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You’re ready to make home improvements. When looking for a trustworthy pro, it’s a good idea to get referrals, check references, get multiple bids, and nail down your financing. Let’s drill down to the details on how to find a good contractor for remodeling and what you need to ask as you move through the process.
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💡 Quick Tip: With SoFi, it takes just minutes to view your rate for a home loan online.

Ask for Referrals

Often the easiest way to find a reputable contractor for your project is through word-of-mouth referrals, whether from a friend, neighbor, family member, or colleague. Maybe you’ve watched your friend remodel the kitchen on social media; you may want to ask for the name of the contractor behind the job. Likewise, if you see a big construction project going up in your neighborhood, you can ask the homeowner for insight on the contractor behind it.

You might also want to ask owners of local lumber yards, where con­tractors do their bulk business, who’s reliable.

Recommended: Refinance Your Mortgage and Save

Search Online for the Top-Reviewed Contractors

Before hiring a contractor to renovate or remodel your home, it’s smart to do your due diligence and collect as many references as possible. But if you’re new to a town or neighborhood, for example, you may wonder how to find a contractor who works in your area.

This is where online reviews come in handy. There are many websites out there that offer lists of licensed contractors with accompanying reviews.

Look at Credentials and Portfolio

As you begin speaking with each potential contractor, ask to see a copy of their contractor’s license and insurance policy, and ask about any specialty certifications or membership to any professional organizations like the National Association of Home Builders, the National Association of the Remodeling Industry, or the National Kitchen & Bath Association.

Be aware that some states require contractor licensing; others, certification or registration. Registration doesn’t guarantee expertise; it’s merely a written record of who is performing the work. Many but not all states have websites where you can verify your pro’s license number. If your property is governed by a homeowners association or condo association, remember that the association may require proof of licensing.

Most reputable builders or contractors should have a website or basic social media presence, but if you can’t find one, request an email link to the contractor’s portfolio to see examples of past projects, from countertop replacement to closet remodels, as well as before and after photos.

Interview Candidates

Once you have a list of potential contractors narrowed down to your three top picks, it’s a good move to interview each of them before you go a step further. Maybe you won’t jibe with one of them, or perhaps another won’t seem as knowledgeable about certain components of construction or remodeling as you’d like for your particular project.

Treat hiring any contractor or handyman just like you would hiring an employee for your work, and if you don’t get a good feeling about the candidate, trust your gut. Communication is key for any successful project, and if the communication feels lacking in the interview process, it’s likely you’ll get frustrated down the line when all the moving parts of a remodeling project are also thrown into the mix.

Check References

After you’ve compiled a list of contractors and interviewed your top candidates, you’ll want to check references. Professionals should be able to provide a list of contacts from past jobs, and if they can’t do so right on the spot, that’s probably a red flag.

When checking references, you might want to ask past customers if the contractor completed the job on time and within budget, if there were any problematic interactions, and how the work has held up since.

Review the Cost Estimate

You could find the perfect contractor for the job, only to learn that the pro is far out of your budget.

It’s smart to get at least three competitive quotes from contractors before you move forward. A cost estimate should include labor, materials, change-order language, and a timeline, at minimum. Many contractors also have payment schedules so you will know when you’ll need to have your finances in order.

One positive if you have second thoughts about the expense: While the cost to remodel a house may not be cheap, if you keep your property modern and up to date, it’s possible you’ll recoup those dollars in resale value down the line.


💡 Quick Tip: Compared to credit cards and other unsecured loans, you can usually get a lower interest rate with a cash-out refinance loan.

Consider the Red Flags

If it’s your first time hiring a contractor, you may not know what to look for — or what’s a red flag. To save yourself headaches down the road, if the contractor checks any of the below boxes, the person’s professionalism might be in question and it’s probably wise to move on to the next candidate.

•   No “before” remodeling pictures

•   No website, social media presence, or reviews

•   No license or certification

•   No references

•   Slow communication

Recommended: The Cost of Living By State

The Takeaway

How to find a contractor for home renovations? Hiring a contractor is a process that you’d be smart to treat like a job interview. It’s a good idea to check references and credentials, get bids, look for red flags, and have financing lined up, whether you take out a personal loan or opt for a home equity line of credit (HELOC).

SoFi now offers flexible HELOCs. Our HELOC options allow you to access up to 95% of your home’s value, or $500,000, at competitively low rates. And the application process is quick and convenient.

Unlock your home’s value with a home equity line of credit brokered by SoFi.

FAQ

Before you sign on the dotted line for your remodeling job, there are some things about working with a contractor you need to know before locking one in.

What should a remodel contract include?

You’ll want to make sure the contract lays out the overall project budget and scope of work, when payments are due, and how to handle the inevitable changes that will arise.You’ll also want to have a dispute resolution and waiver of the lien clause so that a subcontractor cannot put a lien on your home, and a warranty for the work that is an acceptable time frame for the amount you’ve invested.

What questions should I ask a contractor?

When you’re meeting with each potential contractor, ask about past projects and if they have specific experience doing the type of renovation work that you’d like done. It’s also helpful to ask how they would approach the project and how much of an impact it’ll have on your ability to live in the home while work is taking place.

You’ll also want to inquire about insurance. Ask for proof that the contractor carries an insurance policy that protects you, the homeowner, as well. All of these are things a professional contractor should have and easily be able to produce.

What should you know before hiring a contractor?

Know that there are always bad actors who can take advantage of the huge sums of money that Americans pouring into real estate investment — and that no reputable contractor should be offended if you ask for references, proof of insurance, and all promises in writing.

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Photo credit: iStock/BOX39studio

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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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All loan terms, fees, and rates may vary based upon individual financial and personal circumstances and state.

You may discuss with your loan officer whether a SoFi Mortgage or a home equity loan from Spring EQ is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit brokered through SoFi. Terms and conditions will apply. Before you apply for a SoFi Mortgage, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and loan amount. Minimum loan amount is $75,000. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria.

SoFi Mortgages originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org). Equal Housing Lender. SoFi Bank, N.A. is currently NOT able to accept applications for refinance loans in NY.

In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

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A home inspection costs $300 to $400, and while it may not be required by law or your lender, if you’re purchasing a home, you’ll likely want to consider having a professional take a close look. You may even choose to make your contract contingent on the results.

Here’s what you can expect to get for your money.

What Do Home Inspectors Do?

The goal of a professional inspection is to help you avoid being surprised by structural defects, plumbing and electrical issues, or other significant problems when buying a home. In highly competitive local real estate markets, some buyers take the risk of waiving the home inspection (some even go so far as to buy a house sight unseen). But certified home inspectors are trained to find the problems you might not see when you walk through a home that’s for sale (even if you’ve seen the property multiple times).

Many states require inspectors to be licensed, and there are several professional organizations that require their members to follow certain standards of practice. Two of the largest national organizations for certified inspectors are the International Association of Certified Home Inspectors (InterNACHI) and the American Society of Home Inspectors (ASHI), but there are also many state associations.

Below is a list of some of the things on a home inspection checklist that an inspector will look at.


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

Roof Condition

Inspectors aren’t required to stand on a roof to inspect its condition, but they will review the materials used to cover the roof; the gutters and downspouts; any vents, flashing, skylights, etc.; and the general structure of the roof. They’ll also report any evidence of active leaks.

Exterior

This part of the inspection will generally include the exterior walls; the eaves, soffits, and fascia; windows and doors (including garage doors); walkways and driveways; stairs, steps, and ramps; porches, patios, decks, and the like; railings; and any issues that could cause problems with water intrusion.

Structural Soundness

This typically includes looking for cracks or other problems with the home’s foundation, the basement or crawlspace, and other structural components.

Heating and Cooling

The inspector will report on the types of systems used to heat and cool the home and if they are in working order.

Plumbing

This may include checking the main water supply shut-off valve and water heater; running the faucets and flushing all toilets; and reporting drainage problems for sinks, tubs, and showers. The inspector will look for damage, loose connections, leaks, and equipment that wasn’t properly installed.

Electrical

Besides checking a representative number of switches, light fixtures, and receptacles, the inspector will look at the type of wiring used in the home, the electrical panel, the main service disconnect, and any equipment that wasn’t properly installed or repaired. The absence of smoke detectors and carbon monoxide detectors also will be noted.

Insulation and Ventilation

The inspector may note any issues with the insulation used in the home, including the depth and type, and the exhaust systems in the kitchen, bathrooms, and laundry room.

Recommended: First-time Homebuyer Guide

What Isn’t Included in a Basic Home Inspection?

A basic inspection is a noninvasive, visual assessment of accessible areas of the property, so inspectors may not move rugs, furniture, or other items that block their view. If there’s a problem behind a wall or under the floors, the inspector may not catch it. And you shouldn’t expect the inspector to predict how long the roof, appliances, or HVAC system might last.

You may have to hire specialists, and that could add to your overall costs. Specialized inspections might include looking at the swimming pool, fireplace chimney and flue, a well and/or septic tank, and detached sheds and garages. You also may choose to get separate inspections to search for mold, termites, asbestos, lead paint, or radon gas, and to check for municipal code compliance.

While the cost of a single-family home inspection normally ranges from $300 to $500, the price can go significantly higher depending on the home’s square footage and the addition of specialized inspections.

You’ve probably already looked at numbers with a mortgage calculator or plan to. That’s more money you’ll need to come up with before or during your closing.

Why Get a Home Inspection?

A home inspection can cost hundreds of dollars, but getting one could save you thousands. After all, the home you’re buying could be the biggest investment you’ve ever made.

Once you receive your inspection report, it will be up to you to decide if and how you want to move forward with the purchase. As a buyer, you may have a few options, including:

•   If there are problems, you can give the seller a list of requested repairs (based on the inspection, not your taste) that must be completed and paid for as a condition of the sale.

•   You may request a credit, or a seller concession, that gives you enough to pay for the necessary repairs yourself.

•   You could back out of the deal altogether.

You don’t have to do anything, by the way. If you want the home and you think the price is fair, you can proceed with the transaction even if the report lists major issues. Especially in a hot market, you may not be able to use the report as a negotiation tool to lower the price or get the seller to pay for repairs. Still, you’ll have the information you need to make the best decision for your personal needs and goals.

Home Inspection Pros and Cons

Pros	Cons
Can give you an unbiased evaluation of the home you hope to buy	Adds a cost to the already expensive homebuying process
Can help you decide if repairs are in your DIY skill set or would require a pro	Waiving the inspection is risky (even if it makes your offer more appealing in a seller’s market)
May help you assess if the asking price is fair or if you should negotiate
May enable you to ask the seller to make repairs before you buy

Is an Inspection Necessary for a New or Renovated Home?

It might be tempting to waive the inspection if you’re buying new construction or a home that looks new thanks to a remodel. Fresh paint, that “new home smell,” and some professional staging can be a distraction for eager buyers. But even new construction can have problems, and an inspection can help find red flags.

Recommended: Tips to Qualify for a Mortgage

What Factors Into the Price of a Home Inspection?

When you’re shopping for an inspector, you may want to ask for a written estimate of how much you’ll be charged and a breakdown of costs. Here are some things that could affect the price:

Size

The larger the home, the longer it could take to complete the inspection and the inspection report. Here’s a breakdown of approximate costs based on square footage:

Home Size	Approximate Cost
Under 1,500 sq. ft.	$250
1,500 to 2,500 sq. ft.	$325
2,500 to 3,000 sq. ft.	$380
3,000 to 4,000 sq. ft.	$420
Over 4,000 sq. ft.	$500-plus

Age

Because it may take more time — depending on the condition of the home and the design — the inspection for an older home may cost more than for a newer build of the same approximate size.

Location

If the inspector must travel a long distance to get to the home, the cost estimate may be higher. (The inspector may charge by the mile or a negotiated amount.)

The Inspector

How much experience does the inspector have? Are they licensed by your state and/or certified by a professional association like ASHI or InterNACHI? You may have to pay extra for this expertise.

Additional Costs

The first price you’re quoted may not be the final price you’ll pay for an inspection. If you want additional inspections that require more expertise or specialized equipment, you can expect to pay much more. Inspecting detached structures on the property also may increase the price. Ask about those separate costs and if they’ll be listed on your written estimate.


💡 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 Long Does an Inspection Take?

A home inspection typically takes two to three hours onsite, and you may have to wait one or two days to get your inspection report. You may find it helps to research inspectors even before you find a home so you can move quickly when you’re ready to buy. That way you’ll have plenty of time to read the report and decide what you want to do about any points of concern.

Home inspection contingencies, which can allow buyers to get out of the contract if they find something they don’t like, usually have a tight deadline. You may have to send formal notice to the seller that you’re canceling the contract within seven days after signing the purchase agreement.

Are Any Fixes Mandatory After an Inspection?

A home inspector’s report isn’t a list of “must-dos.” Most repairs are negotiable. And you may decide not to press the seller for any fixes. But it’s important to be aware of the cost of home repairs that may be needed down the line.

In some cases, a buyer may be denied financing or insurance if the bank or insurer isn’t satisfied with the results of an inspection and the planned repairs. Those items likely would include dangerous structural or electrical defects and/or building code violations.

Tips on Choosing an Inspector

Word-of-mouth references can be a great place to start when you’re looking for a home inspector. There are also plenty of online sites that can help you find local inspectors. Once you have a few names, you can:

Once you have a few names, you can:

Look for Online Reviews

There are several sites that list inspectors, and some offer reviews. You also can ask the inspector for references.

Check Credentials

Is the inspector a member of a professional organization? You may want to ask to see a membership card. And don’t forget to ask for proof of licensing if it’s required in your state.

Ask About Experience

How long has the inspector been in the business? Experienced inspectors likely will have seen several types of homes and know where to look for problems.

Get Pricing Information

You can start by asking about the cost of a basic inspection and what it includes, then go from there. If the inspector does specialized tests you’re interested in (for mold, radon, asbestos, etc.), you can request to have those costs included in the estimate.

Compare Sample Reports

One way to gauge an inspector’s work may be to look at a past report and compare it to other companies’ reports.

Set the Date

Keep your timeline in mind as you consider who to hire. Things can move quickly in the mortgage process, and you don’t want your inspection to hold up the deal.

Try to be there when the inspector is working so you can see the home through an unbiased lens. If you can’t be there, you may want to ask your real estate agent to attend.

The Takeaway

It might be tempting to skip the home inspection to save money or time, or to make your offer more appealing. After all, the average home inspection cost is $300 to $400 and could go higher. But a home inspection can provide an important layer of protection and reassurance that the money you’ve budgeted for your new home will be well spent.

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.

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.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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A $450K mortgage payment is between $3,000 and $4,000 per month in the current interest-rate environment, depending on your loan type and term. This amount, however, does not include other variables that affect your payment, such as property taxes and insurance. Here’s the lowdown on what you can expect.

Cost of a $450,000 Mortgage

A $450K mortgage payment is primarily influenced by your loan term and interest rate. A 30-year loan at 7% interest would result in a monthly cost of $2,993 (not including taxes and insurance). But a 15-year loan at the same interest rate would have monthly payments of $4,044.


💡 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.

Monthly Payments for a $450,000 Mortgage

The amount you pay each month for a $450,000 mortgage payment is going to be somewhere between $2,993 and $4,044. However, keep in mind that there are a few variables that affect your monthly payment. These include:

•   Interest rate

•   Fixed or variable interest rate

•   Length of repayment period (15, 20, or 30 years)

•   Mortgage insurance

•   Property taxes

•   Property insurance

Another thing to consider are homeowners association (HOA) fees. Although they are paid directly to the HOA association and shouldn’t affect your monthly mortgage payment, these fees are an additional living expense.

If you’re a first-time homebuyer, it’s important to understand the true cost of owning a home because your monthly payment is more complicated than simply the amount you borrow. Housing costs and property taxes, for example, vary based on location. If you’re open to where you live, you may want to compare the cost of living by state. The best affordable places to live in the U.S. may pique your interest!

Where to Get a $450,000 Mortgage

Banks, credit unions, and online lenders can all provide you with a $450,000 mortgage. Make sure you shop around and compare lenders to get the lowest interest rate. As you apply, you’ll receive loan estimates that show the cost of a loan. While the annual percentage rate (APR) is certainly important, also compare expenses such as the loan origination fee and mortgage insurance.

What to Consider Before Applying for a $450,000 Mortgage

Before applying for a $450,000 mortgage, consider the cost difference between a shorter loan repayment period and a longer loan repayment period. For a 30-year mortgage with a 7% interest rate, the total interest paid during the life of the loan would be $627,791.

For a 15-year mortgage with the same interest rate, you would have a higher monthly payment, but the total amount you would pay in interest would be more than halved: just $278,050. For an extra $1,050 each month, a 15-year loan would save $349,739 in interest compared to a 30-year loan.

If you can’t afford a 15-year mortgage now, just remember that you can always do a mortgage refinance in the future.

$450,000 mortgage with a term of 30 years and a 7% interest rate:

Year	Beginning Balance	Monthly Payment	Total Interest Paid	Total Principal Paid	Remaining Balance
1	$450,000	$2,993.86	$31,355.19	$4,571.14	$445,428.86
2	$445,428.86	$2,993.86	$31,024.74	$4,901.59	$440,527.26
3	$440,527.26	$2,993.86	$30,670.41	$5,255.93	$435,271.33
4	$435,271.33	$2,993.86	$30,290.45	$5,635.88	$429,635.45
5	$429,635.45	$2,993.86	$29,883.04	$6,043.30	$423,592.15
6	$423,592.15	$2,993.86	$29,446.17	$6,480.17	$417,111.98
7	$417,111.98	$2,993.86	$28,977.71	$6,948.62	$410,163.36
8	$410,163.36	$2,993.86	$28,475.40	$7,450.94	$402,712.43
9	$402,712.43	$2,993.86	$27,936.77	$7,989.57	$394,722.86
10	$394,722.86	$2,993.86	$27,359.20	$8,567.13	$386,155.73
11	$386,155.73	$2,993.86	$26,739.88	$9,186.45	$376,969.27
12	$376,969.27	$2,993.86	$26,075.79	$9,850.54	$367,118.73
13	$367,118.73	$2,993.86	$25,363.70	$10,562.64	$356,556.09
14	$356,556.09	$2,993.86	$24,600.12	$11,326.21	$345,229.88
15	$345,229.88	$2,993.86	$23,781.35	$12,144.98	$333,084.90
16	$333,084.90	$2,993.86	$22,903.39	$13,022.95	$320,061.95
17	$320,061.95	$2,993.86	$21,961.96	$13,964.38	$306,097.58
18	$306,097.58	$2,993.86	$20,952.47	$14,973.86	$291,123.71
19	$291,123.71	$2,993.86	$19,870.01	$16,056.32	$275,067.39
20	$275,067.39	$2,993.86	$18,709.30	$17,217.04	$257,850.35
21	$257,850.35	$2,993.86	$17,464.68	$18,461.66	$239,388.69
22	$239,388.69	$2,993.86	$16,130.08	$19,796.25	$219,592.44
23	$219,592.44	$2,993.86	$14,699.01	$21,227.33	$198,365.12
24	$198,365.12	$2,993.86	$13,164.48	$22,761.85	$175,603.27
25	$175,603.27	$2,993.86	$11,519.03	$24,407.31	$151,195.96
26	$151,195.96	$2,993.86	$9,754.62	$26,171.71	$125,024.25
27	$125,024.25	$2,993.86	$7,862.67	$28,063.67	$96,960.58
28	$96,960.58	$2,993.86	$5,833.94	$30,092.39	$66,868.19
29	$66,868.19	$2,993.86	$3,658.56	$32,267.77	$34,600.41
30	$34,600.41	$2,993.86	$1,325.92	$34,600.41	$0

$450,000 mortgage with a term of 15 years and 7% interest rate:

Year	Beginning Balance	Monthly Payment	Total Interest Paid	Total Principal Paid	Remaining Balance
1	$450,000	$4,044.73	$30,942.64	$17,594.09	$432,405.91
2	$432,405.91	$4,044.73	$29,670.76	$18,865.97	$413,539.94
3	$413,539.94	$4,044.73	$28,306.94	$20,229.79	$393,310.15
4	$393,310.15	$4,044.73	$26,844.52	$21,692.20	$371,617.94
5	$371,617.94	$4,044.73	$25,276.39	$23,260.34	$348,357.61
6	$348,357.61	$4,044.73	$23,594.90	$24,941.83	$323,415.78
7	$323,415.78	$4,044.73	$21,791.85	$26,744.87	$296,670.91
8	$296,670.91	$4,044.73	$19,858.46	$28,678.26	$267,992.64
9	$267,992.64	$4,044.73	$17,785.31	$30,751.42	$237,241.23
10	$237,241.23	$4,044.73	$15,562.29	$32,974.44	$204,266.79
11	$204,266.79	$4,044.73	$13,178.56	$35,358.16	$168,908.62
12	$168,908.62	$4,044.73	$10,622.52	$37,914.21	$130,994.41
13	$130,994.41	$4,044.73	$7,881.70	$40,655.03	$76,144.79
14	$76,144.79	$4,044.73	$4,942.74	$43,593.99	$31,524.68
15	$31,524.68	$4,044.73	$1,791.33	$46,745.40	$0

It’s important to understand how costs vary between the different types of mortgage loans. A mortgage calculator can help you get a quick idea of what to expect before you commit to a home mortgage loan.

How to Get a $450,000 Mortgage

To get a $450,000 mortgage, you need a strong credit score, a steady source of income, and a low debt-to-income ratio. Other tips to qualify for a mortgage include things like saving up for a higher down payment and submitting all of the appropriate paperwork to your lender in a timely manner. If you’re just starting out on your home buying journey, a home loan help center may be a good resource.


💡 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.

The Takeaway

Payment on a $450,000 mortgage is influenced by a few different variables, such as your loan term and interest rate. Other factors that come into play include mortgage insurance, property taxes, and property insurance. A higher down payment and a stronger credit score may help lower your monthly payment.

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.

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FAQ

How much is $450K mortgage a month?

A $450,000 mortgage should cost you around $3,000 to $4,000. Just remember to also include property taxes and insurance in your calculations.

How much income is required for $450,000 mortgage?

You probably need to earn around $140,000 a year to afford a $450,000 mortgage. A general guideline is that all of your housing costs should be at or below 30% of your gross income. Assuming you opt for a 30-year loan, your mortgage payment, property tax, and insurance cost would total around $3,200 per month. Factor in a budget for utilities and repairs and your total annual cost would be $42,000 — that’s 30% of $140,000.

How much is a down payment on a $450,000 mortgage?

A conventional loan requires a down payment of at least 3%. Therefore, your down payment should be, at minimum, $13,500. A down payment of 20% ($113,000 on a property costing $563,000) would allow you to skip paying the additional cost of mortgage insurance.

Can I afford a $450K house with a $70K salary?

It’s not likely. Assuming you choose a 30-year loan, your monthly payment would be around $3,000, which would be more than 50% of your gross income — well over the 30% that is considered the maximum amount you should spend on housing. The only way to make it work would be to have a large down payment (more than $150,000) to lower the amount you would have to borrow and thus your monthly payments.

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

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

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

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

4 Kinds of Wills

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

•   A simple will

•   A joint will

•   A testamentary trust will

•   A living will

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

What Is a Simple Will?

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

•   State how you want your property bequeathed upon death

•   Provide guardianship specifications for minors

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

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


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

What Is a Joint Will?

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

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

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

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

What Is a Testamentary Trust Will?

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

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

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

What Is a Living Will?

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

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


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

The Takeaway

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

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

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

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

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Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, Social Finance. Inc. (SoFi) and Social Finance Life Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under Ladder Life™ policies. SoFi is compensated by Ladder for each issued term life policy.
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All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

Insurance not available in all states.
Experian is a registered service mark of Experian Personal Insurance Agency, Inc.
Social Finance, Inc. ("SoFi") is compensated by Experian for each customer who purchases a policy through Experian from the site.

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.

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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The Insurance Information Institute cites that the average cost of renters insurance across the United States is about $173 per year, according to their most recent data. That said, renters insurance premiums can vary widely based on where you live, your claims history, and your chosen coverage limits, among other factors.

Let’s take a look at renters insurance and what factors go into its cost.

What Is Renters Insurance?

Renters insurance policies offer similar coverage to homeowners insurance. The goal is to reimburse you for any losses that you suffer in an emergency. Imagine if you were renting a house and a leak flooded your clothing closet, destroying your entire wardrobe. Or if a burglar broke in while you were out and made off with your laptop and other electronics. These losses would be one level of pain. Not having insurance that could help you afford replacements would only add a whole other level to that!

It’s generally a good idea to purchase a renters insurance policy if you’re renting a home, regardless of whether it’s an apartment or a house. This holds true even if you are renting an apartment in a private home rather than an apartment complex. Your landlord may have homeowners insurance that is designed to reimburse them in the event of say, damage or a robbery. This however generally does not cover your assets in the event of a loss.


💡 Quick Tip: Online renters insurance can cover your belongings not just at home but also in your car and on vacation.

Average Cost of Renters Insurance by State

We’ve included the average annual renters insurance premiums for each state in the table below. This data is based on the latest figures from the Insurance Information Institute, a nonprofit organization that collects and shares data related to the insurance industry.

State	Average annual premium
Alabama	$225.00
Alaska	$186.00
Arizona	$164.00
Arkansas	$210.00
California	$171.00
Colorado	$161.00
Connecticut	$180.00
Delaware	$151.00
D.C.	$159.00
Florida	$182.00
Georgia	$212.00
Hawaii	$176.00
Idaho	$148.00
Illinois	$157.00
Indiana	$164.00
Iowa	$136.00
Kansas	$162.00
Kentucky	$157.00
Louisiana	$247.00
Maine	$148.00
Maryland	$160.00
Massachusetts	$172.00
Michigan	$181.00
Minnesota	$134.00
Mississippi	$256.00
Missouri	$172.00
Montana	$153.00
Nebraska	$143.00
Nevada	$179.00
New Hampshire	$147.00
New Jersey	$154.00
New Mexico	$180.00
New York	$173.00
North Carolina	$160.00
North Dakota	$116.00
Ohio	$162.00
Oklahoma	$226.00
Oregon	$154.00
Pennsylvania	$152.00
Rhode Island	$183.00
South Carolina	$186.00
South Dakota	$118.00
Tennessee	$187.00
Texas	$216.00
Utah	$147.00
Vermont	$151.00
Virginia	$152.00
Washington	$158.00
West Virginia	$179.00
Wisconsin	$128.00
Wyoming	$146.00
United States average	$173.00

Top 5 Most Expensive States for Renters Insurance

According to data from the Insurance Information Institute, the most expensive state for renters insurance in the nation is Mississippi. Renters in the Magnolia State pay an average of $256 per year for renter’s insurance. Let’s look at the top five:

State	Average annual premium	State ranking by cost
Mississippi	$256.00	1
Louisiana	$236.00	2
Oklahoma	$226.00	3
Alabama	$225.00	4
Texas	$216.00	5

Mississippi and Louisiana are expensive states in terms of renters insurance because of their proximity to the coast. Being right on the Gulf Coast means residents are often vulnerable since hurricanes may first make landfall in these areas. The risk of loss is higher than inland.

Oklahoma, Texas, and Louisiana all lie in the infamous “Tornado Alley,” which is a strip of states, bordered by the Dakotas to the north and Texas to the south, that is historically prone to fiercely damaging tornadoes. Combined, these factors have resulted in higher renters insurance premiums due to each location’s heightened susceptibility to wind and storm damage.

Top 5 Least Expensive States for Renters Insurance

North Dakota is the least expensive state for renters insurance in the United States, according to data gathered by the Insurance Information Institute. North Dakotans pay an average of $116 per year for renters insurance coverage.

State	Average annual premium
North Dakota	$116.00
South Dakota	$118.00
Wisconsin	$128.00
Minnesota	$134.00
Iowa	$136.00

In general, renters policies are lower in areas that aren’t subject to extreme weather (like hurricanes and tornadoes) and that have low crime rates.

What Factors Determine Cost of Renters Insurance?

The cost of your renters insurance may be influenced by a multitude of factors, the most prominent being the following:

•   Coverage limits

•   Deductible

•   Claims history

•   Location

•   Pets

•   Added coverage

Understanding these variables can go a long way towards reducing your costs and helping you choose the renters insurance policy that best suits your needs.

Coverage Limits

This is one of the key factors impacting the costs that you can control. Most insurance companies will give you a choice between higher and lower limits on your renter’s insurance policy.

Coverage limits are the maximum amounts an insurer is willing to pay in the event of a covered claim. There are different kinds of coverage (more on that below), and the limits offered usually range from as low as $10,000 in personal property coverage (the items in your home that could be damaged or lost) to as high as $500,000 in liability coverage (this be tapped if someone got injured at your house).

Generally speaking, the more insurance coverage you need, the higher your costs.

Deductible

The deductible is the other major component of your renter’s insurance costs that you can influence. In the event you file a claim, the deductible is the amount you agree to first pay out of pocket before renters insurance will kick in.

Your renters insurance deductible transfers risk from the insurer to you, when it comes to losses incurred in a covered claim. Consequently, insurers are willing to charge you a lower premium if you opt for a higher deductible, as this reduces how much they need to pay out. As you might guess, if you want a low deductible, so you would pay as little out of pocket as possible, your rates will be higher.

Depending on your insurance provider, your optional deductible will usually range anywhere from $0 to $2,000. In some instances, insurance providers will allow you to pick your deductible as a percentage of your total insurance limit, for example, if your policy limit is $10,000 and your deductible allotment is 10%, your deductible will effectively be $1,000 for each claim filed.

Claims History

Similar to your FICO score, insurance companies use what’s called a “CLUE” report (Comprehensive Loss Underwriting Exchange) to track your history when it comes to filing insurance claims. This report contains information regarding all insurance claims filed within the past 5 to 7 years, regardless of whether you move or change insurer.

Repeated claims with hefty payouts can be a red flag for insurers and result in a hike to your insurance premiums. Beware that even claims filed under other types of insurance policies, like homeowners insurance, can impact your renters insurance premium.

Location

You know that saying about the three most important things in real estate are location, location, location? Well, in terms of renters insurance, location isn’t the only thing, but it’s a major variable in terms of how much you will pay. Are you renting a cabin in the woods, in a low-crime rural area? Or are you moving into an apartment in the middle of a major city, where robberies are common? Or are you perhaps planning on signing a lease for the sweetest beach shack, just steps from the shore? The location of your rental will impact how expensive your premium is.

Behind the scenes, insurance actuaries rely on complex formulas to price your premium; these take many factors into account, including the risk of natural disasters, crime, and fire, among other factors.

Depending on how risky the insurer perceives your area to be, expect to be charged a higher premium if you live in an area that’s especially prone to crime or natural disasters.

Pets

While we all love our pet pals, it’s fairly commonplace for pet owners to be charged higher premiums if they live with a furry friend. Regardless of how sweet your pet may be, insurers deem pets a liability risk, particularly when it comes to things like bites, scratches, and damage to personal property. Your renters policy will potentially pay out if your critter bites a guest or even nips someone while you are walking it in the lobby of your apartment building.

In some instances, insurers may be unwilling to insure certain types of pets; these are typically certain breeds of dogs or exotic animals deemed “higher risk.” Check with your insurer to verify whether or not your pet is covered under your renters insurance policy.

Added Coverage

Your policy will likely include standard coverage for personal property, liability, and loss of use (meaning expenses incurred if you can’t live in your usual dwelling) offered through your standard rental insurance policy. In addition, many insurers offer a suite of optional coverages, riders, and endorsements that you can tack onto your renter’s insurance policy to best suit your needs.

Naturally, added coverage comes with added cost. However, as renters insurance is fairly affordable, it usually adds only a few dollars a month.

Depending on your personal assets, it may be worthwhile to consider some of these optional coverages. Some of the most common add-ons/endorsements/riders offered through insurers are as follows:

•   Scheduled personal property: This ups the coverage limit for a specific named item or items that would fail to be fully covered under the policy limits of your standard renters insurance.

•   Replacement cost: Typically, an insurance policy will reimburse you for the actual cash value of an item. So if your 5-year-old laptop is stolen or destroyed, you’d be paid the current value of it. With replacement cost coverage, the depreciation is eliminated from the calculation of your property’s value, resulting in a higher payout in a covered claim.

•   At-home business: This covers damages to any business equipment you have at home that isn’t covered under a standard renters policy.

•   Pet damage: This sometimes allows you to add coverage for property damage and liability caused by pets that isn’t covered under your standard renters policy. Exclusions may apply for specific breeds or types of pets.

•   Earthquake coverage: This covers damage to your property caused by an earthquake, which isn’t typically covered under renter’s insurance.

•   Identity theft: This covers costs incurred if you’re ever the victim of identity theft, as well as fees for expert assistance when it comes to restoring your identity and resolving any fraudulent activity.

What’s Covered by Renters Insurance

The majority of renters insurance policies provide the following standard coverages:

•   Personal property: This covers any loss or damage to your possessions due to a covered event, such as fire or theft.

•   Liability: This covers any property damage or bodily injury costs that you’re found liable for in the event of a covered claim.

•   Loss of use: Also known as “additional living expenses”, this covers the costs of temporary housing in the event your rental is rendered unlivable due to a covered loss.

•   Medical payments to others: This covers the medical costs of guests that are injured on your property. Unlike liability insurance, this does not require you to be legally liable for any injuries.

Most insurance providers will allow you to adjust the limits on these coverages to suit your needs. Keep in mind, this will likely impact your renters insurance costs; more coverage will probably mean higher premiums.

Recommended: What Does Renters Insurance Cover?

Do You Need Renters Insurance?

Legally, you are not required to purchase renters insurance. However it’s advisable for most individuals to purchase renters insurance, as your landlord’s homeowners insurance policy will not cover any losses or damage to your personal property; nor will it typically cover any liability for bodily injury or property damage that occurs while the property is under lease.

Certain rental properties will require you to purchase and maintain an adequate renters insurance policy as part of your lease agreement. Make sure to check with your landlord to fully understand what your contract requires.


💡 Quick Tip: Did you know that, in most states, landlords can require tenants to carry a renters insurance policy? Fortunately, the average monthly cost is just $15.

Are There Ways to Save on Renters Insurance?

There are a variety of ways you can save on your renters insurance costs, these include bundling your insurance policies under one insurer, increasing the size of your deductible, and generally staying safe and claim-free. Here’s a closer look:

•   Bundle your insurance policies: Most insurance companies offer discounts for purchasing multiple policies through the same company. Purchasing renters insurance in tandem with other policies, like life or auto insurance, can result in cumulative discounts across all your insurance policies.

•   Increase your deductible: Raising the amount of your deductible increases your share of the costs in the event of a covered claim and consequently can lower the cost of your premiums.

•   Pay your entire premium at once: Some insurance companies offer a discount for paying your entire premium upfront as one annual payment rather than in monthly or quarterly installments. Check with your provider to see if they offer lump sum payment discounts.

The Takeaway

Renters insurance is relatively inexpensive when compared to other types of coverage, like homeowners, auto, or health insurance. However, it can prove invaluable in the event of any emergency that occurs on your rental property.

It’s a good idea to purchase a renters insurance policy when renting a home. Remember that your landlord’s homeowners insurance policy typically only covers their interests and generally will not reimburse your costs in the event of any incidents. Imagine losing all your possessions, or even just all of your clothes, to a fire. Or having a burglar break in and steal your electronics. Renters insurance can help minimize the pain by helping pay for you to replace what you’ve lost. That kind of peace of mind is well worth the usually inexpensive premiums these policies charge.

The Takeaway

Renters insurance is relatively inexpensive when compared to other types of coverage, like homeowners, auto, or health insurance. However, it can prove invaluable in the event of any emergency that occurs on your rental property.

It’s a good idea to purchase a renters insurance policy when renting a home. Remember that your landlord’s homeowners insurance policy typically only covers their interests and generally will not reimburse your costs in the event of any incidents. Imagine losing all your possessions, or even just all of your clothes, to a fire. Or having a burglar break in and steal your electronics. Renters insurance can help minimize the pain by helping pay for you to replace what you’ve lost. That kind of peace of mind is well worth the usually inexpensive premiums these policies charge.

Looking to protect your belongings? SoFi has partnered with Lemonade to offer renters insurance. Policies are easy to understand and apply for, with instant quotes available. Prices start at just $5 per month.

Explore renters insurance options offered through SoFi via Experian.

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Photo credit: iStock/dragana991

Insurance not available in all states.
Experian is a registered service mark of Experian Personal Insurance Agency, Inc.
Social Finance, Inc. ("SoFi") is compensated by Experian for each customer who purchases a policy through Experian from the site.

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.

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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