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Do you receive a year-end bonus? Lucky you! While you may be tempted to go on a shopping spree or take your gang out to a great dinner, hold on a second. Yes, you can use some of that money for fun, but you might also want to put some of a year-end bonus toward your financial goals.

Smart bonus money moves may include paying down debt, helping to fund a short-term savings goal (such as a down payment on a house or establishing an emergency fund), as well as investing the money to potentially achieve long-term growth.

There’s no one right formula for spending (or not spending) a bonus, but here are some ideas for using your bonus — or any other infusion of cash — that can help improve your financial wellness today and tomorrow.

Allocating Some Money to Fun

You worked hard all year. So it’s totally understandable if you want to put some of your bonus money simply towards a few wants vs. just needs.

With any financial decision, it typically doesn’t have to be all or nothing, and that includes your work bonus. In fact, taking a balanced approach to your money might actually help you to maintain the stamina that financial goals often require.

Although the exact split is ultimately up to you, to avoid overspending, you might want to consider putting roughly 90% of your bonus towards your financial goals, and devoting about 10% to “fun money.”

If you’re getting a $5,000 bonus (after taxes), for example, that means you would have $500 to spend treating yourself. The other $4,500 would then go towards putting a big dent in your money goals.

💡 Quick Tip: Your money deserves a higher rate. You earned it! Consider opening a high-yield checking account online and earn 0.50% APY.

Chipping Away at Debt

If you have debt — whether from a student loan, car loan, or credit card debt — a bonus can be a great way to start whittling away at whatever balance you have to contend with, or even wiping it out completely.

Doing this can help you avoid throwing more money away just on interest charges, and if you manage to wipe out debt completely, you’ll have one less financial responsibility to stress about every month.

How much of your recent influx of cash should be directed toward debt reduction is entirely personal, and will depend on your situation. Some financial planners recommend that people with high-interest debt consider putting around half of their annual bonuses toward paying down that debt. But this decision will depend on your individual circumstances.

Since credit card debt typically costs the most in interest, that can be a great place to start. The average annual percentage rate (APR) for credit cards was 28.70% as of March 2025. So if your goal is to make your money work for you, it may be smart to minimize credit card balances or, even better, pay them off completely. It would be unreasonable to expect that you could out-invest what you are paying out in credit card interest.

Saving for a Short-Term Goal

If you haven’t yet started, or haven’t quite finished, creating an emergency fund, getting a bonus can be a great time to beef up that financial cushion.

While many people don’t like to think about the possibility of their car breaking down, a medical emergency, or job loss, should one of these unexpected events occur, it could quickly put you in a difficult financial situation. Without back-up, you might have to rely on credit cards or high-interset loans to get by.

How much to sock away for a rainy day is highly personal. But a common rule of thumb is to create an emergency fund that has enough money to cover at least three to six months of living expenses. You may need more or less, depending on your situation.

If you already have a decent cash cushion, you may next want to think about what large purchases you are hoping to make in the not-too-distant future, say, the next few months or years. This could be a down payment on a home, a renovation project, taking a special family vacation, buying a new car, or any financial step that requires a large infusion of cash. Then consider using at least some of your bonus check to jump start these savings goals, or add to previously established ones.

It’s a good idea to put money you are saving for a short-term goal (whether it’s a down payment or an emergency fund) in an account that is safe, earns interest, and will allow you to access it when you need it.

Some options include a savings account at a traditional bank, an online savings account, or a certificate of deposit (CD). Keep in mind, though, that with a CD, you typically need to leave the money untouched for a certain period of time.

💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

Invest for the Future

Bonus money can also help you start investing in longer-term goals, such as retirement or paying for a child’s education. Using bonus money to buy investments can help you build wealth over time.

For example, a lump sum of cash can work wonders in boosting your retirement savings. Even if you’re technically on track for retirement, adding more money to your individual retirement account (IRA) or 401(k) today can leave you with a larger income stream when you’re older. If you’re already contributing to these accounts, be aware that 401(k)s and IRAs come with annual contribution limits.

You can contribute to your retirement using your bonus in a couple of ways. Many companies will automatically deduct from your bonus for your 401(k) at the same rate as usual. You can also ask your company in advance if you can have a special withholding for your bonus. You may be able to fill out a form (or go onto the company portal) to designate up to 100% of your bonus to your 401(k).

If you can’t direct that money to your 401(k), and you’re eligible for an IRA, consider maxing that out instead. Either one can help get you closer to a great retirement — and may also help you save significantly on taxes in the short term.

People who have kids may want to consider putting some bonus money toward starting, or adding to, a college savings account, such as a 529 plan (which in some states can offer tax benefits).

For financial goals outside of retirement, you may want to look into opening a brokerage account. This is an investment account that allows you to buy and sell investments like stocks, bonds, and mutual funds. A taxable brokerage account does not offer the same tax incentives as a 401(k) or an IRA, but is much more flexible in terms of when the money can be accessed.

How much of your bonus you should put towards long-term investments is an individual decision that will depend on your current financial circumstances.

Recommended: Investment Portfolio vs Savings Account

The Takeaway

No matter the size of your hard-earned bonus, it’s a good idea to think about how it can best serve you and your goals in both the short and long term. Some smart ways to use bonus money include getting ahead of high-interest debt, setting up or enlarging your emergency fund, saving up for a large purchase (such as a home), as well as beefing up retirement savings and other long-term investments. You can also mix and match smart spending, saving, and investing to fit your financial situation.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How much of your bonus should you spend?

A good rule of thumb is to spend no more than 10% to 25% of your bonus on discretionary items, like treating yourself or loved ones. Consider putting the rest towards financial goals such as saving, investing, or paying off debt. This balanced approach lets you enjoy the reward while also using it to build long-term security.

Should I use my bonus to pay off debt?

Yes, using your bonus to pay off high-interest debt (like credit cards) can be a smart financial move. It reduces the amount you’ll pay in interest over time and can have a positive impact on your credit profile. You might prioritize debts with the highest interest rates first. If your debt is management or low-interest, consider splitting your bonus between debt payments, savings, and investments. This approach helps reduce financial stress while also strengthening your overall financial health.

Are year-end bonuses taxed?

Yes, year-end bonuses are taxed as supplemental income by the internal revenue service (IRS). If your bonus is included in your regular pay, it will likely be subject to standard payroll withholding. If it’s issued as a standalone check, on the other hand, it may be subject to a flat federal withholding rate of 22%.

However your bonus is taxed, your total tax liability may change depending on your annual income and tax bracket, so you could owe more (or get a refund) at tax time.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

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 .

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SOBNK-Q225-033

If you’re house-hunting, you are probably spending a lot of time scrolling through online listings. And you may well wonder what certain terms mean, such as “turn-key” and “as-is.”

To help you be more efficient and less confused by the real estate jargon you will find, read this list of definitions. This intel will help you understand the message a listing is trying to send you and streamline your search.

Real Estate Listing Terms Decoded

Real estate has a language all its own. To figure out which homes may be worth looking at and which might not, you can use this handy real estate translator next time you peruse the listings. Consider this lingo, in alphabetical order:

1. As-is

If you see the words “as-is” in a real estate listing, proceed with some caution: This typically indicates that there are repairs or renovations that need to be done that the current owner is not going to address and is passing off to the buyer. The real estate contract will likely specify this if you do move forward with buying the home.

2. Built-ins

Built-ins are features like bookshelves, benches, or cabinets that are permanently built into the home itself, and are fairly common in older construction. Built-ins can be charming and convenient, but they can also limit the flexibility you have in arranging and decorating the space as you see fit.

3. Cozy

While this descriptor may bring to mind a comfy armchair and a steaming mug of cocoa, in real estate, “cozy” tends to mean “small.” The home may have minimal square footage, meaning each room may have very limited space.

💡 Quick Tip: Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, allow home mortgage loans with as little as 3% down for qualifying first-time homebuyers.

4. Charming

“Charming” is often another code word for a house with a small footprint. It may also indicate an older construction — which may, indeed, be charming, but might also end up needing costly repairs and renovations.

5. Cottage

This is yet another word that sounds like it’s invoking a feeling when it may really be describing a size — and that size may be on the smaller side. Cottages tend to be one- to two-bedroom houses and, again, might also be dated.

6. Custom

While “custom” sounds cool, it may or may not be. This term indicates that the property includes some built-to-order features or additions that appealed to the previous owners. These features, however, may or may not be to your taste. Perhaps there’s a wall of windows you’ll love or a tub in the primary bedroom that you’d rather have relocated.

7. Fixer

A listing agent may use this term as a shortening of “fixer-upper.” In other words, major renovations are likely going to be needed.

Recommended: The Cost of Buying a Fixer-Upper

8. Good bones

A home with “good bones” is typically one that needs some renovation and repair, but that has solid original construction and a desirable layout. In other words, the skeleton of a great home is there, but you may need to pay for home repairs and do other work to make it livable.

9. Great potential

In a similar vein to “good bones” or “hidden gem,” a home with “great potential” is typically one that provides an opportunity for the right buyer — but which likely needs some work to get there.

10. Handyman special

This is another term that can indicate that a property needs a lot of work — thus making it a good opportunity for a handy homeowner. The house may be priced lower than other, more fixed-up homes in the area.

Recommended: Home Equity vs. HELOC Loans

11. Hidden gem

These words might suggest a nice home in an out-of-the-way location or a home in a popular and trendy locale that needs some work. Either way, it can indicate that the property offers a great opportunity for the right buyer, though you may have to put in some work or make some sacrifices.

12. Investor special

That sounds like a good thing, right? But a real estate agent might use this phrase to mean that a house is in pretty rough shape. It will likely take significant work to make the place livable, meaning you may only be able to buy it for cash or with a rehab loan, such as an FHA 203(k) home loan.

13. Lives large

This indicates that the home may appear small in terms of square footage, but, when you are actually in the property and walking around, it feels a lot more spacious.

14. Location, location, location

This is perhaps one of the most common real estate catchphrases. This language in a listing puts a heavy emphasis on a property’s location, which could potentially indicate that the house itself leaves something to be desired.

Recommended: First-Time Homebuyer Guide

15. Loft

“Loft” indicates that the home is large, open, and airy, with high ceilings and few interior walls. The bedroom, for instance, may be situated on an open second-floor landing that looks out directly onto the living room below. This may make for a picturesque living situation, but also one with relatively little privacy.

16. Modern

Here’s a tricky one. Although you might assume “modern” means that a place is newly constructed and contemporary in style, it can also refer to mid-century modern, an era of architecture and design dating to the 1950s and 1960s with a “Mad Men” vibe.

17. Motivated seller

“Motivated seller” means that the seller is motivated to make a deal go through and may be willing to hear lower offers or make concessions to get it to happen.

18. Move-in ready

“Move-in ready” typically means a home doesn’t need any major, mandatory repairs and is ready for you to start living in as soon as you’ve closed on the property. Of course, this term does indicate that the seller probably has a lot of leverage to demand the highest possible offer on the home.

19. Natural landscaping

“Natural landscaping” might indicate that there’s actually very little landscaping at all. Rather, the property may have lots of wild-growing flora that needs to be cleared to create an organized outdoor living space, depending on your taste.

20. Original details

As with “well-maintained,” “original details” suggests that the home has some older features that you may love, but may also require some maintenance/upgrading in the future.

21. Priced to sell

“Priced to sell” often means that the seller is pretty set on the price they’ve offered. It may indicate that you probably won’t be able to negotiate it down too far.

22. REALTOR (in all caps)

Although “real estate agent” and “realtor” are often used interchangeably, REALTOR is actually a term trademarked by the National Association of REALTORS (NAR) . Real estate agents can only use the title REALTOR in all caps if they are members of NAR and adhere to the organization’s strict code of ethics.

23. Room to roam

A home with “room to roam” is typically one with a larger-than-average lot with room to create outdoor living/play spaces or grow a garden. Or it may indicate that the house has a rambling layout.

24. Rustic

At its best, “rustic” might mean natural wood fixtures and a kind of casual, barn-inspired style. At its worst, “rustic” might mean old, unprofessionally constructed, or poorly maintained.

25. Serious buyers only

This term is usually meant to keep casual browsers or open-house visitors who are “just-looking” at bay. The seller likely doesn’t want to waste their time with people who aren’t seriously considering making an offer.

26. TLC

Short for “tender loving care,” TLC is yet another term in real estate listings that typically indicates the home in question needs some renovations and repairs before it’s comfortable — or even livable.

27. Turnkey

Basically a synonym for move-in ready; just turn the key, and you can set up your home!

28. Unique

“Unique” is another word that can go either way. It could be used to describe a lovely, one-of-a-kind feature, like a rooftop patio. Or it could be used to describe something oddball, like a sunroom converted into a photographer’s darkroom.

29. Up-and-coming neighborhood

An up-and-coming location is one that might actively be evolving or drawing new residents. However, it can also indicate that the neighborhood may still contain a fair number of run-down homes and have a way to go before it’s considered a hot housing market.

30. Vintage

“Vintage” is generally code for “really outdated.” Those 1960s appliances might look cute in the pictures, but how much more life do they have in them before they need to be replaced?

31. Well-maintained

This term can act as a yellow light. “Well-maintained” often indicates that a property has some age on it. (After all, if it’s new, there’s nothing that has needed maintenance yet). An older home isn’t automatically a bad thing, but it does mean you may be faced with upgrades or appliance replacements sooner rather than later.

💡 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 feel like property listings are sometimes written in a foreign language, you’re not entirely off-base. Listing agents often use terms that may be well-known in real estate circles, yet are unfamiliar to the average first-time home-buyer.

Agents may also use vague-sounding terms and phrases to make a home’s less-appealing qualities sound more attractive. Knowing how to decode real estate listings can be a great first step toward finding the perfect home.

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 are active listings?

For a house listing to be considered “active” the house must be currently on the market and available for purchase. You should be able to schedule a showing of the house or make an offer on it.

What is a latent defect in real estate?

A latent defect is a hidden problem in a house that isn’t apparent during a routine inspection. If you buy a house and later discover an existing latent defect, you may have some legal recourse. But it’s wise to get an experienced home inspector to go through a house before you buy it to help minimize the risk of discovering a latent defect later on.

What are the three most important words in real estate?

The famous saying “location, location, location” is meant to describe the most important factors that make a property desirable. Where a house is located impacts the house’s value, the availability and quality of local services and amenities, and the safety and resources of its neighborhood.

Photo credit: iStock/irina88w

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

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

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

SOHL-Q225-042

Finding the perfect home to buy is no small feat: so many online searches, drive-bys, and open houses. Then there’s the time-sucking process of finding the right mortgage. A matchmaker called a mortgage broker can help.

The broker goes fishing for multiple loan offers from different types of lenders in pursuit of the best deal.

How exactly does a mortgage broker work? Keep reading to discover more about mortgage brokers, how to find one, and the pros and cons of working with one.

First, Mortgage Basics

Whether a consumer chooses to work with a mortgage broker or not, it’s best to know what it means to take out a home mortgage.

These are some of the basics.

Loan term: This refers to how long borrowers have in order to repay their loan. A typical term is 15 or 30 years.
There are advantages and disadvantages to choosing a shorter or longer loan term. For shorter terms, the monthly payments are higher but the interest rates are usually lower, and the total cost of the loan is lower.

For longer-term loans, the total cost is higher, and generally the interest rates are higher, too, but monthly payments are lower.

Fixed rate vs. adjustable rate: The chosen interest rate dictates whether the interest rate will change over time or stay consistent, if the monthly principal and interest payment will change, and how much interest will be paid over the life of the loan.

Typically, fixed-rate mortgages have no surprises but carry a higher rate than the initial rate of an adjustable-rate mortgage, or ARM. Fixed interest rates don’t change over time, and the monthly payment amount remains the same.

With an ARM, after an initial period, the interest rate can fluctuate based on the market, which can lead to the monthly principal and interest payments increasing or decreasing over the life of the loan.

Recommended: First-Time Homebuyer Guide

What Is a Mortgage Broker?

In short, a mortgage broker is a middleman between the homebuyer and mortgage lenders. While requirements vary by state, typically brokers are trained professionals who must obtain certain licenses.

When you plan to buy a home, it can be smart to research multiple lenders. Doing so allows you to see which lender is offering the best rate and fees for your particular financial situation and down payment.

This can be a time-consuming process that requires submitting multiple documents and applications. A mortgage broker can do all of the work associated with applying for the consumer.

Because mortgage brokers generally have partnerships with multiple lenders, they can help find the best financial fit for their clients while saving them the time it would take to do the work themselves.

Recommended: How to Qualify for a Mortgage: 9 Requirements

Pros of Using a Mortgage Broker

Why use a mortgage broker? It’s not for everyone, but there are some benefits worth considering.

Provides more access. Because of their professional relationships, mortgage brokers usually have more access to different lenders than the average person does — some that many consumers don’t even know exist because they offer home loans only through mortgage brokers.

May find better rates and terms. Mortgage brokers may be able to find lower rates and fees than the average homebuyer could find on their own.

Simplifies the process. As mortgage brokers are experts in their field, they can make the entire process easier to understand. They’ll break down the differences between lenders and help their clients understand mortgage jargon. It’s worth noting that consumers should still educate themselves so that they have a good understanding of the process.

Saves time. Buying a home is time-consuming and can be stressful. A broker will research rates, fees, and minimum credit score requirements so that clients don’t have to.

Cons of Using a Mortgage Broker

There are also some downsides worth considering before pursuing this path.

Cost can vary. Before agreeing to work with a broker, ask how they make their money. In some cases, the lender pays the mortgage broker, and in others, the client pays the broker. If payment is the client’s responsibility, ask if they charge a flat fee or earn a commission.

Lenders usually pay a higher commission than borrowers do. Lenders typically pay between 0.5% and 2.75% of the loan amount. When a client pays a commission, a broker usually charges an origination fee of less than 3% of the loan amount.

The housing market in a particular area can influence what a broker charges.

Conflicts of interest may arise. While at first glance it may seem more beneficial to work with a mortgage broker who is paid by the lender, give this some thought. Is the broker biased toward lenders that pay the commission? Researching brokers before working with them and asking for referrals can help. Do some digging to see if past clients found them to be trustworthy.

Some lenders don’t work with mortgage brokers. Some lenders only work with brokers, and some never work with them. People who hire a mortgage broker may miss out on certain opportunities.

How to Shop for a Mortgage Broker

The search for the right mortgage broker should not be taken lightly. Doing research and considering options are important steps toward making the experience a positive one.

One of the first steps to take toward finding a good mortgage broker is to ask for references from trusted friends, family members, or colleagues who have recently bought homes with the help of a mortgage broker.

To widen the search, there are also websites that host customer reviews of local mortgage brokers. While any broker may have a few negative reviews, look for patterns in the reviews to make sure that negative experiences are the exception, not the norm.

Treat shopping for a mortgage broker like interviewing a candidate for a job. Ask about their certification and experience, commissions, and what the homebuying process would look like in tandem with them.

You may be able to find out if a broker is licensed through the National Mortgage Licensing System & Registry.

Finding a Mortgage Without a Mortgage Broker

People who aren’t interested in working with a mortgage broker can shop for a mortgage on their own from a commercial bank, credit union, or private lender. Would-be homeowners can work with an online lender, which can make applying easy.

Prequalifying, based on self-reported data, will give you an idea of how big a loan you may qualify for — a ballpark figure. (Prequalifying involves a soft credit inquiry, which does not affect a credit score.)

If you’re serious, preapproval is the next step, when lenders verify your employment status, income, credit history, and debt to determine how much you can reasonably afford to borrow. If approved, you’ll receive a conditional commitment in writing for an exact loan amount. (Applying with too many lenders may result in score-lowering hard inquiries, but having many offers in hand provides negotiating leverage with individual lenders.)

The Takeaway

What is a mortgage broker? A go-between for the loan seeker and lenders. There are many pros and cons to consider. A mortgage broker can be just the ticket for some home buyers, but you don’t need to sign on with a broker to obtain a great rate on a home loan.

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

FAQ

How does a mortgage broker make money?

Mortgage brokers are usually paid a commission by the lender in return for bringing in a customer. In some cases where a homebuyer has poor credit or other financial challenges, a broker may charge a fee that is payable only if the broker is able to find the borrower a loan.

How are a mortgage broker and a mortgage loan originator different?

A mortgage broker can typically work with an array of lenders to find the mortgage that works best for their home-buying client. A mortgage loan originator usually works for a bank or other lender, and so can only offer loans from that lender.

Is a mortgage broker the same as a mortgage underwriter?

A mortgage broker helps a would-be homebuyer find a loan. A mortgage underwriter reviews the homebuyer’s mortgage application and decides whether or not it should be approved and at what interest rate.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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-Q225-056