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A wrap-around mortgage is a form of seller financing that benefits the seller financially and helps buyers who can’t qualify for a traditional mortgage.

There are risks associated with this kind of creative financing, and alternatives to consider.

What Is a Wrap-Around Mortgage?

Traditionally, a buyer weighs the different mortgage types and obtains a mortgage loan to pay the seller for the home. The seller’s existing mortgage gets paid off, with any extra money going to the seller.

With a wrap-around mortgage, a form of owner financing, the original mortgage is kept intact, and the funds a buyer needs to purchase the home are “wrapped around” the current balance.

How Does a Wrap-Around Mortgage Work?

First, the seller must have an assumable mortgage and lender permission to wrap the mortgage. The seller and buyer agree on a price and down payment.

The buyer signs a promissory note, vowing to make agreed-upon payments to the seller. The seller might transfer the home title to the buyer at that time or when the loan is repaid.

The seller continues to make regular mortgage payments to their lender, keeping any monetary overage.

To make this feasible and worthwhile to the seller, the buyer typically pays a higher interest rate than what’s being charged on the original loan (on which the seller is still making payments).

Let’s say you want to sell your home for $200,000, and you still owe $75,000 on your mortgage at 5%. You find a buyer who is willing to pay your price but who can’t get a conventional mortgage approved.

Your buyer can give you $20,000 for a down payment. The two of you will then sign a promissory note for $180,000, at, say, 7%. You’ll make a profit on the spread between the two interest rates and the difference between the sale price and original mortgage balance.

If you’re crunching numbers, a mortgage payment calculator can help.

What Are the Advantages of a Wrap-Around Mortgage?

Here are ways that a wrap-around mortgage can benefit the buyer as well as the seller.

Benefits for the buyer:

•   A carry-back loan allows you to buy a house that you might not otherwise qualify for, perhaps because of low credit scores.

•   As long as a seller is willing to sell to you under this arrangement, your financing is essentially approved without your needing to do anything else.

•   You’ll pay no closing costs on the loan.

•   If you are self-employed, you likely won’t need to provide statements from past income. The seller may only be interested in your ability to pay now.

Benefits for the seller:

•   You don’t need to wait for a buyer to be approved for financing.

•   You can charge a higher interest rate than what you’re paying, allowing you the opportunity to create steady cash flow and make a profit.

•   In a buyer’s market, where the supply of homes for sale is greater than demand, your willingness to offer a wrap-around mortgage can make you stand out.

Are There Risks With Wrap-Around Mortgages?

Yes. Wrap-around mortgages come with risks for both buyers and sellers.

Risks for the buyer:

•   You’ll likely want to pay an attorney to review the agreement. If you don’t, then you’re assuming more of the risks as described in the next two bullet points.

•   You are putting your trust in the seller. If they don’t keep up the mortgage payments on the original loan, the home could go into foreclosure. (You could ask to make payments directly to the lender, which the seller may or may not agree to.)

•   If the seller has not told their lender about the arrangement, this could lead to problems. If the original mortgage has a due-on-sale clause, the financial institution could demand payment in full from the seller.

Risks for the seller:

•   The buyer may not make payments on time — or could stop making them altogether. If this happens, you still owe mortgage payments to your lender.

•   Any lag in making your payments can have a significant negative impact on your credit scores, making it more challenging to get good interest rates on loans.

•   Suing the buyer for past-due funds can get expensive, and if the buyer doesn’t have the money to pay you, this may not provide you with any real mortgage relief.

If you’re shopping for a mortgage, it can make sense to explore alternatives.

Alternatives to Wrap-Around Mortgages

Alternatives can include the following:

•   FHA loans

•   VA loans

•   USDA loans

Here’s an overview of each.

FHA Loans

With loans insured by the Federal Housing Administration, FHA-approved lenders can offer low down payments while easing up on credit scores required to qualify.

VA Loans

The U.S. Department of Veterans Affairs offers low-interest-rate VA loans directly to qualifying borrowers (based on service history and duty status) and backs loans made by participating lenders.

USDA Loans

The U.S. Department of Agriculture guarantees USDA loans for qualifying rural Americans who have low to moderate levels of income. The USDA also offers funding to improve homes to safe and sanitary standards.

Fund Your Property Purchase With a SoFi Home Loan

A wrap-around mortgage could sound enticing, but buyer beware. Taking time to repair damaged credit or looking into other types of loans might make more sense.

Questions about getting a mortgage? Find answers in the SoFi mortgage help center.

When you’re ready to apply for a mortgage, check out what SoFi offers. Fixed-rate mortgages with a variety of terms? Check. A down payment of just 3% for qualifying first-time homebuyers? Check. A simple online application? Check.

You can find your rate in just minutes.

FAQ

Is a wrap-around mortgage a good idea?

This type of mortgage has benefits and risks for both the buyer and the seller.

What is an example of a wrap-around mortgage?

Let’s say a buyer can’t get traditional financing but agrees to purchase a $250,000 house from the seller, with some down payment. The seller still owes $50,000. The buyer agrees to make payments to the seller on the purchase price, and the seller uses a portion of that money to make the usual mortgage payments. The seller profits from charging a higher interest rate than that of the original mortgage.

Who is responsible for a wrap-around loan?

The buyer will be responsible for making payments to the seller according to the agreement signed by the two parties. The seller will be responsible for continuing to make payments on the original mortgage until it is paid off. So both parties have responsibilities to fulfill.

Can wrap-around loans help a buyer purchase a home?

Yes. The key benefit for buyers is that seller financing helps them purchase a home that they otherwise may not have been able to do.

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Photo credit: iStock/Tatiana Buzmakova

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.

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If you’re thinking about buying an apartment, you’ll probably look at co-ops and condos rather than single-family homes.

Read on to understand the difference between condos and co-ops, the forms an apartment might take, and who might be best suited to buy one.

What Is an Apartment?

An apartment is a property within a larger building, and especially in big cities, it’s not uncommon to hear that someone is buying an apartment.

When a buyer is considering different types of homes, the price of an apartment often beats that of a single-family home with land.

Both co-ops and condos allow residents to use the common areas, including pools, gyms, and courtyards. If you buy a condo, you’ll own everything within your unit and have an interest in the common elements. If you “buy a co-op apartment,” that really means you’ll hold shares in the residents’ housing cooperative, a nonprofit corporation that owns the property, and will have the right to live in one of the co-op units. Shares are based on the market value of each unit.

Getting a mortgage for a co-op might be harder than for a condo. You aren’t actually buying real estate with the former.

And monthly fees tend to be higher at a co-op than for a condo.

Then again, the co-op fee may cover more, co-op units tend to cost less per square foot, and the closing costs of a co-op deal are often lower.

What Are the Types of Apartments?

Diving further into the definition, the apartment shape-shifts. While they may all technically be apartments, each comes with its own quirks and defining characteristics.

Layouts or terminology may vary by building or region.

Studio

The ultimate open-concept space, a studio is a one-room apartment with a bathroom. The bedroom, living room, dining room, and kitchen are all in a single room.

Alcove Studio

An alcove studio, if L shaped, has a built-in nook to signify where a bed and small dresser could go. Older units might put the alcove in the middle of the room. If an average studio is 550 square feet, the alcove might add 40 — not much, but a big dose of privacy.

Alcove studio apartments are often more expensive than studios but cheaper than true one-bedroom units.

Convertible Apartment

A step up, size-wise, from a traditional studio, a convertible apartment may have a bedroom or a flex space that could be used as an office. The space might have a sliding glass door or partial wall that has an opening instead of a door.

By some definitions, a convertible apartment is bigger than a typical studio but doesn’t quite have the square footage of a one-bedroom unit. A bedroom, according to New York City regulations, must be at least 80 square feet and have space for at least one window of 12 square feet or larger.

Micro-Apartment

The micro-apartment might be the perfect fit for a minimalist. Usually micro-apartments are even smaller than studios, at about 350 square feet, and are popular in densely populated, high-cost cities. Micro-apartments offer enough space for a bed, sitting area, kitchenette, and tiny bathroom.

A micro-apartment might have a Murphy bed or a futon that folds into a bed at night.

Loft

Lofts are typically retrofitted from a factory or other commercial building. In one open space (except the bathroom), lofts have high ceilings, large windows, and perhaps an overall industrial feel.

Garden Apartment

A garden apartment can refer to two distinct types of units, so buyers should pay attention. A garden apartment can be a unit in the basement or on the ground floor of a small apartment building.

A garden apartment can also mean apartment buildings surrounded by greenery in either an urban or suburban area. These buildings are typically no higher than three stories and have access to green space, such as a park or trail.

High-Rise

A high-rise apartment building has 12 floors or more. When apartment buildings enter high-rise territory, residents can expect one or more elevators.

Mid-Rise

A mid-rise apartment building is between five and 11 stories tall. Expect an elevator in the building.

Low-Rise

A low-rise apartment building is anything shorter than five stories. With a low-rise apartment, there’s no guarantee of an elevator.

Railroad Apartment

A railroad apartment is laid out like a train car, meaning one room leads to the next without a hallway. Railroad apartments are typically found in older buildings or converted properties.

Walk-Up

In a walk-up, residents should expect to, well, walk up to their apartment. The designation implies that the building doesn’t have an elevator.

Walk-up apartments are often more affordable than elevator-accessible units, as stairs may be inconvenient or unmanageable.

Should You Live In an Apartment? Who Are Apartments Best Suited for?

Apartment living isn’t for everyone. Those best suited to an apartment might want some or all of the following:

•   City living. Apartments are often in densely populated areas, meaning residents want to be near the hustle and bustle.

•   Limited space. Apartments typically have less space than traditional family homes, so they are often best suited for small families or singles.

•   Low maintenance. Exterior repairs and maintenance, and even some utilities, are up to the building at large, not the resident.

•   Relatively good price. Apartments are typically more affordable than nearby single-family homes, meaning they could be a good fit for the price-sensitive buyer.

•   Minimal lifestyle. Those who don’t need a lot of space may prefer a condo or co-op unit to a sprawling home.

Pros and Cons of Living in an Apartment

As with any type of home, living in an apartment comes with its benefits and drawbacks.

	Pros	Cons
Outdoor space	Residents aren’t responsible for maintaining exterior or green space.	Limited or no private green outdoor space.
Maintenance	Residents are typically responsible for their unit alone.	The monthly fee can be high and on the rise.
Group living	Neighborly vibe and shared amenities that could include a gym, pool, rooftop patio, and business center or community room.	Close proximity to neighbors, often with one or more shared walls, floors, or ceilings.
Square footage	Apartments are often smaller, which means less upkeep, from cleaning to repairs.	Smaller spaces can mean less storage and room to spread out.
Affordability	Apartments tend to be more affordable than single-family homes in the same area.	Condos and co-op units don’t appreciate as quickly as single-family homes.

The Takeaway

If you’re interested in buying an apartment, you’re probably talking about a condo or co-op unit. Apartments come in all shapes and sizes and can be a little trickier to finance than traditional homes.

SoFi can help. Are you a first-time homebuyer? Check out the guide to first-time home buying.

Also head to the help center for home loans and learn more.

3 Home Loan Tips

1. Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, allow fixed rate mortgages with as little as 3% down for qualifying first-time homebuyers.
2. 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.
3. Not to be confused with pre-qualification, pre-approval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for pre-approval 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.

FAQ

What are the costs of owning an apartment?

Apartments come with a monthly fee. Condo fees are usually lower than a co-op’s, because the latter fee can include payment for the building’s mortgage and property taxes, utilities, maintenance, and security.

Is it a good idea to buy an apartment?

For a buyer focused on less maintenance and typically limited square footage, an apartment may be the right fit.

What should I look for when renting an apartment?

One of the first things to ask when renting an apartment is what is included. Does rent include any utilities, laundry in the unit, or parking?

It’s a good idea to also ask about credit requirements, application fee, security deposit, and terms of the lease.

What credit score do you need to rent an apartment by yourself?

All landlords are different, but many look for a FICO® score above 600. Not all property managers look at credit scores, though.

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Photo credit: iStock/hrabar

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

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.

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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Looking to buy a manufactured home, a boat, or a piece of equipment for your business? You may need a chattel mortgage.

Chattel mortgages are used to finance movable assets separately from the land they occupy. They come with a higher cost than a traditional mortgage, so manufactured home dwellers who qualify for a standard mortgage will save money by choosing that route.

Here’s what you need to know about how chattel loans work and when you might want to look for alternative financing.

What Is a Chattel Mortgage?

First of all, a chattel mortgage is used for personal property, not real property. Real property includes land and property that cannot be easily removed from the land.

When a chattel mortgage is used for a large, movable asset like a manufactured home — called a mobile home before June 15, 1976 — or a piece of equipment (the “chattel”), the asset is held as collateral on the loan. If the borrower defaults on the loan, the lender can recoup costs by selling the asset.

A chattel loan may have a lower interest rate than an unsecured personal loan but a higher rate than a traditional mortgage.

How Does a Chattel Mortgage Work?

Chattel mortgages are used in two main instances: when an asset can be moved or when the land the asset sits on, or will, is leased. (In fewer cases, a chattel loan may be used when a borrower doesn’t want to encumber their owned land with a loan, as when land is owned jointly in a trust.)

Applying for a chattel loan is similar to applying for other types of loans, such as home equity loans and personal loans. The lender will look at your creditworthiness and ability to repay the loan before making a decision.

Chattel loans are typically small, with relatively short terms, but usually require no appraisal, title policy, survey, or doc stamps.

What Are Chattel Loans Used For?

Here are some of the most common applications for chattel loans.

Manufactured Homes

Manufactured homes are built in a factory on a permanent chassis and can be transported in one or more sections. Formerly known as mobile homes, they’re designed to be used with or without a permanent foundation, but must be elevated and secured to resist flooding, floatation, collapse, or lateral movement.

Many are titled as personal property. Manufactured housing that is titled as personal property or chattel is only eligible for chattel financing.

When a manufactured home is titled as chattel, you’re also going to pay vehicle taxes to the Department of Motor Vehicles instead of property taxes.

Many consumers may encounter a chattel loan at the sales office of a manufactured home builder. They’re convenient with quick closing times, but come with a higher interest rate and a shorter term than most traditional mortgages.

This makes the financing cost of the manufactured home high, even if the payment is low thanks to the lower cost of a manufactured home compared with a site-built home. Around 42% of loans for manufactured homes are chattel loans, according to the Consumer Finance Protection Bureau.

When you own a manufactured home and rent the land it occupies, such as in a mobile home park, you will need a chattel mortgage, except when an FHA Title I loan is used.

Tiny Houses

A chattel mortgage may be used for tiny house financing when the tiny house is not affixed to a permanent foundation and/or when the land is leased.

Tiny houses are usually too small to meet building codes for a residential home, so even if the home is on a foundation and on owned land, a traditional mortgage is almost always out of the question. Even if Fannie Mae or FHA allows the property, the lender won’t.

Tiny houses on foundations are usually classified as accessory dwelling units.

Vehicles

A chattel loan may finance assets that are not permanently affixed to the property, such as vehicles. Dump trucks and construction vehicles may qualify.

Equipment

A chattel loan can be used to purchase large equipment for a business, such as a forklift or a tractor. Even livestock can be purchased with a chattel loan.

How Much Does a Chattel Mortgage Cost?

Chattel mortgages are more expensive than many other different mortgage types. The Urban Institute concluded that interest rates on chattel loans were several percentage points higher than on non-chattel loans. Owners of manufactured homes would spend thousands more per year in interest compared with a traditional mortgage.

These types of mortgages are not being purchased by Fannie Mae or Freddie Mac on the secondary mortgage market. When a conventional mortgage is purchased by one of these entities, the loan originator obtains more liquidity and can provide more loans to more people. This drives the cost of the mortgage down.

A chattel mortgage, on the other hand, must stay on the books of the lender, making the loan riskier and more expensive.

If you qualify, you might want to consider refinancing your chattel mortgage into a traditional mortgage.

Chattel Mortgage vs Traditional Mortgage

To qualify for a conventional or government-backed mortgage instead of a chattel mortgage, you must own the land your home sits on, the home must be permanently affixed to a foundation, and it must have at least 400 square feet of living space (600 for Fannie Mae’s conventional loan for manufactured homes).

Mobile homes built before June 15, 1976, will not qualify for a mortgage loan. A personal loan is about the only option.

You must also meet all other requirements set forth by the lender to qualify for a traditional mortgage. A mortgage calculator tool can help with this.

For some types of assets, a chattel mortgage may be a good option to consider. Take a look at the major differences.

Chattel Loan	Traditional Mortgage
For movable property only	Includes the land and all attached structures
May have a lower interest rate than an unsecured personal loan	Usually has a lower interest rate than a chattel mortgage
Shorter terms (e.g., 5 years)	Longer terms (e.g., 15 years, 30 years)
Lower origination fees	Higher loan fees
Shorter close time	Longer close time
Lender holds the title, which is only given to the buyer when it is paid off	Lender holds a lien on the property, not title

Pros and Cons of a Chattel Mortgage

A chattel mortgage is more expensive than a traditional mortgage, so anyone who can qualify for a traditional mortgage may wish to pursue that option first. It’s not all bad news for chattel mortgages, though, especially for other types of property where a chattel loan is desirable.

Pros	Cons
Lender only has a security interest in the movable property, not the land	If you default on the loan, the lender can take your asset. Also, the lender owns the asset until the loan is paid off
Taxes may be lower on property titled as “chattel” rather than “real” property	Higher-cost loan than a traditional mortgage
Possible faster close and lower loan fees than a standard mortgage	Fewer consumer protections. Chattel loans are not covered by the Real Estate Settlement Procedures Act or CARES Act
Lower interest rate than a personal loan	Higher interest rate than a traditional mortgage
Pays down more quickly than a traditional mortgage	Shorter term may create higher payments
Interest paid is tax deductible	Interest paid is also tax deductible with a traditional mortgage

Consumer Protection and Chattel Mortgages

Chattel mortgages on manufactured homes are a special concern to the Consumer Financial Protection Bureau because that type of housing:

•   Serves an important role in low-income housing

•   Is typically taken on by financially vulnerable people

•   Has fewer consumer protections

Manufactured home sellers often have an on-site lender where borrowers can walk away with a chattel loan the same day as the home purchase. In certain scenarios, though, better financing options might be available.

The Takeaway

Buying a manufactured home, a plane, or a dump truck? A chattel loan could be the answer. If, though, you are buying a manufactured home and own the land, a traditional mortgage makes more sense than a chattel mortgage.

Find answers to home financing questions at SoFi’s help center for mortgages.

3 Home Loan Tips

1. Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, allow fixed rate mortgages with as little as 3% down for qualifying first-time homebuyers.
2. Thinking of using a mortgage broker? That person will try to help you save money by finding the best loan offers you are eligible for. But if you deal directly with a mortgage lender, you won’t have to pay a mortgage broker’s commission, which is usually based on the mortgage amount.
3. 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.

FAQ

Where can I get a chattel loan?

Lenders specializing in chattel or manufactured housing loans will offer this type of loan.

How much does a chattel mortgage cost?

The interest rate of a chattel mortgage could be up to 5 percentage points higher than that of a standard mortgage loan.

What happens at the end of a chattel mortgage?

When a chattel mortgage is paid off, the borrower receives legal title to the property or asset borrowed against. It’s also possible for landowners with permanently affixed manufactured homes to refinance into a traditional mortgage to end their chattel loans.

Is a chattel mortgage tax deductible?

A chattel mortgage qualifies for the same tax deductions that a traditional mortgage does. This includes a deduction on mortgage interest paid throughout the tax year.

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Photo credit: iStock/MicroStockHub

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

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.

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

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Guide. Supporter. Educator. A mortgage loan originator wears many hats while finding a residential loan that will work for a borrower and steering the prospective homeowner or refinancer through the whole process.

The person or entity is the original point of contact for borrowers. Their role is regulated to prevent the kind of mortgage fraud that occurred during the housing crisis and financial meltdown of 2008.

Here’s what you should know about what they do, how they’re regulated, and how they can help you get the right loan to the closing table.

What Is a Mortgage Loan Originator?

A mortgage loan originator (MLO) evaluates and recommends approval of residential loan applications on behalf of customers. Some work directly for a mortgage lender; mortgage brokers offer options from several lenders.

MLOs might be paid a salary plus commission, but commission only is far more common. They must be licensed in the states where they do business or under the umbrella of the bank, bank subsidiary, or credit union that employs them.

MLOs work to find a mortgage for each borrower’s unique situation. They must be excellent communicators since they guide people through the mortgage process.

They educate the borrower about different kinds of mortgages, the application process, and how mortgages work, and ensure legal compliance and completeness to close the loan.

Since MLOs often work on commission, it’s usually in their best interests to find a compatible loan for the borrower that will make it to the closing table. They don’t get paid if the loan falls through. To get your business, it’s also in their best interests to offer the most competitive terms possible.

What Is the Difference Between a Mortgage Loan Originator and a Mortgage Loan Officer?

The upshot: Regulators and some others refer to mortgage loan officers employed by financial institutions as “mortgage loan originators.”

A mortgage loan originator is anyone who negotiates or takes a residential mortgage application for a client with the expectation that they will be paid for their services.

What Does a Mortgage Loan Originator Do?

MLOs are responsible for taking a loan from application to closing. They may also negotiate terms of a residential mortgage on behalf of a client.

Responsibilities of a mortgage loan originator may include:

•   Processing the customer’s application

•   Explaining the different types of mortgages available to a borrower

•   Asking for documents on the applicant’s background and financial information

•   Keeping track of documents

•   Submitting documents to underwriting

•   Relaying messages from underwriting

•   Scheduling a home appraisal

•   Addressing any home appraisal issues with the client

•   Asking for more documents as closing gets nearer

•   Scheduling the close

•   Answering questions the borrower may have

•   Ensuring compliance with applicable laws

•   Developing relationships with real estate agents, builders, and individual clients

How to become a Mortgage Loan Originator

Becoming a mortgage loan originator typically requires a bachelor’s degree and on-the-job training. Nonbank originators also need to be licensed.

Licensing

MLOs who are employed by banks, bank subsidiaries, or credit unions do not have to obtain a loan originator license. All others must be licensed in the states they do business in and register with the Nationwide Multistate Licensing System & Registry (NMLS).

General state license requirements include:

•   At least 20 hours of pre-licensing education

•   Authorization to provide a credit report and criminal record

•   General character standards and demonstrated financial responsibility

•   Passing the NMLS written test

•   Sponsorship by a company already registered with the NMLS

Licensing became required in 2008 following the housing collapse. It increases consumer protection and reduces mortgage fraud.

Average Salary

The median pay for mortgage loan officers in 2021 was $63,380 per year, according to the Bureau of Labor Statistics.

But because mortgage loan originators typically work solely on commission, earnings can vary widely based on the area, the number of closed loans, and the amount of the closed loans. The commission averages 1% of the loan amount.

Do I Need a Mortgage Loan Originator?

A mortgage loan originator is needed when you need a new mortgage. Few mortgages are assumable by a buyer.

You will most likely need a new mortgage for your purchase or refinance and will need a mortgage loan originator.

How Do You Find a Good Mortgage Loan Originator?

A good mortgage loan originator may be able to secure a loan that works for your situation and aptly guide you through the process. Want to know how to find a good loan originator? Here are a few tips.

Shop Around for a Mortgage

One of your most powerful tools for finding a good mortgage loan originator is to shop around for a mortgage. Meet the people who will work with you on your mortgage and get loan estimates for the specific type of mortgage you’re looking for.

•   Ask for quotes from your bank or credit union. Your existing relationship with a bank may be valuable to them and they may offer good terms.

•   Get recommendations from family or friends. From people who have been there and done that, you may find an originator that has great rates and is incredible to work with.

•   Conduct an internet search. You’ll find plenty of mortgage loan originators listed on the internet with a bounty of reviews. Try calling a few and you may find a competent loan officer with competitive rates.

Compare a Direct Lender With a Mortgage Broker

When you’re looking for a good mortgage loan originator, you’ll come across two main ways to find a mortgage for your home: mortgage brokers and direct lenders.

•   Direct lenders are the providers of the mortgage. When you go to a lender and apply for a loan, you’re working directly with the lender, which makes a decision without a middleman.

•   Mortgage brokers work for borrowers to find the best loans and terms for their individual situations. They may be able to point clients to a lender they would not have known about otherwise and save them money in the process. Lender commissions to brokers may span 0.50% to 2.75% of the loan amount, but lenders typically add the costs to the borrower’s loan. It’s a good idea to check credentials with the NMLS.

Both can help get you a mortgage that may work for your situation, but you may find that you prefer one over the other when you’re looking for a good loan mortgage originator.

If you apply for a mortgage with several, it’s smart to compare the loan terms being offered in the loan estimate that you will receive.

Have an Idea of What Type of Mortgage You’re Looking For

Some lenders may specialize in a certain type of mortgage, so if you know what you’re looking for, you may be able to find a good loan originator more easily.

If you’re looking for a renovation loan, for example, you might want to seek out a lender specializing in that type of loan.

Be Wary of Deals and Offers You See in Ads

Some lenders might advertise low payments or low interest rates, but those may not be what you’d end up getting. By law, lenders are required to disclose the loan terms to you on a standard form called a loan estimate after you’ve applied for a mortgage.

Using this form can help you compare loans fairly as it will list the mortgage APR, term, points, and all fees you’ll need to pay to engage the services of a particular lender.

Know What Questions to Ask

If you interview mortgage originators, certain questions can help you determine if you’ll be a match or not. Don’t know what to ask? Take a look at these mortgage questions.

The Takeaway

Finding a good mortgage originator is worth the time it takes to explore your options and interview potential candidates. After all, finding the right mortgage, as an initial borrower or a refinancer, can mean significant savings — not just at origination but over the life of the loan.

Looking for the right mortgage partner? Give SoFi a look. SoFi offers refinancing as well as home mortgage loans with competitive rates, flexible terms, and low down payment options.

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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.

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.

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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As winter approaches, it may make sense to prepare for the cold weather by sealing cracks and holes around doors and windows no matter where you live. Proactive steps like these may help cut down on your heating bills.

If you’re bracing for a big chill, or worse, a blizzard — predicted to become more intense in the coming years, despite shorter winters — you’ll be glad you protected or checked the pipes, roof, chimney, heating system, and water heater. Your wallet and physical well-being may benefit from the following ways to winterize a house and how to finance the projects.

Ways to Winterize a House

There are numerous ways to winterize a house beyond sealing cracks in doors and windows. And while the steps to winterize a home may differ in Alaska than in Texas, it still helps to get ahead of any issues that may arise.

You should also know that the timing of the first frost can vary from state to state. It may help to check the National Weather Service’s data that forecasts the first frost for each state to assist in your winterization preparation timeline.

The following tips to winterize a house may help you reduce future repair costs and heating bills. And figuring out ways to lower your heating bills is something to pay attention to due to the potential rise of the price of natural gas, which is often used to heat homes.

Protect Pipes or Pay the Piper

When deciding how to winterize a house, you may first consider how to address plumbing leaks and other issues.

Burst pipes can cause $5,000 or more in damage, according to Consumer Reports , citing information from the Insurance Institute for Business and Home Safety , which has a page of recommendations to help prevent frozen pipes.

Pipes in unheated places inside a home, including basements, attics, and garages, are among the most likely to sustain damage. But pipes running through exterior walls can also freeze in certain conditions, and so can those running through kitchen or bathroom cabinets.

Protecting the plumbing is clearly a situation where being proactive may save a homeowner money.

Pipe insulation can be as inexpensive as 50 cents per linear foot. Compare that to the $5,000 figure above, and the rewards of winterization can quickly become clear.

Adding insulation to attics, crawl spaces, and basements can help to keep those areas warmer, which can also help to keep pipes from freezing.

If sinks are located on exterior walls, it can help to keep the cabinet doors open during frigid temperatures (after removing any dangerous chemicals, including cleaners, if there are children or pets in the home).

Allowing cold water to drip can also help prevent pipes from freezing, making sense in frigid temperatures.

Address HVAC Maintenance and Repair

Nobody wants the heating system to perform poorly during the winter — much less have it break down.

It’s a good idea to schedule a professional maintenance appointment, including a filter change before freezing temperatures arrive. (Then it’s best to change the filter at least every 90 days.)

Additionally, maintenance and repairs to the heating, ventilation, and air conditioning (HVAC) system and cleaning out vents can improve airflow in your home.

It may be time to consider a new HVAC system for some people. The U.S. Department of Energy’s Energy Star program provides tips to homeowners to decide if replacing an HVAC system makes sense.

Signs that it might be time to replace the unit include:

•   The heat pump is more than 10 years old.

•   The furnace or boiler is more than 15 years old.

•   The system needs frequent repairs, and energy bills are increasing.

•   Rooms in the home can be too hot or too cold.

•   The HVAC system is noisy.

If people in a home are away during reasonably regular times of the day, it can make sense to ask the HVAC professional about a programmable thermostat to save on energy costs.

The Environmental Protection Agency’s Home Energy Yardstick can help a homeowner determine if replacing an HVAC system makes sense.

Check the Roof, Gutters, and Chimney

Before winter hits, clearing the roof and gutters of leaves and other debris will help prevent snow and ice from building up and damaging the gutters — or, worse, the roof.

If ice or snow gets beneath roof shingles, it can lead to leaks and interior water damage. You may want to ask yourself if you need to replace your gutters. Do any shingles need to be glued down or replaced? Do any small leaks need to be repaired before they become big ones?

Plus, a chimney inspection can make sense before winter arrives. A chimney could have an animal nest lodged within, and there can also be structural problems. If the home has a wood-burning fireplace, creosote buildup can create a fire hazard. With a gas fireplace, a blocked chimney could lead to carbon monoxide backup, which can be life-threatening.

Addressing all these issues before winter comes can help you prevent future damage, reduce future repair costs and energy bills, and avoid a potential accident.

Examine the Water Heater

You want to check your water heater before temperatures plunge to avoid a chilly shower during winter.

Are areas of the water heater rusting or corroding? If so, this can lead to a leak. A professional can examine it, bleed the system to remove trapped air and mineral deposits, clean the pipes, and recommend and do repairs.

Think About Outdoor Equipment and Plants

Preventive winterization isn’t just about your home. You want to winterize your outdoor equipment, like a lawn mower or other power tools, to protect them as well.

Draining the oil from the appropriate equipment and taking it to a local recycling or hazardous-waste site can be your first step.

You also want to take care of general maintenance on equipment, including replacing old parts. That way, when spring rolls around and you need to mow your lawn or trim your bushes, you should be ready to go.

Additionally, inspect gas caps to ensure O-rings are intact; if not, get replacements from the manufacturer. Also, replace filters and lubricate what needs lubricating.

You may need to bring in the plants you initially placed outside to enjoy the summer sun when temperatures drop. Before doing so, check the plants for mealybugs, aphids, and other insects. Remove them, so they don’t spread to other plants.

Some people prefer to prune plants before transitioning them back into the house. If so, prune no more than one-third of each, pruning an equal amount off the roots. When repotting, pick a container that’s two or more inches bigger than the current one.

Gradually transition your plants to the new environment, which has different light and humidity levels. For a few days, bring the plants inside at dusk and put them back outside in the morning.

Over a period of 14 days or so, increase the indoor time until the process is complete and they’ve become indoor plants again, finishing the transition before temperatures go down to 45 degrees.

What’s the Cost of Winterizing a Home?

Pipe insulation, as noted earlier, can be relatively cheap, perhaps 50 centers per linear foot.

If a homeowner decides to insulate further, perhaps an attic, costs can range between $1.50 and $7.00 per foot, or a total of $1,700 to $2,100.

On average, an attic insulation installer may charge $70 an hour. If electrical work needs to be done for safe insulation around cables or junction boxes, you may expect to pay $80 an hour.

To hire someone to clean gutters and downspouts, you may pay an average of $119 to $227. An HVAC inspection might cost $325 and up, while the cost to replace an HVAC system could run between $5,000 and $10,000, depending upon the size of the home, among other factors.

What each of these services costs will depend on the locale, what types of repairs or unusual circumstances exist, and so forth.

Additionally, there are websites that allow a homeowner to enter a ZIP code and get an estimate of what a winterizing activity may cost. It makes sense to get quotes from local professionals to get an exact price.

Financing Winterization Projects

Some people pay for their home winterization costs out of pocket, while others may decide to get a home improvement loan. If you’re leaning toward a loan, comparing a home equity line of credit (HELOC) and a personal loan can make sense.

Recommended: How Do Home Improvement Loans Work?

A HELOC uses your home as collateral; for this to be an option, there needs to be enough equity in the property to borrow against it. If there is, and the loan amount required is large, it could make sense to apply for a HELOC.

Interest rates may be lower than those for a personal loan. Also, you can typically take draws from a HELOC up to the loan’s limit.

So if winterizing is coupled with indoor projects done through the cold season, for example, this might be a practical solution. In some cases, interest payments could be tax-deductible.

Recommended: The Different Types Of Home Equity Loans

A personal loan can make sense for recent homebuyers who haven’t built enough equity or for people planning smaller projects. Home winterization often fits into this category.

Applying for and receiving money from an unsecured personal loan is typically much faster than with a HELOC, partly because no appraisal is required for the loan.

Having an excellent credit score and cash flow can help a borrower get approved or receive better loan terms.

The Takeaway

Preparing your home for the harsh weather of winter can be one step you take to protect your house and potentially reduce your energy bills. However, many homeowners don’t take steps to winterize a house due to the upfront costs. Fortunately, there are ways to finance any home improvement projects.

If taking out a home improvement loan for home winterization projects makes sense, then here’s more about the fixed-rate unsecured personal loans offered by SoFi:

•   Personal loans have no origination fees and no prepayment penalties.

•   Qualifying borrowers may be eligible for loans up to $100,000.

•   Applying online can be quick and easy.

•   Customer service is available to help seven days a week throughout the process.

Winterize and protect your home with SoFi home improvement loans.

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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.

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

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

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