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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.

^²To obtain a home equity loan, SoFi Bank (NMLS #696891) may assist you obtaining a loan from Spring EQ (NMLS #1464945).

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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As demand for home improvement work has kept up at a steady pace, so has the rate of home improvement fraud. Bringing a stranger into your home can be a leap of faith, especially if you haven’t done all your homework. Knowing the signs of home improvement fraud may keep you from becoming the next victim of a home repair scam.

What Is a Home Improvement Scam?

A home improvement scam occurs when a company or contractor — or a con artist posing as one — tries to swindle a homeowner out of money in exchange for a renovation or remodel that goes unfinished or is botched.

Many times home improvement scammers go door to door in search of their next victims. With the average cost of a home remodel in the upper tens of thousands of dollars, there is a lot of money at stake. A rule of thumb: If an offer sounds too good to be true, it probably is.


💡 Quick Tip: You never know when you might need funds for an unexpected repair or other big bill. So apply for a HELOC (a home equity line of credit) brokered by SoFi today: You’ll help ensure the money will be there when you need it, and at lower interest rates than with most credit cards.

Examples of Home Improvement Scams

There are many kinds of home improvement scams out there. Seniors have been the most targeted group, but people of all ages need to stay alert to these common frauds.

The ‘Free’ Inspection

“There’s no such thing as a free lunch” holds true when it comes to someone showing up on your doorstep and offering a free inspection. What’s their end game?

The Better Business Bureau reports that scammers and con artists will talk their way into a home to, say, inspect a roof, then cause damage like tearing off shingles to create a situation that actually then does require repairs.

Advertising by Flyer

Handymen often blanket communities with flyers in the hopes that a small percentage of people will call. It’s a good idea to treat such random distributions in your neighborhood as a sign to double-check credentials and legitimacy.

You may also find this a common occurrence after a storm if you live in a location prone to hurricanes or tornadoes. It would be smart to do your research before signing over your insurance check to someone who drops off a flyer.

Door-to-Door Contractors

If a contractor knocks on your door claiming to have leftover supplies from another project and offers you services for a steal, that’s a red flag. While the door-to-door salesman might be a real contractor, anyone going door to door to solicit business is likely not a professional who is in demand.

The Handshake Deal

No contract? No job. Homeowners should always have an ironclad contract in place before any money is exchanged. And if a contractor asks for cash, that’s a potential sign of a scammer (or at least someone looking to avoid the IRS).

Likewise, the contractor should not ask for more money than was decided on in the initial contract and scope of work. Claiming unexpected problems is a sign of a potential scam or an inexperienced contractor.

If there are potential variables in the project, you might want to spell out in the contract that extra work will require a change order, that is, both parties will agree to the additional work and an added fee.

If you’ve arranged for a home improvement loan or other financing, predictability comes in handy.

No-Credential Contractors

Many states don’t require a credential from a contractor if the amount of their annual work is below a certain dollar figure. While it’s unusual for a home improvement company or individual to not have credentials, it’s not unprecedented.

In general, it’s wise to treat non-credentialed contractors with a healthy awareness that they potentially aren’t serious businesspeople.


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

How to Avoid a Home Improvement Scam

While home repair scams are good to know about — especially if you’ve bought a fixer-upper — it’s also important to realize that not every contractor falls into that category, of course. If you take these tips into account, you’ll help yourself avoid a home improvement scam down the road.

Consider Only Contractors Who Are Licensed and Insured

It’s always smart to work with only licensed professionals who are insured, but in this case especially, a contractor who has their own license and insurance is likely not to be a scammer.

One way to get a background check on a contractor candidate is by calling the Better Business Bureau and requesting their rating, as well as asking if there are any complaints against them.

Get Recommendations From People You Trust

One way to avoid getting scammed is by working with contractors who come highly recommended by your friends, family, colleagues, or acquaintances. It’s always a gamble hiring a worker you find via online sources, so the more personal ties you have to contractors — like connections to those who have actually hired them in the past — the less likely it is that you’ll fall victim to a scam.

Get Multiple Estimates

For any construction or remodel project, you’ll want to solicit bids. Usually a minimum of three bids will give you an idea of the price range for your home improvement ideas.

By getting estimates from various professional contractors, you’re less likely to get scammed by someone trying to take advantage of you because, say, you live in a high-dollar neighborhood or drive a nice car. You can also use a home improvement cost calculator to help you estimate what the cost of your project should be.

Read the Contract Carefully

One of the easiest ways to be taken advantage of in any project is by not reading the contract in detail. If the contract is only one page long and doesn’t spell out the basics like budget, deposit, timing, or how to handle change orders, you’re setting yourself up for potential issues as money starts changing hands and construction begins.

And if there are areas of concern in the contract the contractor gives you, you might consider hiring a lawyer to review it and make any necessary revisions for you.

The Takeaway

Stay alert to home repair scams by getting referrals, asking contractors for references, reading all contracts meticulously, and only hiring professionals who provide you with proof that they are licensed and insured.

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

What to do if you get scammed by a contractor?

If you do find yourself the victim of a home repair scam, there are many organizations you could call for help. You might want to start with your local branch of the FBI, then submit a scam tip to the National Consumers League fraud website. Additionally, you can lodge a complaint with the Better Business Bureau and consult Call for Action, a nonprofit that advocates for consumers by investigating fraudulent contractors.

What should you not say to a contractor?

Agreeing to a large deposit without a commitment to start work is a common mistake. It’s also important to let the contractor know that you’ll be expecting certain benchmarks to be met as the project continues.

Can I withhold payment from a contractor?

If a contractor does not uphold their side of the contract, you can often legally withhold payment until the full scope of work is completed as outlined in the signed agreement.

How much of a deposit should you give a contractor?

A deposit of 10% to 25% is common for a construction project. Certain states may have home improvement laws that, for example, prohibit a contractor from taking more than one-third of the job payment as a deposit upfront.

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Photo credit: iStock/SeventyFour

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.

^²To obtain a home equity loan, SoFi Bank (NMLS #696891) may assist you obtaining a loan from Spring EQ (NMLS #1464945).

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.

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 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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What is the monthly payment on a $1 million mortgage at recent interest rates? If we remove property taxes, property insurance, and mortgage insurance from the equation, you can expect to spend between $6,653 and $8,988 a month on principal and interest alone depending on which loan term you choose. But that’s not the whole story. There’s more you’ll need to know about a $1 million mortgage payment.

Cost of a $1 Million Mortgage

The cost of a $1 million mortgage varies depending on which home mortgage loan you choose and a few other factors, such as interest rate and property taxes. As you may know, different types of mortgage loans have different expenses, such as mortgage insurance, which can change your monthly payment.

Monthly Payments for a $1 Million Mortgage

The monthly payment on a $1 million mortgage is influenced by a variety of factors, which include:

•   Interest rate

•   Fixed vs variable interest rate

•   Mortgage insurance

•   Property insurance

•   Loan term

•   Type of loan

•   Property taxes

Removing all variables except a 7% interest rate, a $1 million mortgage payment would be between $6,653 and $8,988 per month. If you’re a first time home buyer considering a $1 million mortgage, make sure you understand the true cost of buying and owning a home. Remember that your property taxes and some insurance costs may be dictated by your home’s location. (You may want to analyze the cost of living by state. Some of the best affordable places to live in the U.S. may surprise you.)

If these variables are new to you, a home loan help center may smooth out any confusion you may have.

Where to Get a $1 Million Mortgage

You can get a $1 million mortgage with mortgage lenders such as banks, credit unions, and online lenders. However, they’ll need to offer jumbo home loans since $1 million exceeds the conventional loan limit of $766,550 in most areas. When comparing lenders, look at both interest rates and fees. Loan origination fees, in particular, can vary greatly between lenders.


💡 Quick Tip: A major home purchase may mean a jumbo loan, but it doesn’t have to mean a jumbo down payment. Apply for a jumbo mortgage with SoFi, and you could put as little as 10% down.

What to Consider Before Applying for a $1 Million Mortgage

The monthly payment for a $1 million mortgage isn’t the only thing you should consider. Also keep in mind the total amount you’ll spend on interest for each loan term. For a 30-year loan with a 7% interest rate, you’ll spend $1,395,086 on interest. If you opt for a 15-year loan, you’ll spend just $617,890. This means if you can afford a 15-year loan, you’ll save $777,196.

While you’re home shopping, use a mortgage calculator to see the amount of money you’ll spend monthly and over the life of the loan. You may also want to use a home affordability calculator to incorporate your monthly debts and spending habits into the equation. While you may be able to technically afford a large monthly payment, would the expense leave room for dining out, vacations, and retirement contributions?

During the early years of your mortgage loan, more of your monthly payment typically goes toward paying off the interest on the loan, with a smaller proportion paying down the principal you owe. An amortization schedule shows how the proportions shift and you build equity more quickly in the second half of the loan term. Here are sample schedules for 30-year and 15-year loan terms:

Amortization Schedule, 30-year, 7%

Year	Beginning Balance	Monthly Payment	Total Interest Paid	Total Principal Paid	Remaining Balance
1	$1,000,000	$6,653.02	$69,678.20	$10,158.10	$989,841.90
2	$989,841.90	$6,653.02	$68,943.87	$10,892.43	$978,949.47
3	$978,949.47	$6,653.02	$68,156.46	$11,679.84	$967,269.63
4	$967,269.63	$6,653.02	$67,312.12	$12,524.18	$954,745.45
5	$954,745.45	$6,653.02	$66,406.75	$13,429.55	$941,315.90
6	$941,315.90	$6,653.02	$65,435.92	$14,400.38	$926,915.52
7	$926,915.52	$6,653.02	$64,394.92	$15,441.38	$911,474.14
8	$911,474.14	$6,653.02	$63,278.66	$16,557.64	$894,916.50
9	$894,916.50	$6,653.02	$62,081.71	$17,754.59	$877,161.91
10	$877,161.91	$6,653.02	$60,798.23	$19,038.07	$858,123.83
11	$858,123.83	$6,653.02	$59,421.96	$20,414.34	$837,709.50
12	$837,709.50	$6,653.02	$57,946.21	$21,890.09	$815,819.40
13	$815,819.40	$6,653.02	$56,363.77	$23,472.53	$792,346.88
14	$792,346.88	$6,653.02	$54,666.94	$25,169.36	$767,177.52
15	$767,177.52	$6,653.02	$52,847.44	$26,988.85	$740,188.66
16	$740,188.66	$6,653.02	$50,896.42	$28,939.88	$711,248.78
17	$711,248.78	$6,653.02	$48,804.35	$31,031.95	$680,216.83
18	$680,216.83	$6,653.02	$46,561.05	$33,275.25	$646,941.58
19	$646,941.58	$6,653.02	$44,155.58	$35,680.72	$611,260.86
20	$611,260.86	$6,653.02	$41,576.22	$38,260.08	$573,000.78
21	$573,000.78	$6,653.02	$38,810.39	$41,025.91	$531,974.88
22	$531,974.88	$6,653.02	$35,844.63	$43,991.67	$487,983.20
23	$487,983.20	$6,653.02	$32,664.47	$47,171.83	$440,811.37
24	$440,811.37	$6,653.02	$29,254.41	$50,581.89	$390,229.48
25	$390,229.48	$6,653.02	$25,597.84	$54,238.46	$335,991.02
26	$335,991.02	$6,653.02	$21,676.94	$58,159.36	$277,831.66
27	$277,831.66	$6,653.02	$17,472.59	$62,363.71	$215,467.96
28	$215,467.96	$6,653.02	$12,964.32	$66,871.98	$148,595.97
29	$148,595.97	$6,653.02	$8,130.14	$71,706.16	$76,889.81
30	$76,889.81	$6,653.02	$2,946.49	$76,889.81	$0

Amortization Schedule, 15-year, 7%

Year	Beginning Balance	Monthly Payment	Total Interest Paid	Total Principal Paid	Remaining Balance
1	$1,000,000	$8,988.28	$68,761.41	$39,097.98	$960,902.02
2	$960,902.02	$8,988.28	$65,935.02	$41,924.38	$918,977.65
3	$918,977.65	$8,988.28	$62,904.30	$44,955.09	$874,022.55
4	$874,022.55	$8,988.28	$59,654.49	$48,204.90	$825,817.65
5	$825,817.65	$8,988.28	$56,169.76	$51,689.64	$774,128.02
6	$774,128.02	$8,988.28	$52,433.11	$55,426.28	$718,701.74
7	$718,701.74	$8,988.28	$48,426.34	$59,433.05	$659,268.68
8	$659,268.68	$8,988.28	$44,129.92	$63,729.47	$595,539.21
9	$595,539.21	$8,988.28	$39,522.91	$68,336.48	$527,202.73
10	$527,202.73	$8,988.28	$34,582.86	$73,276.53	$453,926.19
11	$453,926.19	$8,988.28	$29,285.69	$78,573.70	$375,352.50
12	$375,352.50	$8,988.28	$23,605.59	$84,253.80	$291,098.70
13	$291,098.70	$8,988.28	$17,514.88	$90,344.51	$200,754.19
14	$200,754.19	$8,988.28	$10,938.87	$96,875.52	$103,878.66
15	$103,878.66	$8,988.28	$3,980.73	$103,878.66	$0

How to Get a $1 Million Mortgage

Anyone who has ever bought a home will tell you there are tips to qualify for a mortgage. The biggest ones include saving up for a large down payment, paying down your debts, and working on your credit score before applying for a mortgage. Paying off balances lowers your debt to income (DTI) ratio and helps you qualify for better mortgage terms. The maximum DTI is usually around 43%, but it can vary with each lender and borrower.


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

The Takeaway

If you need to borrow $1 million to buy a home, a 15-year mortgage will require around a $9,000 a month mortgage payment, whereas a 30-year mortgage requires around $6,650. Assuming a 7% interest rate, homebuyers can expect to spend between $617,890 and $1,395,086 on interest alone.

Keep in mind that property taxes, home insurance, and mortgage insurance will increase your monthly payment. If you’re in the market to buy a $1 million house, principal and interest will comprise a majority of your monthly costs.

When you’re ready to take the next step, consider what SoFi Home Loans have to offer. Jumbo loans are offered with competitive interest rates, no private mortgage insurance, and down payments as low as 10%.

SoFi Mortgage Loans: We make the home loan process smart and simple.

FAQ

How much is $1,000,000 mortgage a month?

You can expect to spend around $6,653 a month with a 30-year mortgage term and $8,988 a month with a 15-year term. This assumes you have a 7% interest rate (and doesn’t take into account property taxes, mortgage insurance, and property insurance).

How much income is required for a $1,000,000 mortgage?

Housing costs should be at or below 30% of your income. If you were to choose a 30-year mortgage, this suggests that your income should be around $265,000 a year. Choose a 15-year mortgage, and your income should be around $360,000.

How much is a down payment on a $1,000,000 mortgage?

Because a $1,000,000 mortgage typically means a jumbo loan, you may need to make a down payment of at least 10%. That means your minimum down payment would be $111,112 on a home priced around $1,112,000.

Can I afford a $1,000,000 house with $70K salary?

No, a $70,000 salary would not be enough to cover the cost of a mortgage on a $1,000,000 house. Assuming you make around $5,800 a month (before taxes), this would not be enough to cover the minimum payment required of either loan term.

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Photo credit: iStock/Paul Bradbury

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

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

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

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

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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.

SoFi Mortgages: simple, smart, and so affordable.

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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Photo credit: iStock/AntonioGuillem

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

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

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

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

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

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

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