per housing unit were (from highest to lowest): Hernando, Citrus, Wakulla, Osceola, and Charlotte.

3. New Jersey

With a foreclosure rate of one in every 2,638 homes, the Garden State ranked third for highest foreclosure rate this month. The 11th most populous state contains 3,756,340 housing units, of which 1,424 went into foreclosure. The counties with the most foreclosures per housing unit were (from highest to lowest): Cumberland, Warren, Sussex, Salem, and Atlantic.

2. Connecticut

With 587 of its 1,531,332 homes going into foreclosure, the Constitution State had the second highest foreclosure rate at one in every 2,609 households. In this 29th most populous state, the counties that had the most foreclosures per housing unit were (from highest to lowest): Windham, New Haven, New London, Tolland, and Fairfield.

1. Illinois

The Land of Lincoln had the highest foreclosure rate in all 50 states in March. Of its 5,427,357 homes, 2,130 went into foreclosure, making the sixth-most populous state’s foreclosure rate one in every 2,548 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Gallatin, Jasper, Whiteside, Schuyler, and Massac.

The Takeaway

Of all 50 states, California had the most foreclosure filings (3,975), and Vermont had the least (11). As for the states with the highest foreclosure rates, Illinois, Connecticut, and New Jersey took the top three spots, respectively.

Two regions – the Great Lakes and the Mideast – tied for having the largest presence among the 10 states that ranked the highest for foreclosure rates. The states in the Great Lakes region were (from highest to lowest): Illinois, Indiana, and Ohio. The states in the Mideast region were (from highest to lowest): New Jersey, Delaware, and Maryland.

Four regions – the Far West, Southeast, Plains, and New England – tied for having the largest presence among the 10 states that ranked the lowest for foreclosure rates. The states in the Far West region were (from highest to lowest): Washington and Oregon. The states in the Southeast region were (from highest to lowest): Mississippi and West Virginia. The states in the Plains region were (from highest to lowest): Kansas and South Dakota. Finally, the states in the New England region were (from highest to lowest): Rhode Island and Vermont.

Discover more about home loans at SoFi.

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

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

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

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If you’re thinking about refinancing your home loan or paying off your mortgage early, you might request a mortgage payoff statement. The amount due on this document is likely to be different from your current balance because it includes interest owed until the payoff date and any fees due.

Read on to learn more about what a mortgage payoff statement or letter is and when you might need one.

What Is a Mortgage Payoff Statement?

Starting with mortgage basics, a mortgage is a loan used to purchase different types of real estate, including a primary home. A bank or other lender agrees to lend money, which the borrower commits to pay back monthly for a set period of time and with interest.

The different types of mortgage loans include conventional and government-insured mortgages and reverse mortgages.

There are jumbo loans, which exceed the dollar limits set by the Federal Housing Finance Agency, and home equity loans.

Say you have a mortgage and want to know exactly how much you’d need to pay to satisfy the loan. A mortgage payoff letter will tell you that magic number. Unlike your current balance, the payoff amount includes interest owed up to the day you intend to pay off the loan. It may also include fees that you’re on the hook for and haven’t paid yet.

Your monthly mortgage statement, on the other hand, only shows your loan balance and the amount due for your next monthly payment.


💡 Quick Tip: You’ve found an award-winning home. Enjoy an award-winning mortgage experience, too. SoFi has knowledgeable Mortgage Loan Officers to guide you through the process.

How Does a Mortgage Payoff Statement Work?

You can request a payoff statement from your loan servicer at any time. Note: Your mortgage servicer may be different from your lender. The company that manages your loan handles billing, accepts loan payments, keeps track of your principal and interest, and fields questions from borrowers.

You may request a payoff statement for any type of loan, including mortgages, student loans, personal loans, and auto loans. However, if you need your mortgage payoff statement, go to your mortgage servicer directly. The name and contact information of your mortgage servicer is included in your monthly statements.

When you make the request from the company that handles your mortgage servicing, you’ll need to provide the following details:

•   Your name

•   Address

•   Phone number

•   Your loan number

•   The date you want your payoff to be effective if you’re seeking to pay off your mortgage early.

Asking for a payoff statement does not necessarily mean that you intend to pay off your loan immediately. You may simply be determining whether or not paying off your mortgage early is feasible, for example. The request itself does not initiate the prepayment process.

Traditional lenders, such as brick-and-mortar banks, may mail you a paper mortgage payoff statement. Online lenders may send a payoff statement online.

Recommended: 5 Tips for Finding a Mortgage Lender

What Information Do Mortgage Payoff Letters Contain?

All mortgage payoff letters tend to contain similar information, including:

•   Payoff amount: The amount of money that would satisfy the loan.

•   Expiration date: The date through which the payoff amount is valid. The letter may also include an adjusted amount should you pay before or after the expiration date.

•   Payment information: The letter will also usually tell you who to make the final check out to and where to mail it.

•   Additional charges: You will be alerted to any additional fees and charges that you’ll need to include.

💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.

Do You Need a Mortgage Payoff Statement?

There are a few common situations in which you might need a payoff statement.

•   Refinancing a mortgage: When you refinance your mortgage, your chosen lender pays off your old home loan with a new one, preferably with a lower interest rate and possibly a new term. When you seek to refinance, your new lender may ask you to provide a payoff statement on your current loan.

•   Prepaying a mortgage: It’s possible to pay off a mortgage early. A payoff statement will show you exactly how much you’d need to pay to do so. Most prepayment penalties for residential home loans that originated after January 10, 2014, are prohibited. Still, check before you decide to prepay.

•   Working with a debt relief company: If you’re having trouble managing your debts, you’ve fallen behind on payments, or you otherwise need mortgage relief, you may choose to work with a debt relief company that can help negotiate with your lenders. The company will need to see payoff statements to get an idea of the scope of your debt.

•   Collections and liens: A lender might send you a payoff statement if you’ve fallen behind on your payments and they are sending your debt to a collection agency. In this case, the payoff statement may tell you how much you need to pay to stop the collection action.

   If your lender decides to seize your home to recoup unpaid mortgage payments, they may place a lien on the property. They may send a payoff statement that alerts you that your property will be seized if the specified amount isn’t paid in full.

There are other ways to figure out how much you owe on your mortgage loan. You can talk to your lender and ask for a verbal payoff quote. This will provide an estimate, but understand that it is not a legal agreement and isn’t binding.

The Takeaway

If you have a home loan, you may want to request a mortgage payoff statement, especially if you’re thinking about refinancing or paying off your mortgage early. Requesting the mortgage payoff letter does not initiate any formal processes, so it’s fine to think of it as an information-gathering exercise.

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.

FAQ

How do I get my mortgage payoff statement?

Contact your loan servicer to request your mortgage payoff statement.

When should I get my mortgage payoff statement?

Request your mortgage payoff statement when planning to prepay your mortgage, refinance, or consolidate debt.

How long does it take to get a mortgage payoff statement?

Generally speaking, you should receive your mortgage payoff statement within seven business days of your request.

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Photo credit: iStock/Vadym Pastukh

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

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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