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A 601 credit score isn’t bad or good — it falls squarely in the “fair” category and below the national average credit score of 715. While there’s a good chance you’ll get approved for a loan or credit card with that score, you might need to look a bit harder to land those coveted low interest rates and flexible terms.
Here, we’ll walk you through what a 601 credit score means, what types of financing you may be able to secure with such a score, and what you can do to boost your credit score.
Key Points
• A credit score of 601 is categorized as “fair” and is below the national average.
• A 601 score may limit loan and credit card options, leading to higher interest rates.
• Some lenders may still approve you for financing, including personal loans.
• Financial products you might qualify for include secured credit cards, retail cards, and FHA loans.
• Regularly paying bills on time, reducing credit card balances, and avoiding new debt can improve the score.
What Does a 601 Credit Score Mean?
A credit score is a three-digit number that reflects your creditworthiness, or how likely you are to pay back the money you borrowed. Lenders use it along with other information to determine whether to approve you for credit and at what interest rate.
Credit scores typically range from 300 to 850. The higher the number, the better your score. Although you have different credit scores, the one used in most lending decisions is the FICO Score. It’s categorized as follows:
• Poor: 300-579
• Fair: 580-669
• Good: 670-739
• Very Good: 740-799
• Excellent (or exceptional):: 800-850
As you can see, a 601 credit score is considered “fair,” which might impact whether you’re approved for credit and the terms you’re offered. If you’re preparing to apply for a loan or credit card, it’s a good idea to check your credit score so you have an idea of where your credit profile stands. Credit scores update every 30 to 45 days.
Having a fair credit score might prevent you from qualifying for some types of loans and credit cards. And the ones you are approved for may come with steeper interest rates and less-flexible terms.
However, there are some financial products you may be able to get with a 601 credit score. Let’s take a closer look.
Can I Get a Credit Card with a 601 Credit Score?
In general, the better your credit score, the better your chances of getting approved for a credit card. With a 601 credit score, your choices may be more limited. What’s more, your APR might be higher, and it’s possible you won’t qualify for cards with rewards or cash-back opportunities.
However, options do exist. Here are two to consider:
Secured cards
If you are working toward building or establishing your score, you might consider a secured card. These are cards backed by a security deposit, which acts as a form of collateral in case you fall behind on your payments. The security deposit amount and line of credit typically match each other. So if your security deposit is $500, so is your line of credit.
On the upside, a secured card usually has lower minimum credit score requirements and less-rigid financial criteria. On the downside, they also typically have higher interest rates, lower credit limits, and fewer perks.
Retail cards
Retail and store cards are cobranded cards with a store or group of retailers. You can usually only use the card at that particular store, and it may come with loyalty discounts and promotions specific to the retailer.
Retail cards tend to have lower minimum score requirements and less-stringent criteria, but they also tend to have higher interest rates. Plus, you can usually only use the card at that retailer.
Can I Get an Auto Loan with a 601 Credit Score?
Yes, it’s possible to get an auto loan with a 601 credit score, though you might end up paying more in borrowing costs. According to 2024 data from Experian, the average interest rate on a new car for a borrower with a 601 credit score is 9.83%. (That rate jumps to 13.92% for used cars.) Compare that to the 5.25% average interest rate offered to borrowers with a credit score of 781 or higher.
Can I Get a Mortgage with a 601 Credit Score?
Securing a credit card or car loan is one matter, but what about getting a mortgage on a house with a 601 credit score? It depends on the type of home loan you’re applying for. For example, borrowers usually need to have a credit score of at least 620 to qualify for a conventional loan or VA loan.
With a 601 credit score, you may want to focus on FHA loans. These loans are backed by the Federal Housing Administration (FHA) and have less-stringent eligibility requirements than a conventional loan. Borrowers with a 580 credit score are eligible with a 3.5% down payment. People with a credit score as low as 500 may also qualify; however, they’ll be required to make a 10% down payment.
It’s also worth noting that your credit score is just one factor lenders consider in their decision. They’ll also consider a range of other factors, such as your debt-to-income (DTI) ratio, earnings, and job consistency.
Can I Get a Personal Loan with a 601 Credit Score?
Personal loans can be an attractive form of financing because you can use the funds for nearly any purpose.
With a 601 credit score, your personal loan options may be more limited than they would be if you had a higher score. However, there are lenders who may consider approving you for a loan, though it could come with a higher interest rate and less-flexible terms.
Still, you may come out ahead financially if you use the funds from the personal loan to consolidate high-interest debt, such as credit cards. That’s because personal loans are generally less expensive than credit cards.
As you’re considering your options, it’s important to understand how much you’ll pay for the loan over its lifetime. A personal loan calculator can help you arrive at an estimate based on the rates and terms you’re offered.
The Takeaway
Wondering if a 601 is a bad credit score or a good one? Technically, it falls in the “fair” category, though it’s well below the average American’s credit score of 715.
Whether you’re shopping around for a mortgage, auto loan, credit card, or personal loan, you might want to consider building your credit before pulling the trigger and formally applying.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.
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.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
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 .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Wisconsin is absolutely packed with outdoor activities, wineries, breweries, and cultural events. It’s also home to some of America’s best cheese products, giving it the nickname America’s Dairyland. The job market is on the rise in Wisconsin, too. By 2030, analysts predict the state will have 6.3% job market growth, totalling well over 3 million jobs. There are also many opportunities for affordable living to be found here. Keep reading to explore the best places to live in Wisconsin for every stage of life.
Best Places to Live in Wisconsin
Everyone can find a little something just for them in Wisconsin. Whether you’re looking for waterside, city, or small-town living, you can find it here. Here are our top picks for the best places in Wisconsin to live when cost is a consideration..
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💡 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.
Best Affordable Places to Live in Wisconsin
Compared to the rest of the nation’s cost of living by state, Wisconsin is an affordable state to live in. Even big cities like Madison and Green Bay are pretty affordable, compared to other U.S. metro areas. However, here are our top three lesser known favorites for the most affordable locations.
1. La Crosse
Photo credit: iStock/EAGiven
La Crosse is known for its well-preserved downtown architecture and beautiful surrounding parks. As a college town, it offers many notable restaurants and bars in which to fill your evenings. Plus, there’s usually a festival just around the corner, such as Riverfest or the Blue River Folk Festival. If you’re considering purchasing in La Crosse, it can be a good idea to visit a home loan help center to learn more about mortgage options.
Population: 51,327
Median Household Income: $53,803
Cost of Living: 92% of U.S. average
Average Rent Price: $995
Home Price-to-Income Ratio: 4.64
2. Waukesha
Photo credit: iStock/DenisTangneyJr
Waukesha is home to Carroll University as well as numerous natural springs. In fact, in the late 19th century, the city’s springs were believed to hold healing powers, and people came from all over the country to sample the waters. Today, the city has festivals throughout the year, and the downtown area has numerous fine dining options. If you’re a new homebuyer, a first-time homebuyer guide can show you how the process works before you start house hunting.
Population: 70,446
Median Household Income: $81,651
Cost of Living: 96% of U.S. average
Average Rent Price: $1,609
Home Price-to-Income Ratio: 4.59
3. Brookfield
If you’re a golfer, Brookfield may be just the place for you. The city has a few notable golf courses that attract both enthusiasts and professionals alike. Brookfield is also known as an established business epicenter, which has contributed to the city’s overall ‘professional’ and ‘orderly’ design. But, the city is also known for its shopping, dining, and outdoor parks, too. If you want to buy a home in a competitive market, follow these tips to qualify for a mortgage.
Population: 41,884
Median Household Income: $124,026
Cost of Living: 102% of U.S. average
Average Rent Price: $2,600
Home Price-to-Income Ratio: 3.78
Best Places to Live in Wisconsin for Families
Growing your family and looking for somewhere to spread some roots? Check these cities out to get your imagination rolling.
Named after a Potawatomi chief, Wauwatosa means “firefly.” You’ll find many Victorian-style homes lining beautiful residential streets here. The town also has a charming shopping district known as “Tosa,” and is very close to the Milwaukee County Zoo for animal-loving kids and adults alike. Before you start heading to open houses, learn the difference between mortgage prequalification and preapproval.
Population: 47,038
Median Household Income: $93,859
Cost of Living: 88% of U.S. average
Average Rent Price: $1,635
Home Price-to-Income Ratio: 3.99
2. Eau Claire
Photo credit: iStock/Jacob Boomsma
Eau Claire, which is French for clear water, has a rising arts and music scene, with music festivals devoted to jazz, folk, bluegrass, country and more sprinkled through the calendar. The city also hosts public family events throughout the year. Before you start looking for your next home, learn how the mortgage preapproval process works.
Population: 70,542
Median Household Income: $65,369
Cost of Living: 90% of U.S. average
Average Rent Price: $1,100
Home Price-to-Income Ratio: 4.45
3. Sun Prairie
Photo credit: iStock/Jacob Boomsma
Sun Prairie is the birthplace of Georgia O’Keeffe, and has several museums within the city. Families appreciate its exceptional public school system and surrounding parks, and the city, which has been growing rapidly, has embarked on a systematic development plan to ensure expansion suits all of its communities.
Population: 37,890
Median Household Income: $90,521
Cost of Living: 103.4% of U.S. average
Average Rent Price: $1,555
Home Price-to-Income Ratio: 4.45
💡 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.
Best Places to Live in Wisconsin for Young Adults
When you’re just starting your adulting journey, it’s important to be in the right town in order to get a good mix of opportunities and activities. When also considering affordability, we recommend the following three cities for young adults in Wisconsin.
1. Milwaukee
Photo credit: iStock/Jon Mattrisch
Milwaukee hosts several large music festivals each year, and is home to eight colleges within the city itself (not to mention several that are on the outskirts of the city). It’s also home to multiple breweries, including Miller and Pabst. Add in dining and shopping, and it’s a hotbed for young adults.
Wausau has a number of outdoor recreational activities, such as Wausau Whitewater park and Granite Peak Ski. It also has a bustling downtown area for young professionals to enjoy, along with a vibrant music scene with venues such as The Grand Theater.
Population: 39,968
Median Household Income: $61,877
Cost of Living: 84.7% of U.S. average
Average Rent Price: $1,100
Home Price-to-Income Ratio: 3.48
3. Kenosha
Photo credit: iStock/Kevin Scott
Kenosha has several hot spots for young adults, including Simmons Island Beach, Petrifying Springs Park, and downtown Kenosha. While all of those things are worth multiple repeat visits, nothing beats Mars Cheese Castle, which is one of the best specialty food stores in Wisconsin.
When you’re ready to retire, you need somewhere that’s both affordable and active. Check out the three towns below for your next phase of life.
1. Merrill
Photo credit: iStock/Michael-Tatman
Approximately 22% of Merrill’s population is 65 years or older, and there are a number of things to do in Merrill to keep residents busy, such as golf courses, snow skiing, fishing, and hiking in local state parks. Merrill also has a bustling downtown, complete with shopping, dining, and a movie theater.
Population: 9,089
Median Household Income: $49,947
Cost of Living: 78.3% of U.S. average
Average Rent Price: $795
Home Price-to-Income Ratio: 3.93
2. Burlington
Property taxes are on the higher side here, but this town has a lot going for it. With plenty of coffee shops, shopping, and a museum devoted to yo-yos and spinning tops, you may just feel like you fell into a Hallmark Movie.
While property taxes are higher in Columbus than the state average of 1.59%, Columbus has a fairly large population of people 65 and older. According to the latest census data, 17% of the population consists of retirees. Columbus hosts an antique mall, curling club, and has a few arts and crafts fairs throughout the year.
Population: 5,448
Median Household Income: $74,957
Cost of Living: 93.9% of U.S. average
Average Rent Price: $2,300
Home Price-to-Income Ratio: 3.76
Best Places to Live in Wisconsin Near the Lake
From flat, fertile land fed by gentle rivers in the south to dark forest punctuated by wetlands and lakes to the north, Wisconsin is a landscape painter’s dream. Lake Michigan forms the eastern border, and Lake Superior touches the northwest, but there are many inland lakes as well.
1. Ashland
Photo credit: iStock/Melissa Kopka
The average home value here is $100K lower than the state average. So if you are an outdoor enthusiast, consider checking this area out while it is still relatively affordable. Plus, the local art scene is also alive and well in Ashland, as there are plenty of art galleries and outdoor concerts to enjoy.
Population: 7,878
Median Household Income: $49,258
Cost of Living: 74.7% of U.S. average
Average Rent Price: $975
Home Price-to-Income Ratio: 3.90
2. Bayfield
Photo credit: iStock/Melissa Kopka
Bayfield is a unique town. You can attend concerts at Big Top Chautauqua, visit a maritime museum, attend unique festivals year round, and hike and shop to your heart’s content. Property taxes are higher than average, but you may just feel you get more than your money’s worth should you choose to move here.
Population: 16,769
Median Household Income: $69,609
Cost of Living: 86.6% of U.S. average
Average Rent Price: $760
Home Price-to-Income Ratio: 4.65
3. Port Washington
Photo credit: iStock/worldofphotos
Property taxes are more than double the state average in Port Washington, but the area comes with some serious perks. It has a beautiful harbor and downtown area, local trails, and numerous places to dock your own sea vessel for evening fishing excursions.
Population: 12,763
Median Household Income: $81,582
Cost of Living: 107.2% of U.S. average
Average Rent Price: $976
Home Price-to-Income Ratio: 4.19
The Takeaway
Wisconsin’s a big state with a lot to offer. Whether you’re looking for opportunity or affordability (or both), you can find it here. Take your time exploring, and consider looking at areas that are off the beaten path. It may just be the best decision you ever made.
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.
Where is the best place to live in Wisconsin year round?
It depends on what you’re looking for, but if you’re looking for things to do, take a look at Milwaukee.
Where are the cheapest homes in Wisconsin?
To find the cheapest homes in Wisconsin, you’ll need to be away from both the lakes and the bigger cities, as both home prices and cost of living tend to be higher in these areas. Wausau, which straddles the Wisconsin River, would be a good place to look.
What are the most expensive and cheapest places to live in Wisconsin
Madison, Milwaukee, and Eau Claire are all just slightly higher than the state average for cost of living, but deals can be found with a little looking. Wausau, with a cost of living that is 84.7% of the U.S. average, is one of the cheapest places to live in Wisconsin.
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.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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. ‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will provide you $2,000.^ Terms and conditions apply. This Guarantee is available only for loan applications submitted after 6/15/22 for the purchase of a primary residence. Please discuss terms of this Guarantee with your loan officer. The property must be owner-occupied, single-family residence (no condos), and the loan amount must meet the Fannie Mae conventional guidelines. No bank-owned or short-sale transactions. To qualify for the Guarantee, you must: (1) Have employment income supported by W-2, (2) Receive written approval by SoFi for the loan and you lock the rate, (3) submit an executed purchase contract on an eligible property at least 30 days prior to the closing date in the purchase contract, (4) provide to SoFi (by upload) all required documentation within 24 hours of SoFi requesting your documentation and upload any follow-up required documents within 36 hours of the request, and (5) pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. The Guarantee will be void and not paid if any delays to closing are due to factors outside of SoFi control, including delays scheduling or completing the appraisal appointment, appraised value disputes, completing a property inspection, making repairs to the property by any party, addressing possible title defects, natural disasters, further negotiation of or changes to the purchase contract, changes to the loan terms, or changes in borrower’s eligibility for the loan (e.g., changes in credit profile or employment), or if property purchase does not occur. SoFi may change or terminate this offer at any time without notice to you. ^To redeem the Guarantee if conditions met, see documentation provided by loan officer.
+Lock and Look program: Terms and conditions apply. Applies to conventional purchase loans only. Rate will lock for 91 calendar days at the time of preapproval. An executed purchase contract is required within 60 days of your initial rate lock. If current market pricing improves by 0.25 percentage points or more from the original locked rate, you may request your loan officer to review your loan application to determine if you qualify for a one-time float down. SoFi reserves the right to change or terminate this offer at any time with or without notice to you.
‡Up to $9,500 cash back: HomeStory Rewards is offered by HomeStory Real Estate Services, a licensed real estate broker. HomeStory Real Estate Services is not affiliated with SoFi Bank, N.A. (SoFi). SoFi is not responsible for the program provided by HomeStory Real Estate Services. Obtaining a mortgage from SoFi is optional and not required to participate in the program offered by HomeStory Real Estate Services. The borrower may arrange for financing with any lender. Rebate amount based on home sale price, see table for details.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
Reward is valid for 18 months from date of enrollment. After 18 months, you must re-enroll to be eligible for a reward.
SoFi loans subject to credit approval. Offer subject to change or cancellation without notice.
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By Matt Steinfeld |
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Comments Off on SoFi Expands Loan Platform Business with $5 Billion Agreement with Blue Owl Capital Funds
SAN FRANCISCO – March 13, 2025 – SoFi Technologies, Inc. (NASDAQ: SOFI) finalized an up to $5 billion Loan Platform Business agreement for personal loans with funds managed by Blue Owl Capital, a leading asset manager with over $250 billion in assets under management. This move marks SoFi’s largest Loan Platform Business agreement to date.
SoFi’s Loan Platform Business refers pre-qualified borrowers to loan origination partners as well as originates loans on behalf of third parties. The two-year deal with Blue Owl Capital managed funds reflects the growing demand for personal loans from members and debt investors and advances SoFi’s strategy to diversify revenue streams with less capital-intensive and more fee-based sources of revenue.
“This represents the largest single commitment for SoFi’s Loan Platform Business and is 2x our first commitment, enabling us to help more members get their money right while also diversifying toward less capital-intensive and more fee-based sources of revenue,” said Anthony Noto, CEO of SoFi. “We’re thrilled to work with Blue Owl Capital and build on the strong momentum in our Loan Platform Business in 2025.”
“Blue Owl is excited to be partnering with SoFi to help meet the growing needs of customers through their loan platform business,” added Ivan Zinn, Head of Alternative Credit at Blue Owl. “SoFi has been expanding credit access to more people with innovative solutions. We see a strong opportunity in being part of this growth through this strategic program.”
In 2024, SoFi’s Loan Platform Business originated $2.1 billion of loans. Through its Loan Platform Business, SoFi earns fee income to originate loans on behalf of partners while retaining servicing rights.
About SoFi
SoFi (NASDAQ: SOFI) is a member-centric, one-stop shop for digital financial services on a mission to help people achieve financial independence to realize their ambitions. The company’s full suite of financial products and services helps its over 10.1 million SoFi members borrow, save, spend, invest, and protect their money better by giving them fast access to the tools they need to get their money right, all in one app. SoFi also equips members with the resources they need to get ahead – like credentialed financial planners, exclusive experiences and events, and a thriving community – on their path to financial independence.
SoFi innovates across three business segments: Lending, Financial Services – which includes SoFi Checking and Savings, SoFi Invest, SoFi Credit Card, SoFi Protect, and SoFi Insights – and Technology Platform, which offers the only end-to-end vertically integrated financial technology stack. SoFi Bank, N.A., an affiliate of SoFi, is a nationally chartered bank, regulated by the OCC and FDIC and SoFi is a bank holding company regulated by the Federal Reserve. The company is also the naming rights partner of SoFi Stadium, home of the Los Angeles Chargers and the Los Angeles Rams. For more information, visit SoFi.com or download our iOS and Android apps.
Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives. With over $250 billion in assets under management as of December 31, 2024, we invest across three multi-strategy platforms: Credit, GP Strategic Capital, and Real Assets. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional investors, individual investors, and insurance companies differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.
Together with over 1,100 experienced professionals globally, Blue Owl brings the vision and discipline to create the exceptional. To learn more, visit www.blueowl.com.
Availability of Other Information About SoFi
Investors and others should note that we communicate with our investors and the public using our website (https://www.sofi.com), the investor relations website (https://investors.sofi.com), and on social media (X and LinkedIn), including but not limited to investor presentations and investor fact sheets, Securities and Exchange Commission filings, press releases, public conference calls and webcasts. The information that SoFi posts on these channels and websites could be deemed to be material information. As a result, SoFi encourages investors, the media, and others interested in SoFi to review the information that is posted on these channels, including the investor relations website, on a regular basis. This list of channels may be updated from time to time on SoFi’s investor relations website and may include additional social media channels. The contents of SoFi’s website or these channels, or any other website that may be accessed from its website or these channels, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
By Liz Young Thomas |
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Comments Off on Liz Looks at: February Inflation
Cool-Aid
After January’s hotter-than-expected inflation report, markets and consumers were crossing their fingers for a cooler read in February and got their wish. The headline Consumer Price Index (CPI) rose by 2.8% year-over-year and 0.2% month-over-month, below expectations of 2.9% and 0.3%, respectively.
Core CPI also came in below expectations at 3.1% year-over-year, but remains well above the Fed’s target of 2%. Nevertheless, markets initially welcomed the cooler-than-expected data and rallied as a result. Investors have been whipsawed so far in 2025 on tariff developments and policy uncertainty, dragging broad indices and high valuation stocks down. This cool inflation print gives markets a much needed reprieve from the downside volatility, even if it’s short-lived and growth concerns continue to muddy the waters.
One of the forces I’ve warned investors about is the beginning-of-year seasonality that can affect inflation prints. Simply put, inflation tends to come in hot in January — deemed the “January effect” — and can continue to surprise to the upside for the first quarter. For this reason, we like to track the non-seasonally adjusted data to get a raw read on what’s going on.
As shown in the chart below, February’s non-seasonally adjusted CPI came in lower than 2023 and 2024, and very close to the pre-pandemic average. Also notable in this chart is the tendency for CPI to fall gradually as the year progresses. It’s too early in 2025 to say whether we’re decisively on that path, but this month’s reading is encouraging.
Under the Hood
Once again, we’re in an environment where consumers are talking about specific components of inflation on a daily basis. The hot topic of late has been rising egg prices, and it’s true that the category encompassing food at home has seen some bumpy data, but in February it actually came in flat, with other components offsetting the increase in egg prices.
More interesting this time was the transportation category, which helped bring overall inflation down quite a bit. The concern over the past few months had been the rise in car insurance costs, which remains elevated, but yet wasn’t too problematic in February.
As somewhat of a surprise, airfare fell quite a bit and helped cool the category, bringing transportation services down to -0.8% for February — a far cry from January’s +1.8% and the lowest reading since September 2021.
Of course we still have the problem of elevated shelter prices, but it’s nice to see one of the other problematic components cool off this time around. Baby steps.
Expectations > Events
As with most things market-related, expectations can be more important than the actual events. In this case, we track inflation expectations for short and longer term periods to gauge the market’s outlook on how things might change.
The recent divergence between 1-year and 5-year expectations shown below is a direct result of trade policy uncertainty. Investors are expecting short-term inflation to rise due to tariffs, but longer-term inflation to fall if trade policy affects growth prospects over time.
There’s no definitive way to categorize the current expectations as “good” or “bad,” but I do think it’s safe to say that the increase in 1-year expectations coupled with inflation readings that remain above target will prevent the Fed from signaling or engaging in further cuts in the near-term.
With the next Federal Open Market Committee meeting coming up next week, it’s important to keep a watchful eye on this. The Fed gets concerned when higher inflation expectations become entrenched over longer periods, thus changing the way consumers and businesses spend and affecting the cost of living across the board. A rise in 1-year expectations doesn’t count as entrenched, and the gradual fall in 5-year expectations keeps this from becoming a major concern right now.
Trade policy continues to be a moving target, as do inflation expectations. Investors need to be careful not to get too excited about one cooler-than-expected data point and remain vigilant as the tariff conversations develop. But for now, let’s enjoy a short break in the action and a small inflation victory.
Want more insights from Liz? The Important Part: Investing With Liz Thomas, a podcast from SoFi, takes listeners through today’s top-of-mind themes in investing and breaks them down into digestible and actionable pieces.
SoFi can’t guarantee future financial performance, and past performance is no indication of future success. This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Liz Young Thomas is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Form ADV 2A is available at www.sofi.com/legal/adv.
• Mortgage rates in California have trended lower than the national average for decades, and economists predict they’ll be dropping further into 2025.
• Mortgage rates are influenced by economic factors such as inflation, unemployment, and the federal funds rate.
• Lower interest rates result in lower monthly payments, making it easier to afford the same-priced home.
• California offers the full range of mortgage types, including fixed-rate, adjustable-rate, FHA, VA, and USDA loans.
• Jumbo loans are for home purchases requiring loans greater than $806,500 — higher in some areas.
Introduction to Mortgage Rates
Obtaining a home loan is a significant financial decision, and understanding mortgage interest rates is essential for homebuyers in California and elsewhere. Here you’ll find a comprehensive overview of mortgage rates in California, including the factors that influence them, historical trends, and available mortgage types. By staying informed about current rates and exploring assistance programs, individuals can make strategic decisions that support their financial goals and achieve homeownership in California.
Mortgage interest rates are the fees charged by lenders for borrowing money to purchase a home. These mortgage rates are determined by a complex combination of factors that can be separated into two buckets: the state of the economy and the borrower’s financial status.
Economic Factors Influencing Mortgage Rates
Economic conditions play a significant role in determining mortgage rates. Key factors include:
• The Federal Reserve: Often referred to as the Fed, the country’s central bank sets the short-term interest rates that banks use. Although home loan rates are not directly tied to Fed rates, they tend to follow the same economic trends. When the Fed lowers interest rates (to much fanfare), mortgage rates are likely to follow.
• Inflation: When inflation eases, the purchasing power of money increases, making it less expensive for lenders to lend money. As a result, they may pass along the savings to consumers through lower interest rates.
• Unemployment Rate: A lower unemployment rate can lead to higher mortgage rates. A low unemployment rate indicates a strong economy, which typically leads to increased demand for housing. This increased demand puts upward pressure on home prices and, consequently, mortgage interest rates.
Borrower Factors Influencing Mortgage Rates
In addition to economic factors, a borrower’s financial situation also impacts mortgage rates.
• Credit Score: A higher credit score generally translates to a lower mortgage interest rate. Lenders view a high credit score as an indication of responsible financial behavior, reducing the perceived risk of default.
• Down Payment: Increasing the down payment can lower the mortgage interest rate. A larger down payment reduces the loan amount and the debt-to-income ratio, making the borrower less risky in the eyes of the lender.
• Income and Assets: A steady income is important to lenders, who will examine your employment history and salary. Assets such as investments and emergency savings also reassure lenders that you could still pay your mortgage in the event of a job loss or other financial setback.
• Type of Mortgage Loan: Certain types of mortgages tend to have lower rates. For instance, adjustable-rate mortgages (ARMs) typically offer lower initial rates than fixed-rate mortgages. Some government-backed loans, like VA mortgages, can also have lower rates. Additionally, a shorter loan term usually comes with a lower rate than longer terms.
California Mortgage Rate Trends
Historical U.S. Mortgage Rates
Over the past 50 years, national rates have experienced significant fluctuations, ranging from a low of around 3% in the early 1970s to a high of over 18% in the early 1980s. Currently, rates are hovering around 6%, which is relatively low compared to historical averages.
Year
California Rate
U.S. Rate
2000
7.18
8.14
2001
6.78
7.03
2002
6.20
6.62
2003
5.54
5.83
2004
5.48
5.95
2005
5.65
6.00
2006
6.49
6.60
2007
6.38
6.44
2008
6.13
6.09
2009
5.08
5.06
2010
4.83
4.84
2011
4.54
4.66
2012
3.69
3.74
2013
3.85
3.92
2014
4.04
4.24
2015
3.80
3.91
2016
3.63
3.72
2017
3.94
4.03
2018
4.38
4.57
Source: Federal House Finance Agency
Types of Mortgages Available in California
California offers all the types of mortgage loans available to borrowers nationwide. In an April 2024 SoFi survey of 500 people intending to purchase a home, 38% of respondents said that understanding mortgage options is one of the most confusing parts of the home buying process. So take a moment to review the options below — there may be some surprises.
Conventional Loan
Conventional loans are not backed by the government and typically require a down payment of at least 3%. (The national average down payment is 15%.) They can be fixed-rate or adjustable-rate.
Fixed Rate Mortgage
Fixed-rate mortgages maintain the same interest rate throughout the life of the loan, ensuring that the principal and interest payments remain constant. Fixed-rate mortgages are available in terms of 10, 15, 20, or 30 years.
Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgages (ARMs) initially offer a lower rate than fixed-rate loans. However, after a certain period (usually 5 or 7 years), the interest rate can adjust periodically based on market conditions. ARMs can be beneficial if you plan to sell the home before the fixed period ends or if you expect interest rates to decrease in the future.
FHA Loan
FHA loans usually have more lenient eligibility requirements than conventional loans. These mortgages are insured by the Federal Housing Administration, which helps reduce the risk to lenders, allowing them to offer lower interest rates and reduced down payment requirements.
VA Loans
VA loans are available to veterans, active-duty military members, and some Reserve and National Guard members. One of the primary benefits of VA loans is that they do not require a down payment, making them an attractive option for veterans.
USDA Loans
USDA loans are designed for low-income borrowers looking to purchase a home in a rural area. These loans are backed by the U.S. Department of Agriculture (USDA) and offer competitive interest rates and relaxed credit requirements.
Jumbo Loans
Jumbo loans are conventional loans that exceed the conforming loan limit set by the Federal Housing Finance Agency (FHFA). Jumbo loans typically require a larger down payment and may have higher interest rates than conforming loans.
Popular Places to Get a Mortgage in California
Securing a mortgage often depends on choosing the right location, where home prices are affordable and mortgage terms are favorable. Factors such as cost of living, proximity to supermarkets and good schools, and job opportunities also play a significant role.
Least Expensive Locations
One way homebuyers can search for affordable areas is by checking their cost of living compared to the overall cost of living in the U.S. Cities with a cost of living index (COLI) number of less than 100 are relatively affordable; COLIs of more than 100 are more expensive. In high-priced states like California, however, most cities rank above the average.
That means not only is housing likely more expensive, but so are the average monthly expenses for one person. Some of the least expensive locations to get a mortgage in California include:
• Bakersfield: Bakersfield is a city in the southern Central Valley and offers a low cost of living compared to other parts of California. COLI: 109.6.
• Stockton: Stockton is a city in the San Joaquin Valley and offers a relatively affordable housing market. It has a variety of mortgage options, including government-backed loans and low down payment programs. COLI: 122.6.
• Modesto: Modesto is a city in the Central Valley and offers a low cost of living compared to other parts of California. It has a variety of mortgage options, including government-backed loans and low down payment programs. COLI: 117.7.
Most Expensive Locations
• San Francisco: San Francisco is consistently ranked as one of the most expensive cities in the U.S. and has a high cost of living. COLI: 169.6.
• Los Angeles: Los Angeles is another major metropolitan area with a high cost of living. COLI: 150.6.
• San Diego: San Diego is known for its beautiful weather and high quality of life, which contributes to its high cost of living. COLI: 144.2.
• Santa Barbara: Santa Barbara is a coastal city known for its beautiful scenery and mild climate. COLI: 167.
• Palo Alto: Palo Alto is a city in the Silicon Valley and is known for its high concentration of technology companies. COLI: 156.
See what factors impact your mortgage.
See how different loan amounts, down payments, and other factors impact your home mortgage with our mortgage calculator.
See what factors impact your mortgage.
See how different loan amounts, down payments, and other factors impact your home mortgage with our mortgage calculator.
Tips for Securing a Competitive Mortgage Rate in California
Obtaining a competitive mortgage rate is crucial for saving money over the life of a loan. Even half a percentage point can translate to tens of thousands of dollars in interest paid. Here are some tips for securing a competitive mortgage rate in California, from getting preapproved to comparing interest rates and fees:
• Get Preapproved: Getting preapproved for a mortgage strengthens your position as a buyer and allows you to move quickly when you find the right property. It also gives you a better idea of how much you can afford to borrow. The mortgage preapproval process can take up to 10 days.
• Consider a Shorter Loan Term: Shorter loan terms typically come with lower interest rates. If you can afford it, opting for a shorter loan term can save you money in interest over the life of the loan.
• Improve Your Credit Score: A higher credit score can lead to a lower mortgage interest rate. Take steps to improve your credit score, such as paying bills on time and reducing your debt.
• Make a Larger Down Payment: Increasing your down payment can lower your mortgage interest rate. If you can afford it, try to make a down payment of at least 20% to avoid paying private mortgage insurance (PMI).
• Consider Government-Backed Loans: Government-backed loans, such as FHA loans and VA loans, often have lower interest rates than conventional loans. If you qualify for a government-backed loan, it may be a good option for you.
California Mortgage Resources
California offers various resources and programs to assist homebuyers, particularly first-time buyers and those with limited financial resources.
First-Time Homebuyer Programs
The California Housing Finance Agency (CalHFA) offers programs specifically designed to assist those buying their first home. These programs include both conventional and government-backed first mortgages. Buyers must meet income limits and minimum credit score requirements. For additional information on the below programs, visit our California First-Time Home Buying Assistance page.
Down Payment Assistance
California’s MyHome program provides qualified borrowers with down payment assistance. Homebuyers with government-backed mortgages can apply for a junior loan of up to 3.5% of the home purchase price to cover down payment and closing costs. Payments are deferred until you sell, refinance, or pay off your mortgage.
Tools & Calculators
SoFi provides online tools and calculators to help homebuyers estimate their monthly mortgage payments, see how much home they can afford, and look ahead to their ultimate mortgage payoff date. These resources can empower homebuyers to make informed decisions throughout the homebuying process.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Refinancing Options in California
Homeowners in California may also consider refinancing their mortgage to secure a lower interest rate or access cash for other financial needs. Mortgage refinance options in California include:
• FHA Streamline Refinance: The FHA Streamline Refinance allows FHA-insured homeowners to refinance into current mortgage rates with minimal hassle.
• VA Interest-Rate Reduction Refinance Loan: An IRRRL can reduce the monthly payments on VA loans by adjusting the APR.
• Conventional Refinance: Conventional refinance loans are available to homeowners who do not have FHA or VA loans. Conventional refinance loans may offer lower interest rates and flexible terms.
Closing Costs, Taxes, and Fees in California
When purchasing a home in California, buyers can expect to pay various closing costs, taxes, and fees. These costs typically range between 2% and 5% of the home’s purchase price and may include:
Closing costs can include any or all of the following:
• Loan Origination Fee: A fee charged by the lender for processing the mortgage application.
• Appraisal Fee: A fee paid to an appraiser to determine the value of the home.
• Credit Report Fee: A fee paid to a credit bureau for obtaining the borrower’s credit report.
• Title Insurance: Insurance that protects the lender against any claims on the title to the property.
• Recording Fee: A fee paid to the county recorder for recording the mortgage documents.
• Transfer Tax: A tax paid to the state or county when the property is transferred from the seller to the buyer.
• Homeowners Insurance: Insurance that protects the homeowner against damage to the property.
• Property Taxes: Taxes paid to the local government based on the assessed value of the property.
Factors influencing closing costs in California include property value and location. It’s important for homebuyers to carefully review the closing disclosure provided by the lender to understand all associated costs and fees.
The Takeaway
California’s mortgage landscape offers a range of options for homebuyers. By staying informed about current mortgage rates, exploring assistance programs, and carefully considering refinancing options, individuals can make strategic decisions that align with their financial goals and achieve successful homeownership in California.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
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*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.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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