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A $150,000 mortgage will cost a total of $341,318 over the lifetime of the loan, assuming an interest rate of 6.5% and a 30-year term. It might be tempting to think that a $150,000 mortgage will cost…well, $150,000. But lenders need to earn a living for their services and mortgage loans come with interest.

What’s the True Cost of a $150,000 Mortgage?

The specific price you will pay to borrow $150,000 depends on your interest rate — which, in turn, is based on a wide range of factors including your credit score, income stability, and much more. Here’s what you need to know to get an estimate of how much a $150,000 home mortgage loan might cost in your specific circumstances.

Where Do You Get a $150,000 Mortgage?

Good news: There are many banks and institutions that offer $150,000 mortgages. For 2026, the maximum amount for most conventional loans is $832,750, so the loan you’re considering is well within reach. To see how your salary, debts, and down payment savings affect how much home you can afford, use a home affordability calculator.

However, it’s important to understand that even a $150,000 mortgage may cost far more than the sticker price after interest and associated fees. For instance, let’s say you purchase a $200,000 home with a 25% down payment and a $150,000 mortgage. If your interest rate is 7% and your loan term is 30 years, the total amount you’d pay over that time is $359,263.35 — which means you’d actually pay more than the home price ($209,263.35) in interest alone. (And that’s before closing costs, home insurance, property taxes, or mortgage insurance.)

At prices like that, it may seem like taking out a mortgage at all is a bad deal. Fortunately, property has a tendency to increase in value (or appreciate) over time, which helps offset the overall cost of interest. (Of course, nothing is guaranteed.)

Keep in mind that you can potentially lower the interest rate you qualify for by lowering your debt-to-income (DTI) ratio, improving your credit score, or increasing your cash flow by getting a better-paying job. Even a small decrease in interest can have a big effect over the lifetime of a loan. In our example above, with all else being equal, you’d pay only $139,883.68 in interest if your rate were 5% instead of 7% — a savings of nearly $70,000!

Recommended: The Best Affordable Places to Live in the U.S.

Monthly Payments for a $150,000 Mortgage

When you take out a $150,000 mortgage, you’ll repay it over time in monthly installments — of a fixed amount, if you have a fixed mortgage, or amounts that can change if you take out a variable rate loan.

Your monthly $150K mortgage payment includes both principal (the amount you borrowed) and interest (the amount you’re being charged), and may also wrap in your property taxes, homeowners insurance, and mortgage insurance if applicable. (You’ll only need to pay mortgage insurance if your down payment is less than 20%.)

But there is another caveat here that some first-time homebuyers don’t know about. Even if your mortgage payments are fixed each month, the proportion of how much principal you’re paying to how much interest you’re paying does change over time — a process known as the amortization of the loan. It’s a big word, but its bottom line is simple: Earlier on in the loan’s life, you’re likely paying more interest than principal, which increases the amount of money the bank earns overall. Later on in the loan, you’ll usually pay more principal than interest.

What to Consider Before Applying for a $150,000 Mortgage

Amortization is important to understand because it can affect your future financial decisions. For example, if you’re not planning on staying in your house for many years, you may find you have less equity in your home than you originally imagined by the time you’re ready to sell — because the bulk of your mortgage payments thus far have been going toward interest. It might also affect when it makes sense to refinance your mortgage.

Most lenders make it easy to make larger payments or additional payments against the principal you owe so that you can chip away at your debt total faster, but be sure to double-check that your lender doesn’t have early repayment penalties.

Of course, there are different types of home loans. Here are some sample amortization schedules for two $150,000 home loans. (You can also build your own based on your specific details with a mortgage calculator or an amortization calculator online.)

Amortization Schedule, 30-year, 7% Fixed

Notice that, for more than the first half of the loan’s lifetime, you’ll pay substantially more interest than principal each year — even though your mortgage payments remain fixed in amount.

Amortization Schedule, 15-year, 7% Fixed

While a shorter loan term may help you build equity in your home more quickly, it comes at the cost of a higher monthly payment.

How to Get a $150,000 Mortgage

To apply for a $150,000 mortgage, you can search for providers online or go into a local brick-and-mortar bank or credit union you trust. You’ll need to provide a variety of information to qualify for the loan, including your employment history, income level, credit score, debt level, and more.

The higher your credit score, lower your debt, and more robust your cash flow, the more likely you are to qualify for a $150,000 mortgage — and, ideally, one at the lowest possible interest rate. That said, mortgage interest rates are also subject to market influences and fluctuations, and sometimes rates are simply higher than others overall.

💡 Quick Tip: To see a house in person, particularly in a tight or expensive market, you may need to show the real estate agent proof that you’re preapproved for a mortgage. SoFi’s online application makes the process simple.

The Takeaway

A $150,000 mortgage can actually cost far more than $150,000. Depending on your interest rate and your loan term, you may spend more than you borrowed in principal in the first place on interest, and you’ll likely pay a higher proportional amount of interest per monthly payment for about the first half of your loan’s lifetime.

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

FAQ

How much is a $150K mortgage a month?

A 30-year, $150,000 mortgage at a 6.25% fixed interest rate will be about $924 per month (not including property taxes or mortgage interest), while a 15-year mortgage at the same rate would cost about $1,286 monthly. The exact monthly payment you owe on a $150,000 mortgage will vary depending on factors like your interest rate and what other fees, like mortgage insurance, are rolled into the bill.

How much income is required for a $150,000 mortgage?

Those who earn about $55,000 or more per year may be more likely to qualify for a $150,000 mortgage than those who earn less. Although your income is an important marker for lenders, it’s far from the only one — and even people who earn a lot of money may not qualify for a mortgage if they have a high debt total or a poor credit score. (Still, the best way to learn whether or not you qualify is to ask your lender.)

How much is a downpayment on a $150,000 mortgage?

To avoid paying mortgage insurance, you’d want to put down 20% of the home’s purchase price, which if you are borrowing $150,000 would be $37,600 for a home priced at $188,000. Some lenders allow you to put down as little as 3.5% of the home’s price. So if you had a $150,000 mortgage and put down 3.5%, your down payment and home price would be smaller. (Keep in mind these figures do not include closing costs.)

Can I afford a $150K house with a $70K salary?

Yes, as long as you don’t have a lot of other debt, you can probably afford a $150,000 home if you’re making $70,000 a year. There’s a basic rule of thumb to spend less than a third of your gross income on your housing. With an income of $70,000 per year, you’re making about $5,833.33 per month before taxes — and a third of that figure is $1,925. A $150,000 mortgage might have a monthly payment of as little as $998 per month, even with a 7% interest rate, so it should be affordable for you as long as you don’t have other substantial debts.

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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.

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SOHL-Q425-180

The concept of a credit card can be dated back to the early and mid-1900s. There were actually a number of early iterations of what is used today as a credit card. Over the decades, these financial tools have evolved, and variations have multiplied.

Read on to learn about the major milestones in the history of credit cards and how this payment method came to be so popular, as well as what the future holds.

Invention of Credit Cards

There were several precursors to the modern version of the credit card. Credit card history can be traced back to 1914, when Western Union rolled out the idea of “Metal Money.” These metal plates were granted to a handful of customers and allowed them to push back payment until a later date.

The next version of credit cards was introduced in 1946, when New York City banker John Biggins introduced the Charg-it card. These charge cards were usable within a two-block radius of Biggins’ bank. Purchases made by customers were forwarded to his bank account, and merchants were reimbursed at a later date.

Recommended: Charge Cards Advantages and Disadvantages

When Were Credit Cards First Used?

Here’s an overview of which types of credit cards were used when, from the first store card to the first international card.

First “Use Now, Pay Later” Cards

The Diners Club Card was the first card that gained widespread use. The idea for the card arose when businessman Frank McNamara misplaced his wallet and couldn’t pay for dinner at a New York City restaurant. The good news is that his wife was there to cover the tab.

In 1950, McNamara returned to the same restaurant with his business partner, Ralph Schneider, where he used a cardboard card to pay the bill. That card was the Diners Club Card, and the dinner became known as the “First Supper.”

First Bank Cards

In 1958, American Express developed its first credit card that was made of cardboard. The next year, the plastic credit card was developed and released.

Also in 1958, Bank of America mailed its credit card to certain segments of the market in California, where it was based. The bank offered a pre-approved limit of $300 to 60,000 customers in Fresno.

Then, in 1966, Bank of America’s BankAmericard became the U.S.’s first general-use credit card, meaning more places would accept credit card payments with it.

First Interbank Cards

In 1966, a cluster of California banks joined together to form the Interbank Card Association (ITC). The ITC soon launched the nation’s second major bank card. Initially called the Interbank card and later the Master Charge, this card was renamed Mastercard in 1979.

First International Cards

The credit card soon went international, with Diners Club laying claim to being the first international credit card. It’s said to have become the first globally accepted charge card in 1953 when businesses in Cuba, Mexico, and Canada began accepting payments from customers with Diners Club cards.

And in 1970, Bank of America rolled its BankAmericard on a global scale, prompting the formation of the International Bankcard Company (IBANCO).

💡 Recommended: Recommended: SoFi Business Credit Card

Regulation and Litigation

Over the decades, credit cards have undergone several rounds of regulation. Here’s a look at some of the major regulatory milestones in the history of credit cards:

1970:

•   The Fair Credit Reporting Act was passed to regulate the collection, access, and use of data concerning consumer credit reports.

•   Also this year, the Unsolicited Credit Card Act was introduced. It prohibited credit card issuers from sending credit cards to customers who didn’t request them.

1974:

•   The Fair Credit Billing Act of 1974 was created to protect consumers from unfair credit billing practices. For instance, it stated that consumers have the right to dispute unauthorized charges, charges made due to errors, and charges when goods weren’t delivered and services not rendered.

•   The Equal Credit Opportunity Act (ECOA) was passed as well. This prevented lenders from discriminating against credit card applicants based on gender, race, age, religion, marital status, national origin, and whether you receive benefits from a public assistance program. It also specified that a lender can’t charge higher fees or a higher than average credit card interest rate for any of those reasons.

1977:

•   The Fair Debt Collection Practices Act was introduced to prevent debt collectors from using deceptive, unfair, or abusive practices when collecting debt that is in default and handled by debt collectors. It limited calls from such agencies to between the hours of 8am to 9pm and prohibited contact at an unusual time or place. In addition, it specified that if you’re represented by a debt attorney, the debt collector must stop calling you and reach out to your attorney instead.

2009:

•   The CARD Act boosted consumer protection by “establishing fair and transparent practices related to the extension of credit.” It prohibits credit card issuers from offering credit without first gauging the consumer’s ability to pay. Additionally, it introduced special rules when it comes to extending credit to consumers under the age of 21. The CARD act also limits the amount of upfront fees an issuers can charge during the first year after an account is opened, as well as the instances that issuers can charge penalty fees.

Technological Evolution of Credit Cards

Here are some of the main technological milestones and changes of credit cards throughout their history:

1969: Magnetic Stripe

Credit card networks and banks started rolling out cards with the magnetic stripe, which became widely adopted. While it’s on the verge of being phased out, consumers still use magnetic stripe for payment today.

2004: Contactless Credit Cards

Contactless credit was used for the first time in 2004. They started to become more popular in 2008, when major credit card networks (including Visa, Mastercard, and American Express) started offering their own versions of contactless cards.

2010: Chip Cards

Pin-and-chip technology made its way to America in 2010. This credit card chip technology offers greater security than magnetic cards, which can be copied. These days, the majority of credit cards in America have EMV (which stands for Europay, Mastercard, and Visa) chips.

2011: Mobile Wallets

In 2011, Google introduced the first mobile wallets, and Apple followed in its footsteps in 2012. In 2014, Apple Pay was released, followed by Android and Samsung Pay in 2015. As mobile wallets are stored on your smartphone, they can grant greater security than physical cards, which can more easily be lost or stolen. Plus, smartphones have security features, such as fingerprint recognition and passcodes, which can provide higher levels of security.

How Do Credit Cards Work?

Credit cards are a tangible card that you can use to make purchases. If you’re wondering how credit cards work, they’re a type of revolving loan, which means that you can tap into your line of credit at any given time. You can borrow funds up to your credit limit, which is set when you apply. Your line of credit gets depleted when you make transactions, and it gets replenished when you pay back what you owe.

Here are some more details on how credit cards work:

•  Credit cards have an interest rate, expressed as annual percentage rate (APR). This represents how much interest you pay during an entire year and includes any fees and other charges along with the interest rate. You’ll only pay interest if you have a remaining balance after your payment due date. When you pay the full balance that you owe on your card, your balance is zero, and you will not owe interest.

•  If you pay more than you owe, or if a merchant issues you a refund for an amount larger than your total balance, then you have a negative balance on your credit card.

•  Credit cards may also come with perks, such as rewards points and cash back. Cardholders may also enjoy additional benefits like travel insurance and discounts at select merchants.

•  Credit cards also have built-in security features, such as pin-and-chip technology, fraud monitoring, and a three-digit CVV number on a credit card.

In terms of how to apply for a credit card, you’ll first want to know your credit score, as this will indicate which cards you may be eligible for. You may consider applying for preapproval to determine your odds of getting approved. When you’ve compared your credit card options and decided which one is right for you, then you can apply in an app, online, over the phone, or through the mail.

Credit Cards and Credit Scores

Credit cards can have a major impact on your credit score. For one, your account activity is reported to the three major credit bureaus: Equifax®, Experian®, and TransUnion®.

Making on-time credit card minimum payments can help build your credit, as payment history makes up 35% of your FICO® consumer credit score. On the flipside, making late payments can drag down your score.

You’ll also want to keep an eye on how much of a balance you rack up relative to your total amount of credit available (aka your credit limit). Your credit utilization ratio, which measures how much of your available credit has been used, accounts for 30% of your score. It’s generally recommended to keep your credit utilization below 30% (10% is even better) to avoid adverse effects to your credit score.

Other factors related to how your credit card can impact your score include:

•  The length of your credit history, which makes up 15% of your score

•  Your mix of different credit types, which accounts for 10% of your credit score (having more types is better)

•  Having a longer credit history, meaning accounts open for longer, can help build your score

•  Not applying for too much new credit is also a way to build your credit score. Too many hard credit inquiries related to new lines of credit can make it seem as if you are more of a risk.

Types of Credit Cards

Today, there are a number of different types of credit cards to choose from. Take a look at the different types of credit cards available.

Rewards Cards

Rewards cards feature a way to earn rewards through travel miles, cash back, or points. You usually collect rewards when you make purchases. For example, you may earn one point for every dollar spent and/or a multiple of that for certain types of purchases or ones made at specific retailers.

You usually can redeem the rewards you earn in different ways, such as on travel accommodations, airline tickets, gift cards, merchandise, or as credit toward your balance statement.

Low-Interest Cards

As the name suggests, low-interest cards feature a low APR. Having a card with a low APR can certainly benefit you if you carry a credit card balance or plan to use your card to make a large purchase, as you may be able to save money on interest.

When looking for low-interest credit cards, you usually need to have a strong credit score to qualify.

Credit-Building Cards

If you have a short credit history or less-than-stellar credit score, a credit-building card can help positively impact your credit. As payments made on a secured credit card are reported to the three major credit bureaus, using your card can help build your credit as long as you stay on top of your payments.

While these cards are more accessible than many other credit cards out there, they also tend to have higher interest rates and fees. They may also offer a lower credit card limit.

Secured Credit Cards

If you have a low credit score, you might also look into a secured credit card, in which you put down cash, which becomes your credit card limit. Use these cards responsibly, and you may be able to graduate to a standard credit card.

Recommended: When Are Credit Card Payments Due?

The Future of Credit Cards

As demonstrated in the past few decades, credit card technology is constantly evolving to meet the needs and demands of consumers. The next time you reach your credit card expiration date, you could see an updated product in the mail.

It’s expected that contactless payments, which increased in popularity during the pandemic, will continue to proliferate. In the future, it may even become possible to make payments via voice command tools. Wearable payments, such as paying for goods and services with payment technology that’s embedded in a wristband, ring, or keychain, is another avenue being explored.

Additionally, the security protocols used in credit cards will continue to evolve. It’s anticipated that magnetic stripe cards will soon fall by the wayside and be replaced by biometric cards, which use fingerprints and chip technology to enhance security.

The Takeaway

As you can see from learning the history of credit cards, a lot has changed since the payment method was first introduced. Credit cards remain as popular a payment method as ever, and it’s expected they’ll continue to evolve as technology and consumer needs shift. One thing that probably won’t change is the importance of understanding how credit cards work, what your card agreement’s fine print says, and how to use these cards responsibly.

Looking for a new credit card? Consider credit card options that can make your money work for you. See if you're prequalified for a SoFi Credit Card.

FAQ

Who invented credit cards?

There were several early iterations of credit cards, so it’s difficult to pin down exactly who invented credit cards. The credit may go to businessman Frank McNamara and his business partner Ralph Schneider, who invented the Diners Club Card.

How were credit cards first used?

While the concept of paying by credit can be traced back to ancient civilizations, the first modern day example of paying with a credit card was the Diners Club card, which could be used at restaurants. However, this card had one major difference between modern credit cards: You had to pay off the balance in full each month.

What was the first type of credit card?

The first type of credit card was most likely the Diners Club card, introduced in 1950. It was the first credit card that could be used at multiple establishments.

Photo credit: iStock/DoubleAnti

SoFi Credit Cards are issued by SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOCC-Q425-008

If someone asked you to describe your “dream home,” what picture would pop into your mind? A single-family home with a big backyard, or a high-rise condo with a view? Maybe you’ve always longed to live on a houseboat.

Only you can decide which of the many house types out there is best for you or your family. This guide to the different types of homes available to buyers could help narrow your search.

Common Types of Houses

As you think about where you’d like to live or what you need to buy a house, you can probably rule out a few of these home types right away. From there, it may be helpful to look at the pros and cons of different home types side by side to narrow your search.

1. Apartments

The definition of an apartment can get a bit complicated because it changes depending on where you live. When someone talks about how to buy an apartment in New York City, for example, they might be referring to a condo or co-op.

Generally, though, an apartment is one of several residential units in a building owned by one person or company, and the owner rents each unit to individual tenants.

There are some pluses to that arrangement, especially if you take advantage of amenities like a gym or swimming pool. Monthly costs for utilities and insurance may be low, too. Because it’s a rental, though, you can’t build any equity. Also, if you want to stay or go, or make some changes to the apartment, you’re typically tied to the terms of your lease.

Pros and Cons of Renting an Apartment

2. Condos

If you like some of the upsides of apartment living but you want a chance to build equity with each payment, you may enjoy owning a condo. Condo living isn’t for everyone — a house vs. condo quiz could help you decide between those types of homes — but a condo is a good choice for some.

You’ll share walls with other residents but will own your unit. That means you’ll be in charge of the repairs and upkeep on the interior, but you won’t have to worry about lawn maintenance, cleaning and fixing the pool, or exterior repairs. (You’ll likely pay a monthly or quarterly fee to cover those costs, though.)

When you purchase a condo, you’ll have a chance to build equity over time as you make your home loan payments, but if the homeowners association (HOA) is poorly managed, your condo may not increase in value the way a home you care for yourself might.

Pros and Cons of Buying a Condo

3. Co-ops

When it comes to condos vs. co-ops, it’s important to understand the differences if you’re shopping for a home or plan to.

The main difference is the ownership arrangement: When you buy into a co-op, you aren’t purchasing your unit; you’re buying shares of the company that owns the property. The market value of your unit determines the number of shares you own. Your shares determine the weight of your vote in what happens in common areas, and you’ll also split maintenance costs and other fees with your fellow residents based on how many shares you own.

Because co-op residents don’t actually own the units they live in, it can be challenging to find financing. Instead of a mortgage, you may have to get a different type of loan, called a co-op loan or share loan. And because of co-op restrictions, it may be difficult to rent out your unit.

Still, buying into a co-op may be less expensive than a condo, and you may have more control over how the property is managed.

Pros and Cons of Buying into a Co-Op

4. Single-Family Homes

When someone says “house,” a single-family home is the type of structure most people probably think of — with a backyard, a garage, maybe a patio or front porch. Even if the yard is small, the house sits by itself. That can mean more privacy and more control over your environment.

Of course, that autonomy can come with extra costs, including higher homeowners insurance, taxes, maintenance and repairs, and maybe HOA fees.

The down payment and monthly payments also can be challenging, but buyers usually can expect the value of their home to increase over time.

And if you need money down the road — for a child’s education or some other planned or unexpected expense — you may be able to tap into home equity. Or you might plan to pay off the mortgage in 20 or 30 years and live rent-free in retirement.

Recommended: What Is a Single-Family Detached Home?

Pros and Cons of Buying a Single-Family Home

5. Tiny Homes

Tiny homes, which usually have 400 square feet of living space or less, have a huge fan base. Some tiny houses are built to be easily moved, giving the owner physical freedom. Some are completely solar-powered and built to be eco-friendly. Many can be constructed from kits.

One downside is finding a place to legally park the tiny home. In most parts of the country, they are classified as recreational vehicles, not meant to be lived in full time, and usually only allowed in RV parks or campgrounds.

Another challenge is tiny house financing. Options include a personal loan, builder financing, a chattel mortgage (a loan for a movable piece of personal property), and an RV loan if the tiny house meets the Recreational Vehicle Industry Association’s definition of an RV: “a vehicular-type unit primarily designed as temporary living quarters for recreational, camping, or seasonal use.”

A not-tiny consideration is making use of such a small space. Many people may not last long in a tiny home.

Pros and Cons of Buying a Tiny Home

6. Townhomes

A townhome or townhouse can look and feel like a detached house, in that it has its own entrance and may have its own driveway, basement, patio or deck, and even a small backyard. But these row houses, which are often found in cities like New York City, San Francisco, and Washington, D.C., and usually have multiple stories, share at least one common wall with a neighboring home.

Those shared walls can make buying a townhouse more affordable than a comparable detached home. And owners who belong to an HOA with neighboring homes generally don’t have to worry about exterior upkeep, although owners of townhouses classified as fee simple are responsible for exterior maintenance of their structure and sometimes the surrounding yard.

The HOA also may offer some amenities, but that monthly or quarterly HOA fee will add to overall costs, and may rise over time.

Pros and Cons of Buying a Townhome

7. Modular Homes

A modular home is made up of sections that are built in a factory, transported to a homesite, and assembled on a foundation there. This makes them different from traditional stick-built homes, which are constructed completely on-site. Both types of houses are held to the same local, state, and regional building codes.

Because the assembly-line part of the process is cost-effective, a modular home may be less expensive. Also, because weather isn’t a factor for part of the work, you can probably expect fewer delays.

Most modular homes are sold separately from the land. So if you already own a piece of property or like the idea of building outside a traditional neighborhood, a modular home might be a good choice.

Many people who choose a modular home use a construction loan for the build or a construction to permanent loan. A personal loan or use of home equity from an existing home are other options.

Pros and Cons of Buying a Modular Home

8. Manufactured Homes

Manufactured homes, formerly known as mobile homes, are built completely off-site and then transported to the homesite and placed on a temporary or permanent foundation.

Manufactured homes are not held to the same local, state, and regional standards as stick-built or modular homes. Instead, they must conform to construction and installation standards set by the U.S. Department of Housing and Urban Development, and local land use and zoning regulations restrict where they can be placed.

Of course, there are plenty of communities that are designed just for manufactured homes, although the land in many of these “parks” is rented, not owned.

A growing number of lenders are providing conventional and government-insured mobile home financing. The loans, backed by the Federal Housing Administration (FHA) or U.S Department of Veterans Affairs (VA), are offered by approved lenders.

The most common method of financing is an installment contract through the retailer. Depending on your situation, a personal loan or chattel loan could provide a shorter-term path to financing a manufactured home.

Pros and Cons of Buying a Manufactured Home

9. Cabins

Most people tend to think of a cabin as a cozy second home that’s made of logs or covered in cedar shakes, but there’s no reason a cabin can’t be your primary residence.

Just as with any other type of property, the price of a cabin can vary based on size, age, location, and amenities. If there’s an HOA, those fees can add to the cost.

If you’re considering a cabin because you’re buying a vacation home — aka a second home — know that loans for second homes have the same rates as primary homes. A 20% down payment is typical.

Pros and Cons of Buying a Cabin

10. Multifamily Homes

Investors know the difference between single-family vs. multifamily homes.

For owners, the big advantage of a multifamily home is that it offers flexibility. Homeowners can buy a home with multiple units and rent out the spaces for extra income. Or an adult child or parent might decide to move into that secondary space.

These properties can be a good investment.

Do accessory dwelling units make a property a multifamily? It depends. Fannie Mae says a property may be classified as a two-unit property or single family with ADU based on the characteristics of the property.

Pros and Cons of Buying a Multifamily Home

11. Houseboat or Floating Home

Living in a home that’s actually on the water — not just near it — can be a dream come true … or a challenge.

Some floating homes are as big as a small house — and are built to be lived in in the same way — only on a floating foundation. Houseboats or liveaboards are typically much smaller than floating homes and more mobile, and they may not have the amenities a larger home can offer.

There are also substantial differences in what it can cost to buy and maintain these water residences. A floating home may cost much more upfront than a houseboat, but the insurance, taxes, and day-to-day costs of keeping a houseboat operating can run higher. And there may be more loan options available, including traditional mortgages, for those buying a floating home.

Pros and Cons of Living on a Houseboat

12. Duplexes and Triplexes

Duplexes and triplexes make for a good home and also a solid investment opportunity. These multi-unit properties allow you to live in one unit while renting out the others, providing a steady stream of passive income. This arrangement can significantly offset your mortgage and other living expenses, making homeownership more affordable and financially viable.

Additionally, living on the property can help you keep a closer eye on maintenance and tenant relations, ensuring that everything runs smoothly and that your investment remains in good condition.

Recommended: What Is a Duplex? Should You Consider Owning One?

Pros and Cons of Buying a Duplex or Triplex

Luxury Homes

Luxury homes are a class apart, offering an unparalleled level of comfort, style, and sophistication. These properties are designed to provide a premium living experience, often featuring spacious and elegantly appointed rooms, high-end finishes, and state-of-the-art amenities.

Beyond the physical attributes, luxury homes are often located in prime areas, offering access to the best schools, shopping, dining, and entertainment options. These properties are typically situated in prestigious neighborhoods or gated communities, providing a sense of security and privacy.

But you get what you pay for, and luxury homes can run into the millions. You may need a jumbo loan to finance the property, and those come with stricter qualification criteria, including high credit scores and significant cash reserves.

Pros and Cons of Buying a Luxury Home

Comparing House Types

Whether you’re thinking about buying a single-family home, condo, tiny home, houseboat, or townhome, it’s important to keep your priorities in mind. Here are a few things to consider:

Finding Your Fit

Popular Types of Home Architectural Styles

Home architectural styles vary widely, each offering unique aesthetic and functional features that cater to different tastes and lifestyles. Below are 11 options to consider.

1. Cape Cod

Typically featuring a steeply pitched roof with a small overhang and a central chimney, Cape Cod homes are often one or one-and-a-half stories tall with dormer windows to increase attic space. The exterior is usually clad in shingles or clapboard, and the interior is characterized by cozy, efficient layouts with hardwood floors and wood-paneled walls.

2. Colonial

A colonial home is a symmetrical, two-story design with a centered front door, evenly spaced multi-pane windows, and a simple, traditional look. It often features brick or wood siding, a gabled roof, and a classic, balanced layout with living areas downstairs and bedrooms upstairs.

3. Contemporary

A contemporary home features clean lines, open floor plans, and large windows that bring in natural light. It often uses modern materials like glass, steel, and smooth wood finishes. The design focuses on simplicity, minimal ornamentation, and a seamless connection between indoor and outdoor spaces.

4. Craftsman

A craftsman home is known for its warm, handcrafted feel, featuring a low-pitched roof, wide front porch with thick square or tapered columns. It also may have exposed beams or rafters. These homes often use natural materials like wood and stone, with built-in cabinetry and detailed woodwork inside for a cozy, inviting look.

5. Greek Revival

Greek Revival homes are often large and grand. They feature tall columns or pilasters, symmetrical facades, and a bold, prominent entryway. These homes often have white or light-colored exteriors, pedimented gables, and large windows. The overall look is grand, formal, and elegant, emphasizing strong architectural lines and historic character.

6. Farmhouse

A farmhouse-style home is warm, simple, and functional, often featuring a large front porch, gabled roof, and spacious, open interior layout. Natural materials like wood and stone are common, along with neutral colors and cozy finishes. The style balances rustic charm with comfortable, family-friendly design.

7. Midcentury Modern

A midcentury modern home is known for its clean lines, minimalist design, and integration with nature. These homes often feature flat or low-pitched roofs, large windows, and open floor plans that emphasize natural light and indoor-outdoor flow. Materials include wood, glass, and steel.

8. Ranch

Ranch homes — the most popular home style — are single-story homes with long, low, horizontal layouts. They usually feature an open floor plan, large windows, and easy access to the outdoors, often through sliding doors leading to a patio or yard. The style emphasizes simplicity, accessibility, and casual living.

9. Split-Level

A split-level home has staggered floor levels, typically with a main living area on one floor and short sets of stairs leading to upper and lower levels. This layout provides separation between spaces, such as bedrooms upstairs and a family room or basement downstairs. The style maximizes square footage on smaller lots while maintaining an open feel.

10. Tudor

A Tudor home is known for its steeply pitched roofs, tall narrow windows, and decorative half-timbering on the exterior. The design often includes brick or stone details, giving it an old-world, storybook charm. Inside, you’ll often find cozy rooms, wood accents, and traditional craftsmanship.

11. Victorian

A Victorian home was built in the Victorian era, and often features intricate trim, patterned shingles, and vibrant exterior colors. These houses usually have steep roofs, bay windows, and wraparound porches. Inside, Victorian homes tend to include detailed woodwork, high ceilings, and a mix of formal, elegantly styled rooms.

The Takeaway

Understanding the different types of homes before you begin your search for a place to live can help you find your dream home more quickly, and free you up to take on other homebuying tasks. Besides choosing the type of home you want, you’ll also have to decide how to finance this important purchase if you’re not paying cash. A good way to start is to shop and compare rates.

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

FAQ

What type of house is cheapest?

Condos, co-ops, townhomes, and manufactured homes all tend to be less expensive than single-family homes. Among new single-family homes, modular homes tend to be the least expensive because they are made in a factory and assembled on-site.

What is the difference between a modular and manufactured home?

A modular home is built in sections at a factory and transported to the site for assembly, often adhering to local building codes. A manufactured home, or mobile home, is entirely constructed in a factory and placed on a permanent chassis, following federal standards.

Which home type is best for first-time buyers?

The best type of home for first-time buyers depends on their lifestyle, preferences, budget, and goals. Condos and townhomes generally have lower prices and less maintenance, but single-family homes offer more space and privacy.

Can you get a mortgage for any type of home?

Yes, you can get a mortgage for various types of homes, including condos, townhomes, and single-family homes. Each has specific requirements and may involve different loan programs, but most lenders offer mortgages for these home types, making it accessible for buyers to finance their purchase.

What style of home is most popular?

Ranch-style homes are currently very popular due to their single-story design, which offers easy accessibility and open floor plans. Modern and contemporary styles are also gaining traction, especially among younger buyers, for their sleek designs and energy efficiency.

Photo credit: iStock/CatLane

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

SOHL-Q425-195

Heard of a no-closing-cost mortgage or refinance? Sounds divine, but mortgage closing costs are almost as certain as death and taxes. They must be accounted for, one way or the other.

You may be spared the pain of paying closing costs upfront, depending on the type of loan and the lender’s criteria, but they won’t just magically disappear. Instead, you’ll either be given a higher interest rate on the mortgage to cover those costs or see the costs added to your principal balance.

If you’re thinking about what’s needed to buy a house, keep closing costs in mind and understand the pros and cons of rolling these costs into your loan.

What Are Closing Costs?

A flock of fees known as closing costs on a new home are part and parcel of a sale. They typically range from 2% to 5% of the home’s purchase price. Closing costs include origination fees, recording fees, title insurance, the appraisal fee, property taxes, homeowners insurance, and possibly mortgage points. Some of the costs are unavoidable; lender fees are negotiable.

Closing costs come into play when acquiring a mortgage and when refinancing an existing home loan.

You may cover closing costs with a cash payment at closing, with your down payment, or by tacking them on to your monthly loan payments. You may also be able to negotiate with the sellers to have them cover some or all of the closing costs.

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

Can Closing Costs Be Rolled Into a Loan?

If you’re buying a home and taking out a new mortgage, your lender may allow you to roll your closing costs into the loan, depending on:

•   the type of home loan

•   the loan-to-value ratio

•   your debt-to-income (DTI) ratio

Rolling closing costs into your new mortgage can raise the DTI and loan-to-value ratios above a lender’s acceptable level. If this is the case, you may not be able to roll your closing costs into your loan. It’s also possible that if you roll in your closing costs, your loan-to-value ratio will become high enough that you will be forced to pay for private mortgage insurance. In that case, it may be worth it to pay your closing costs upfront if you can.

If you hear of someone who’s taken out a mortgage and says they rolled their closing costs into their loan, they may have actually acquired a lender credit — the lender agreed to pay the closing costs in exchange for a higher interest rate in a “no-closing-cost mortgage.” A no-closing-cost refinance works similarly.

Not all closing costs can be financed. For example, you can’t roll in the cost of homeowners insurance or prepaid property tax. Some of the costs that may be included are the origination fees, title fees and title insurance, appraisal fees, discount points, and the credit report fee.

What about government-backed mortgages? Most closing costs for FHA loans (backed by the Federal Housing Administration) can be financed. And VA loans usually require a one-time U.S. Department of Veterans Affairs “funding fee,” which can be rolled into the mortgage.

USDA loans (from the U.S. Department of Agriculture) will allow borrowers to roll closing costs into their loan if the home they are buying appraises for more than the sales price. Buyers can then use the extra loan amount to pay the closing costs.

Finally, for FHA and USDA loans, the seller may contribute up to 6% of the home value as a seller concession for closing costs.

How to Roll Closing Costs Into an Existing Home Loan

When you’re refinancing an existing mortgage and you roll in closing costs, you add the cost to the balance of your new mortgage. This is also known as financing your closing costs. Instead of paying for them up front, you’ll be paying a small portion of the costs each month, plus interest.

Pros of Rolling Closing Costs Into Home Loans

If you don’t have the cash on hand to pay your closing costs, rolling them into your mortgage could be advantageous, especially if you’re a first-time homebuyer or short-term homeowner.

Even if you do have the cash, rolling closing costs into your loan allows you to keep that cash on hand to use for other purposes that may be more important to you at the time.

Cons of Rolling Closing Costs Into Home Loans

Rolling closing costs into a home loan can be expensive. By tacking on money to your loan principal, you’ll be increasing how much you spend each month on interest payments.

You’ll also increase your DTI ratio, which may make it more difficult for you to secure other loans if you need them.

By adding closing costs to your loan, you are also increasing your loan to value ratio, which means less equity and, often, private mortgage insurance.

Here are pros and cons of rolling closing costs into your loan at a glance:

Is It Smart to Roll Closing Costs Into Home Loans?

Whether or not rolling closing costs into a home loan is the right choice for you will depend largely on your personal circumstances. If you don’t have the money to cover closing costs now, rolling them in may be a worthwhile option.

However, if you have the cash on hand, it may be better to pay the closing costs upfront. In most cases, paying closing costs upfront will result in paying less for the loan overall.

No matter which option you choose, you may want to do what you can to reduce closing costs, such as negotiating fees with lenders and trying to negotiate a concession with the sellers in which they pay some or all of your costs. That said, a seller concession will be difficult to obtain if your local housing market is competitive.


💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.

The Takeaway

Closing costs are an inevitable part of taking out a home loan or refinancing one. Rolling closing costs into the loan may be an option, but it pays to carefully consider the long-term costs of avoiding paying closing costs up front before you commit to your mortgage.

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

FAQ

What is a no-closing-cost mortgage?

The term “no-closing-cost mortgage” is a bit misleading. Closing costs are in play, but the lender agrees to cover them in exchange for a higher interest rate or adds them to the loan balance.

How much are home closing costs?

Closing costs are usually 2% to 5% of the purchase price of a home.

Can you waive closing costs on a home?

Some closing costs must be paid, no matter what. But you can try to negotiate origination and application fees with your lender. You may even be able to get your lender to waive certain fees entirely.

Photo credit: iStock/kate_sept2004

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-criteria for more information.

SOHL-Q425-170

Asset managers use a “glide path” to determine how the asset allocation of a target-date retirement fund will change based on the number of years until the fund’s target date. Each target-date fund has its own glide path, though they typically begin with a more aggressive allocation that gets more conservative over time.

The idea behind most target date fund glide paths is that investors with a longer-term time horizon have a higher percentage of their portfolio in riskier assets, like stocks, since they have time to recover from short-term volatility. As their retirement date approaches (or once they’ve started retirement), investors likely will benefit from a more conservative portfolio that protects the assets they’ve already accumulated.

What Is a Glide Path?

The glide path is the formula that asset managers choose when they put together a target-date mutual fund that determines how and when that portfolio will adjust its asset allocation over time.

Target-date funds (and their glide paths) are common investment choices in 401(k) accounts, as well as in other types or retirement accounts, such as a Roth or traditional IRA set up through a brokerage account.

A key component to saving for retirement is having a suitable mix of investments. Early on, most glide paths focus on stocks that typically offer the greatest potential to grow in value over time and then shift to bonds and other fixed-income investments according to the investor’s risk tolerance to manage volatile price swings as they get closer to retirement.

Understanding Glide Path

The glide paths within target-date funds aim to create a set-it-and-forget-it investing option for retirement savers, who may get a mix of assets based on their time horizon within a single fund. Investors who are younger and have 20 to 30 years until retirement may have a higher allocation toward riskier assets like stocks.

By comparison, someone who is nearing retirement or has already retired, may need to consider scaling back on their portfolio risk. Glide path investing automatically reallocates the latter investor’s portfolio toward bonds which are typically lower risk investments with lower returns compared to stocks, but are more likely to provide increased portfolio stability. That also generally means that younger investors in a target-date fund will typically have higher 401(k) returns than older investors.

Types of Glide Paths for Retirement Investing

There are different glide path strategies depending on an investor’s risk tolerance and when they plan to retire. Typically, target-date funds have a declining glide path, although the rate at which it declines (and the investments within its allocation) vary depending on the fund.

Declining Glide Path

A declining glide path reduces the amount of risk that a target-date fund takes over time. In general, it makes sense for retirees or those approaching retirement to reduce their investment risk with a more conservative portfolio as they age. A decreasing glide path is the more common approach used. It involves a higher equity risk allocation that steadily declines as retirement approaches.

Static Glide Path

Some target-date funds may have a static glide path during some years. During this time, the investment mix would remain at a set allocation, such as 60% stocks and 40% bonds. Managers maintaining portfolios that have a static glide path rebalance them regularly to maintain this allocation.

Rising Glide Path

In this approach — which goes against most financial professionals’ recommendations — a portfolio initially has a greater allocation of bonds compared to stocks, and then gradually increases its shares of equities. For example a portfolio might start out with 70% bonds and 30% stocks, and reverse those holdings over a decade to 70% equities and 30% bonds. The rising glide path approach generally takes the position that increasing risk in a retiree’s portfolio could reduce volatility in the early stages of retirement when the portfolio is at risk of losing the most wealth in the event of a stock market decline.

While an increasing glide path may be an option to consider for some retirees with pension benefits or those who are working in retirement — that is, as long as they understand the risk involved and feel comfortable taking it on — generally speaking, the rising glide path is the least utilized method for retirement planning, and it is not commonly recommended by financial advisors.

💡 Quick Tip: Before opening any investment account, consider what level of risk you are comfortable with. If you’re not sure, start with more conservative investments, and then adjust your portfolio as you learn more.

Choosing the Right Glide Path

If you’re saving for retirement in a 401(k), there may only be one target-date option available to you based on your target-retirement age. However, if you have choices within your 401(k) or you’re choosing a target-date fund within an individual retirement account or another investment vehicle, you can look for a target-date fund with a strategy that aligns with your investment view.

One rule of thumb uses the “rule of 100,” which subtracts the investor’s age from 100 to determine the percentage of your portfolio that should be in stocks. However, some managers use glide paths that decline more or less quickly than that.

Some target-date funds also incorporate alternative assets, such as private equity or real estate, in addition to traditional stocks and bonds.

“To” or “Through” Retirement

When glide paths reach retirement date, they can take one of two approaches, either a “To” or “Through” approach. A “To” retirement glide path is a target-date fund strategy that reaches its most conservative asset allocation when retirement starts. This strategy generally holds lower exposure to risk assets during the working phase and at the target retirement date. This means, at retirement, it reduces exposure to riskier assets, like equities, and moves into more conservative assets, like bonds.

“Through” glide paths tend to maintain a somewhat higher allocation toward riskier assets at their target retirement date, which continues to decrease in the earlier retirement years. This means exposure to equities in retirement tends to be higher, at least in the first few years of retirement.

In choosing which path is best suited to you, you must determine your risk tolerance and how aggressive or conservative you are able to be. This includes deciding how much exposure to equities you can afford to have. Decreasing exposure to stocks means investors may not have to worry as much about a portfolio that fluctuates in value, whereas an increased exposure to equities may mean a portfolio with more volatility that could have potential for greater gains, and potentially higher losses, over time.

The Takeaway

Glide paths are formulas that investment managers create to determine the level of risk in a target-date fund. The idea behind a glide path is that a portfolio automatically adjusts itself based on risk tolerance that changes as the investor ages, allowing for a more hands-off approach.

Glide paths are common investment choices in retirement accounts such as 401(k)s and IRAs. As you’re determining your retirement savings strategy, carefully consider whether they may make sense for you.

Prepare for your retirement with an individual retirement account (IRA). It’s easy to get started when you open a traditional or Roth IRA with SoFi. Whether you prefer a hands-on self-directed IRA through SoFi Securities or an automated robo IRA with SoFi Wealth, you can build a portfolio to help support your long-term goals while gaining access to tax-advantaged savings strategies.

FAQ

What does glide path approach mean?

A glide path refers to a formula that asset managers use to determine the allocation mix of assets in a target-date retirement portfolio and how it changes over time. A target-date retirement portfolio tends to become more conservative as the investor ages, but there are multiple glide paths to take into account a retiree’s risk tolerance.

What is a retirement glide path?

A retirement glide path is the approach within a target-date fund that includes a mix of stocks and bonds. Retirement glide paths typically start out with a more aggressive mix of investments and get more conservative over time.

Which type of mutual fund follows a glide path?

Target-date retirement funds are the most common type of mutual fund that follows a glide path. However managers may also use glide paths for other time-focused, long-term investments.

What is an example of a glide path?

Here is one example of a glide path: Say an investor plans to retire in 2050 and buys a target-date 2050 fund. If the investor is using a declining glide path strategy, it will automatically reduce the amount of risk that the target-date fund takes over time. So, for instance, the target-date fund might have 70% stocks and 30% bonds at the beginning, but over time, the amount allocated to stocks will steadily decline, and the amount allocated to bonds will steadily increase — making the portfolio more conservative as the investor approaches retirement.

What are the benefits of a glide path?

Potential benefits of a glide path may include making investing easier because the process of changing asset allocation is automatic, and allowing for an essentially hands-off approach since glide paths are professionally managed. However, there are drawbacks to consider, as well, including possibly higher management fees for some target-date funds.

Photo credit: iStock/akinbostanci