Current Home Equity Loan Rates in Tucson, AZ Today
TUCSON HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Tucson, AZ.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Tucson.
Key Points
• In Tucson, the rates for home equity loans are typically influenced by the prime rate, your credit score, and your debt-to-income ratio.
• Shopping around and comparing offers from multiple lenders can help you get the best rate.
• If you have a credit score of 700+ and a DTI under 36%, you’re likely to have access to more competitive rates and terms.
• The interest on home equity loans may be tax-deductible.
• Home equity loans usually come with fixed interest rates, ensuring that payments will be predictable.
Introduction to Home Equity Loan Rates
If you own your home, a home equity loan can be a powerful financial resource. In this article, we’ll explore how. First things first: What is a home equity loan? It’s a way you can leverage the equity you’ve built up in your home to access a lump sum, usually at a fixed interest rate.
This is your comprehensive guide to home equity loan rates in Tucson, AZ. We’ll delve into how these rates are determined by a mix of economic and personal financial factors. We’ll also explore the potential benefits and pitfalls of different types of home equity loans, including home equity lines of credit (HELOCs) and cash-out refinances, and provide you with practical tips to secure the most favorable rates. Whether you’re planning a major home makeover, trying to streamline your debt, or have your sights set on a significant purchase, understanding home equity loan rates will empower you to make the right financial choice for you.
How Do Home Equity Loans Work?
A home equity loan is essentially a second home mortgage. It draws on the value you already own in your home and allows you to borrow a lump sum of money, which you can use for a variety of purposes.
After you’ve received your funds, you pay back your home equity loan in monthly installments over a period of five to 30 years, depending on the term of your loan. Your home secures the loan, so the interest rate is generally lower than you’d find with an unsecured personal loan. Most home equity loan interest rates are fixed, meaning that your monthly payments will stay the same throughout the life of the loan.
If you’re wondering how to get equity out of your home, home equity loans can be a great option. To qualify for a home equity loan, you’ll typically need to have at least 20% equity in your home. In other words, your mortgage balance should be no more than 80% of your home’s market value.
Where Do Home Equity Loan Rates Come From?
The interest rate on your home equity loan is determined by a variety of factors, including economic conditions and your personal financial situation. The Federal Reserve’s changes to the federal funds rate affect the prime rate, which affects home equity loan rates. For instance, if the prime rate increases, you can expect rates for home equity loans to rise as well.
Your personal credit score and debt-to-income ratio are also key factors in determining the interest rate you will be offered. Additionally, the amount of the loan and the repayment term can influence the rate, with larger loans and longer terms sometimes resulting in a higher rate due to increased risk to the lender.
How Interest Rates Impact Home Equity Loan Affordability
Your interest rate is a pivotal factor in the overall affordability of a home equity loan. Even a seemingly small difference in rates can have a significant impact on your finances. Let’s say you’re considering a $100,000 home equity loan with a 15-year repayment term. At an 8.50% interest rate, your monthly payment would be approximately $986, with total interest over the loan’s life amounting to $77,253.
But if that rate were just one percentage point higher, at 9.50%, your monthly payment would increase to around $1,044, and the total interest paid would rise to about $87,960. That’s more than $10,700 over the loan’s life if you get the higher rate.
The chart below illustrates how changes in your loan amount, interest rate, and term interact to result in different monthly payments.
| Loan Amount | Loan Term | Interest Rate | Monthly Payment |
|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 |
| 7.00% | $775 | ||
| 10 years | 8.00% | $1,213 | |
| 7.00% | $1,161 | ||
| $50,000 | 20 years | 8.00% | $418 |
| 7.00% | $388 | ||
| 10 years | 8.00% | $607 | |
| 7.00% | $581 | ||
| $25,000 | 20 years | 8.00% | $209 |
| 7.00% | $194 | ||
| 10 years | 8.00% | $303 | |
| 7.00% | $290 |
Fixed vs Adjustable Interest Rates
Home equity loans most often come with fixed interest rates. A chief benefit of this is that your monthly payments will remain the same throughout the entire duration of your loan.
Other kinds of loans, including HELOCs, typically have adjustable rates, which start out with a fixed rate for a set period and then adjust in accordance with the market. Fixed rates might be a touch higher than adjustable ones at the start, but they provide a predictability that can be reassuring as you plan your monthly and yearly budget. On the other hand, adjustable rates do often kick off at a lower rate, but during their adjustable stage, they are subject to market shifts, which could end up costing you more in the long run.
As you’re comparing home equity loan rates, think about how important stability is to you versus the potential for lower initial costs with adjustable rates.
Home Equity Loan Rate Trends
Predicting future trends in interest rates is tricky at best — there are an enormous number of factors at play. Let’s look at the prime rate, a major factor in home equity loan interest rates. Its recent history demonstrates just how variable it is. As you can see in the chart below, it plummeted to 3.25% in March of 2020 and soared to 8.50% in July, 2023.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
Fluctuations like these have an immediate impact on home equity loan rates in Tucson, making it crucial to stay on top of current market conditions. While nobody can predict the future with absolute certainty, understanding past patterns may help you time your application to get a more favorable rate.
How to Qualify for the Lowest Rates
To secure the most favorable home equity loan rates, your financial game plan needs to be solid. Here’s what lenders are looking for: a credit score of 700 or higher, and a debt-to-income (DTI) ratio no more than 50% (or better yet, 36% or less).
Even if you haven’t decided yet on a HELOC vs. a home equity loan, the tactics are the same to get yourself in shape to secure the most competitive interest rates and loan terms.
Maintain Sufficient Home Equity
To be eligible for a home equity loan, you need to maintain at least 20% equity in your home. Calculating your equity is easy: Simply subtract your current mortgage balance from your home’s appraised value. For example, if your mortgage balance is $400,000 and your home is valued at $550,000, your equity is $150,000.
The amount of equity you have is important, since it determines the maximum loan amount you can get and the rate you can secure. Most lenders let you borrow as much as 85%, or sometimes 90%, of your available equity. In the example above, that translates to a loan of up to $135,000. A home equity loan calculator can help you evaluate exactly how large a loan you may be able to access.
Build a Strong Credit Score
To help you get the most favorable home equity loan rates, you’ll want a credit score of 680 or higher, with many lenders favoring a robust 700+. A solid credit score bears witness to your past financial prudence and can open doors to more attractive loan terms.
Looking at your credit report, lenders typically take into account your payment history, credit usage, and the length of your credit history when assessing your creditworthiness. By consistently paying your bills on time and keeping your credit card balances in check, you can maintain or even increase your score’s health. Regularly reviewing your credit report for any inaccuracies and disputing them if necessary can also be prudent.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a critical factor in qualifying for a home equity loan. This ratio compares your monthly income to your monthly debt obligations, including the proposed home equity loan payment. Lenders generally require a DTI ratio below 50%, and ideally below 36%.
Improving your DTI involves paying down your existing debts, increasing your income, or both.
A lower DTI ratio demonstrates that you have managed debt well and that you can afford the loan you’re asking for. It can help your chances of securing a home equity loan and may also help you qualify for better home equity loan rates.
Obtain Adequate Property Insurance
Property insurance is a must-have for home equity loans, especially if you’re in an area that’s at risk for natural disasters, like floods. Lenders need to know that the property securing the loan is well-protected. Having the right insurance can also save you from extra costs and worries if the unexpected occurs.
When you’re ready to apply for a home equity loan, make sure you have all the necessary documentation to show that your house is fully insured. Not only does this protect your investment, but it also keeps you in good standing with your lender, which could help you secure more attractive home equity loan rates.
Tools & Calculators
Online tools and calculators can help you estimate loan amounts and monthly payments based on your home’s equity, your credit score, and other financial factors. They can also help you see how different interest rates and loan terms can impact your monthly payments. By inputting your specific details, you can make more informed decisions and choose the home equity loan that best fits your needs.
Run the numbers on your home equity loan.
-
Home Equity Loan
CalculatorEnter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment
CalculatorPunch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
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.
Closing Costs and Fees
Home equity loan closing costs usually cost between 2% and 5% of the loan amount, so it’s smart to remember them as you plan your loan.
These costs can include a variety of expenses, such as appraisals, credit reports, document preparation, loan origination fees, notary fees, and the costs associated with title searches and insurance. Here are some typical prices:
• Appraisal fee: $300-$500
• Credit report fee: $30-$50 or more
• Document preparation: $100-$500 (may also be billed on an hourly basis if an attorney is involved or be built into the loan origination fee)
• Loan origination fee: 0.5%-1.0% of the loan amount
• Notary fee: $20-$100
• Title insurance fee: 0.5%-1.0% of the loan amount
• Title search fee: $75-$250 or more
While no-closing-cost home equity loans are sometimes an option, they often come with higher interest rates.
Tax Deductibility of Home Equity Loan Interest
There’s another benefit of home equity loans to consider.
If you’re taking out the loan in order to improve your home, the interest on your home equity loan may be tax deductible. For single filers, interest is deductible on the first $375,000 of loan debt. Spouses filing together can deduct the interest on up to $750,000 of debt. But remember that you’ll need to itemize if you want to claim this deduction.
Currently, this tax break runs through 2025. It may be extended beyond that, though, so consult your tax advisor to get the most up-to-date information and advice.
Alternatives to Home Equity Loans
Although home equity loans are a popular choice, there are other options to consider if you’re in a position to draw on your home equity. A home equity line of credit (HELOC) is a flexible solution that offers a revolving line of credit with variable interest rates. Another alternative is a cash-out refinance. It’s a kind of mortgage refinance that allows you to replace your current mortgage with a new one that has a higher balance.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC is like a credit card, but with the substantial backing of your home equity. It offers a flexible way to borrow funds up to a set limit, with interest charged only on the amount you use. HELOCs do typically come with variable interest rates, which can be challenging to work into your budget.
Lenders generally look for a credit score of 680 or higher (700+ is even better) and a debt-to-income ratio below 50% (though less than 36% is the sweet spot). If you’re comfortable with the ebb and flow of variable rates, a HELOC could be a good choice, allowing you to borrow up to 90% of your home equity.
To figure out how much monthly payments for a HELOC would be, consider using a HELOC monthly payment calculator. And to calculate how much interest you pay during the “draw” period of a HELOC, try a HELOC interest-only calcuclator.
Cash-Out Refinance
A cash-out refinance can also be a strategic way to access a chunk of your home’s equity. You replace your existing mortgage with a new home loan that’s larger than what you owe, and pocket the difference as a lump sum.
If you’re considering the benefits of a cash-out refinance vs. a home equity line of credit, take into account the fact that requirements for borrowing tend to be different. It’s usually easier to qualify for a cash-out refi than for a home equity loan or a HELOC. Cash-out refinances typically require a minimum credit score of 620 and a DTI ratio of 43% or less. They may have either fixed or variable interest rates, with variable rates sometimes offering more equity access. One more plus: a cash-out refi results in a single monthly payment, which can make it easier to manage.
The Takeaway
When you’re ready to explore home equity loans in Tucson, it’s important to have a strong credit score, a manageable debt-to-income ratio, and adequate property insurance, as these factors can affect the rates you’re offered. Online tools and calculators can help you estimate your payments and loan amounts. Be sure to consider the closing costs and fees, so you can budget for the total cost of the loan. And don’t forget to weigh the pros and cons of other options, like HELOCs and cash-out refinances, to find the right option for you.
SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What can you do with a home equity loan?
Home equity loans can be a great way to finance big expenses, like home renovations, medical bills, or college tuition. You might also use a home equity loan to consolidate high-interest debt. The loan is disbursed as a lump sum, which you can repay with fixed monthly payments over a set term. Before you apply for a home equity loan, it’s wise to consider your financial goals and the potential risks of borrowing against your home.
What’s the monthly payment on a $30,000 home equity loan?
The monthly payment you can expect for a $30,000 home equity loan will vary depending on the interest rate and term you choose. For example, a 7.00% interest rate over a 15-year term would mean a payment of about $270 per month. If you get an 8.00% interest rate and a 20-year term, the monthly payment would be around $251. A home equity loan calculator can give you more results for different loan terms and rates.
What might prevent you from securing a home equity loan?
Several factors could stand in the way of your securing a home equity loan. For starters, lenders generally look for a minimum credit score of 700 for the most competitive rates, so a low credit score could be a problem. A high debt-to-income ratio, typically more than 50%, could also be a red flag. And of course, you’ll need to have a healthy amount of home equity, usually at least 20%. If you can, it’s a good idea to take some time to evaluate your financial picture, work on your credit score, and manage your debts before applying.
What are the benefits of a home equity loan?
Home equity loans offer a number of benefits, including a lump sum of cash and payments that usually come with a fixed interest rate, which means that your monthly payments always stay the same. These loans can work well for large, one-time expenses such as home renovations or high-interest debt consolidation. Additionally, home equity loan rates are generally lower than those of unsecured loans, making them a cost-effective option when you need money. However, it’s important to remember that these loans come with the possibility of foreclosure if you don’t make your payments.
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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.
*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.
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All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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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.
SOHL-Q225-277
More home equity resources.
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What is a Home Equity Line of Credit
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Different Types of Home Equity Loans
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HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Current Home Equity Loan Rates in Winston-Salem, NC Today
WINSTON-SALEM HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Winston-Salem, NC.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Winston-Salem.
Key Points
• Home equity loan rates in Winston-Salem, North Carolina, are influenced by a variety of factors, including broad economic trends and the individual borrower’s financial standing,
• A fixed interest rate gives you the stability of predictable monthly payments.
• Home equity loans do carry risks, such as the possibility of foreclosure if you can’t make your payments.
• To get a good home equity loan rate, it helps to have a strong credit score and a low debt-to-income ratio.
• Comparing offers from several lenders will help you find the best terms available to you.
Introduction to Home Equity Loan Rates
Our guide to Winston-Salem home equity loan rates offers a thorough look at what you can expect when you’re looking for your best options for a home equity loan.
We’ll delve into the factors that play a role in determining these rates, from Federal Reserve policy to your credit score and the amount you want to borrow. You’ll also learn how to effectively compare offers from different lenders and what steps you can take to secure the most favorable rates. And you’ll find out about different types of home equity loans, like HELOCs and cash-out refis, so you can decide which one best fits your needs.
Whether you’re dreaming of home improvements, planning for your child’s education, or considering debt consolidation, being well-informed about your financial options and how to make the most of them is key to taking control of your future.
How Do Home Equity Loans Work?
What is a home equity loan? Simply put, it’s a way you can borrow money and secure your loan with the equity you’ve built up in your home. The amount of equity you have is the market value of your home minus the balance of your existing mortgage.
For instance, if your home is valued at $500,000 and you owe $350,000 on your mortgage, you have $150,000 in equity.
Lenders generally let you borrow up to 85%, or sometimes 90%, of your home equity. In this example, you might be able to borrow as much as $135,000.
A home equity loan calculator can help you determine your home equity and maximum loan amount in other scenarios.
Home equity loan rates are usually fixed and the loan term can be anywhere from five to 30 years. Because the loan is secured by your home, home equity loan rates are usually lower than rates for unsecured personal loans. If you’ve been wondering how to get equity out of your home, a home equity loan could be a good answer.
What Determines Home Equity Loan Interest Rates?
Interest rates for home equity loans are influenced by a variety of factors, including larger economic trends and the details of your own personal financial situation.
One of the most important factors is the Federal Reserve’s monetary policy, which includes changes to the federal funds rate. Lenders typically base their home equity loan rates on the prime rate, which is influenced by the federal funds rate, so if the funds rate and prime rate rise, typically you can expect to see home equity loan rates in Winston-Salem rise, too.
In terms of your personal finances, other factors that can impact your home equity loan rate include your credit score and your debt-to-income ratio (how much monthly debt you have compared to your monthly income). Additionally, the amount you borrow and the repayment term you choose can also affect your rate.
How Interest Rates Impact Affordability
The rates you secure for your home equity loan play a pivotal role in how affordable the loan will be for you over the long term. Even a seemingly small difference in interest rates can lead to significant savings or added costs over the life of the loan.
For instance, consider a $100,000 home equity loan with a 15-year repayment term. With a 8.50% interest rate, you’re looking at a $986 monthly payment and a total interest cost of $77,253. But if your interest rate is just one percentage point higher, at 9.50%, your monthly payment jumps to $1,044, and the total interest paid rises to $87,960. That’s a difference of more than $10,700 in interest over the loan’s life, which underscores the importance of hunting down the best home equity loan rates.
The chart below illustrates further how changes in your loan amount, interest rate, and term interact to result in different monthly payments.
| Loan Amount | Loan Term | Interest Rate | Monthly Payment |
|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 |
| 7.00% | $775 | ||
| 10 years | 8.00% | $1,213 | |
| 7.00% | $1,161 | ||
| $50,000 | 20 years | 8.00% | $418 |
| 7.00% | $388 | ||
| 10 years | 8.00% | $607 | |
| 7.00% | $581 | ||
| $25,000 | 20 years | 8.00% | $209 |
| 7.00% | $194 | ||
| 10 years | 8.00% | $303 | |
| 7.00% | $290 |
Fixed vs Adjustable Interest Rates
Home equity loans typically come with fixed interest rates, though they can occasionally have adjustable rates. Fixed interest rates offer a consistent monthly payment every time. That stability can help make budgeting a more straightforward task.
Other kinds of loans, including HELOCs, more typically have adjustable rates, which start out with a fixed rate for a defined period, and then adjust in accordance with the market. Once they start adjusting, the rates and payments can feel unpredictable.
If you’re deciding what kind of rate is right for you, think about how flexible your budget is likely to be in future years and also what your tolerance for risk and unpredictability is.
Home Equity Loan Rate Trends
Predicting what interest rates may be coming down the road is tricky at best — an enormous number of factors come into play to determine the trends. Still, there are some indicators that can be helpful.
Let’s take a look at the prime rate, which, as we’ve discussed, is a major factor in home equity loan interest rates. Its recent history shows just how variable the prime rate is. As you can see from the chart below, it plummeted to 3.25% in 2020 and rose to 8.50% in 2023.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
Fluctuations like these have an impact on Winston-Salem home equity loan rates, so it’s a good idea to stay on top of current market conditions. While nobody can predict the future with perfect accuracy, understanding past patterns as well as today’s trends may help you time your application to get a more favorable rate.
How to Qualify for the Lowest Rates
To be offered the most favorable home equity loan rates, you’ll need to meet your lender’s requirements, like an appropriate credit score and debt-to-income (DTI) ratio.
Here’s what lenders are generally looking for: a credit score of 700 or higher, a DTI ratio of no more than 50% (or better yet, 36% or less), and a combined loan-to-value ratio (what you’ll owe divided by the value of your home) that doesn’t top 80%.
Even if you haven’t decided yet on a HELOC vs. a home equity loan or maybe even a cash-out refinance, the strategies below can help you get your financial profile in shape to secure the most favorable interest rates and loan terms.
Maintain Sufficient Home Equity
Generally, you need to have at least 20% equity in your home to qualify for a home equity loan. Don’t know how much equity you have? Calculating it is easy. Just subtract your mortgage balance from your current home value. For example, if your mortgage balance is $400,000 and your home is now worth $550,000, you’ve got $150,000 in equity.
The amount of equity you have helps determine the maximum loan amount you can get and the rates you can secure. Most lenders let you borrow as much as 85%, or sometimes 90%, of your available equity. In the example above, that translates to a loan of up to $135,000.
A home equity loan calculator can help you evaluate exactly how large a loan you may be able to access.
Build a Strong Credit Score
For the most favorable home equity loan rates, you’ll probably need a credit score of 680 or higher. Many lenders are looking for 700 or above. The higher your score is, the greater the level of financial responsibility it signals. You can bolster your credit record by consistently making timely payments, keeping credit card balances in check, and not taking on major new debts.
Manage Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a critical factor when it comes to securing a home equity loan. Lenders generally look for a DTI ratio that’s under 50%, but the sweet spot is often 36% or lower. You can estimate your DTI ratio with a simple calculation: your total monthly debt payments divided by your gross monthly income.
A lower DTI ratio shows a lender that you’re in a better position to handle your monthly payments, and that reassurance can potentially lead them to offer you more attractive loan rates. To improve your DTI, work on paying down some of your existing debts, finding ways to boost your income, or a combination of both. A well-managed DTI could be the key to unlocking a home equity loan with favorable terms and lower interest rates.
Obtain Adequate Property Insurance
Property insurance is often a prerequisite for home equity loans, especially in areas susceptible to natural disasters. Sufficient insurance can save you from additional costs and complications if the unexpected occurs, of course. But it’s important for a home equity loan because lenders want to ensure that the property securing the loan is safeguarded against potential damage.
When you’re applying for a home equity loan, be ready to provide proof of insurance. This might include a policy covering the full value of your home and any additional coverage stipulated by the lender. Having the right insurance can also empower you to negotiate better rates and terms for your home equity loan.
Tools & Calculators
When it comes to making decisions about home equity loans, online tools and calculators are your best friends. A home equity loan calculator can give you a sense of your monthly payments based on the loan amount, interest rate, and term.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
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.
Closing Costs and Fees
When it comes to making decisions about home equity loans, online tools and calculators are your best friends. A home equity loan calculator can give you a sense of your monthly payments based on the loan amount, interest rate, and term.
These costs can include a variety of different expenses, including home appraisals, credit reports, document preparation, loan origination fees, notary fees, and the costs associated with title searches and insurance. Here are some typical line items:
• Appraisal fee: $300-$500
• Credit report fee: $30-$50 or more
• Document preparation: $100-$500 (may also be billed on an hourly basis if an attorney is involved or be built into the loan origination fee)
• Loan origination fee: 0.5%-1.0% of the loan amount
• Notary fee: $20-$100
• Title insurance fee: 0.5%-1.0% of the loan amount
• Title search fee: $75-$250 or more
Some lenders may offer no-closing-cost home equity loans, but they often come with higher interest rates.
Tax Deductibility of Home Equity Loan Interest
If you’re considering a home equity loan, there may be another factor to consider. If you’re taking out the loan in order to improve your home, the interest on your home equity loan may be tax deductible. For single filers, interest is deductible on the first $375,000 of loan debt. Spouses filing together can deduct the interest on up to $750,000 of debt. But remember that you can’t take the standard deduction if you want to claim this – you’ll need to itemize. Consult your tax advisor to get the most up-to-date information and advice.
Alternatives to Home Equity Loans
Home equity loans are a popular choice among homeowners, but there are other options to consider if you’re in a position to draw on your home equity, and they’re worth considering to see if they’ll better meet your financial needs.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC is somewhat like a credit card, but it’s backed by the equity you have in your home. It provides a flexible way to borrow funds up to a set limit, and interest payments are typically required only on the amount you withdraw. You generally start off with a “draw” period, during which you can borrow funds as needed. Following that is a period of years during which you pay back the principal you’ve borrowed plus interest. HELOCs usually come with variable interest rates, which can feel unpredictable, especially if you’re on a strict budget.
Lenders generally want to see a credit score of 680 or higher (700 is even better) and a debt-to-income ratio below 50% (though less than 36% is the sweet spot) when they’re evaluating a candidate for a HELOC . If you’re comfortable with the ebb and flow of variable rates, a HELOC could be a good choice, allowing you to borrow up to 90% of your home equity.
To figure out how much monthly payments for a HELOC would be, consider using a HELOC monthly payment calculator. And to calculate how much interest you pay during the “draw” period of a HELOC, try a HELOC interest-only calcuclator.
Cash-Out Refinance
This is a kind of mortgage refinance that allows you to replace your existing mortgage with a new home loan that has a higher balance.
If you’re considering the benefits of a cash-out refinance vs. a home equity line of credit, take into account the fact that requirements for borrowing tend to be different. It’s usually easier to qualify for a cash-out refi than for a home equity loan or a HELOC. Cash-out refinances typically require a minimum credit score of 620 and a DTI ratio of 43% or less. They may have either fixed or variable interest rates. One more advantage: a cash-out refi results in a single monthly payment, which can make it easier to manage.
The Takeaway
When you’re ready to pursue a home equity loan in Winston-Salem, remember to focus on preparing those key factors: your credit score, debt-to-income ratio, and property insurance. These will all play a part in influencing the rates you’re offered. Use the tools at your disposal to estimate payments and compare lenders. Understanding how the different types of home equity financing work and what affects their interest rates will help you find the best options and arrive at the right financial decision for you.
SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What are the common uses for a home equity loan?
Home equity loans are often used to pay for big-ticket items, to make home improvements, or to consolidate higher-interest debt. These loans provide a way to access a substantial lump sum and pay the funds back over time. If you’re considering a home equity loan, be sure to weigh the benefits against the potential risks, like the possibility of foreclosure if you can’t make your payments.
Wondering about the monthly payments on a $50,000 home equity loan?
The monthly payment you’d see for a $30,000 home equity loan varies depending on your loan term and interest rate. A 7.00% interest rate over a 15-year term yields a payment of about $271 per month. If you get an 8.00% interest rate and a 20-year term, the monthly payment would be around $251. A home equity loan calculator can give you estimates customized to your situation.
So, what’s the monthly payment on a $25,000 home equity loan?
The payment on a $25,000 home equity loan will vary, depending on the interest rate and the term of the loan. For example, at an 8.00% interest rate over a 15-year term, the monthly payment would be approximately $239. If the interest rate is 9.00%, the monthly payment increases to about $254.
What might prevent you from qualifying for a home equity loan?
There are a few potential roadblocks to securing a home equity loan. For starters, lenders generally look for a minimum credit score of 700 for the most competitive rates, so a low credit score can be a red flag for lenders. A high debt-to-income ratio, generally more than 50%, may also create a problem. And of course, you’ll need to have a healthy amount of home equity, usually at least 20%. If you can, it’s a good idea to take some time to evaluate your financial picture, work on your credit score, and manage your debts before applying.
What are the advantages of a home equity loan?
Home equity loans have a number of advantages for homeowners. They typically come with fixed interest rates and therefore have predictable monthly payments. Because the loan is secured by your home, the interest rates are often lower than those for unsecured loans, such as credit cards or personal loans. This can be particularly helpful if you’re consolidating high-interest debt or financing a large expense.
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.
*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.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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.
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.
SOHL-Q225-275
More home equity resources.
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What is a Home Equity Line of Credit
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Different Types of Home Equity Loans
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HELOC vs Home Equity Loan: How They Compare
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New Jersey First-Time Home Buying Assistance Programs & Grants for 2025
New Jersey First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
The Garden State saw record real estate sales in the pandemic years as New York City dwellers fled to the suburbs. The market slowed after 2022, but in the year ending June 2025, home prices in New Jersey still continued to rise. Although the increase was less than in previous years, they increased 5.3% over the prior year, and the median sales price was $560,200. On average, the number of homes sold was down 2.3% year over year, and the median days on the market stayed steady at 32.
In New Jersey that translates into one of the country’s toughest markets for first-time homebuyers. All the more reason to explore programs that can help those who need help covering the cost of a home.
That translates into New Jersey being one of the country’s toughest markets for first-time homebuyers. All the more reason to explore programs that can help those who need help covering the cost of a home.
5 New Jersey Programs for First-Time Homebuyers
To help first-time homebuyers break into this expensive market, the New Jersey Housing and Mortgage Finance Agency (NJHMFA) offers a handful of statewide programs with competitive rates, down payment assistance, and relatively generous income and price limits. In addition, because many areas of New Jersey have robust real estate and first-time homebuyer markets — such as Jersey City and many of the seaside towns — borrowers will want to check for programs in the specific county or city they are considering. Not sure where you want to live in New Jersey? Explore a list of the state’s best, most affordable towns.
Here’s a closer look at the finance agency programs for first-time homebuyers looking for home mortgage loans and down payment assistance.
1. First-Time Homebuyer Mortgage Program
This program offers first-time homebuyers (meaning you haven’t owned a home in the past three years) government-backed 30-year fixed-rate mortgages at competitive interest rates. The loans can be combined with New Jersey’s down payment assistance program by prospective homeowners in the state.
Veterans and buyers in certain target areas need not be first-time homebuyers, but they must not own another primary residence at closing.
To qualify, first-time homebuyers must meet credit score and debt-to-income ratio requirements, which vary by location, and meet income and purchase price limits. The limits are set based on the number of people in your household and the location of the property you want to buy, but generally your income may not exceed 115% of the area median income. Price limits can be higher for houses in certain designated areas. In all cases, the property may be a single-family home, condominium, townhome, manufactured or mobile home, or a two- to four-unit dwelling where one unit is the principal residence of the borrower. See all the details in this fact sheet .
2. HFA Advantage Mortgage Program
Similar to the program above, this one provides homebuyers with a 30-year, fixed-rate conventional loan, affordable mortgage insurance, and low down payment requirements that can be coupled with NJHMFA down payment assistance. For buyers not using the agency’s down payment assistance, the first-time qualification may be waived, although there are income limits for borrowers that vary by county. Single-family homes, condominiums, townhomes, and planned unit developments are allowed.
Income limits for these loans are lower than for the First-Time Homebuyer Mortgage; income may not exceed 80% of the area median income. Learn more in this fact sheet .
3. Police and Firemen’s Retirement System Mortgage Program
New Jersey police officers, firefighters, and members of the Police and Firemen’s Retirement System may be eligible for a 30-year fixed-rate loan with competitive rates up to $766,550. Rates are set twice a year in February and August and are based on the 10-year Treasury bill plus 1%.
One- or two-family homes are allowed, as well as condos or land to build a home on, as long as it will be your primary residence. Lender and administrative fees apply. A 25% portion of the funds for this program is reserved for first-time homebuyers. Repeat buyers are also welcome. This fact sheet offers full details.
4. Homeward Bound Program
Like many of the other programs, Homeward Bound offers first-time homeowners a competitive 30-year fixed-rate government-insured loan that can be paired with New Jersey’s down payment assistance program.
The property must be the borrower’s primary residence and must be occupied within 60 days of closing. There are credit score and debt-to income requirements, which vary by purchase and lender. Income limits vary by location but may not exceed 140% of the area median income. In certain target areas, one need not be a first-time homebuyer to qualify, according to the fact sheet .
5. New Jersey Down Payment Assistance Program
Down payment assistance is available for prospective homebuyers who have qualified for any of the NJHMFA loans above. Residents may qualify for up to $15,000 to use toward a down payment or closing costs.
This is a five-year forgivable second mortgage. No interest is charged on the loan, and borrowers do not have to make monthly payments. Income restrictions and purchase price limits apply and vary by location.
Who Is Considered a First-Time Homebuyer in New Jersey?
NJHMFA defines a first-time homebuyer as someone who has not owned a primary residence in the past three years. For some of the agency programs, buyers in a targeted area or veterans may be repeat buyers as long as they do not currently own another primary residence.
Recommended: First-Time Homebuyer Guide
How to Apply to New Jersey Programs for First-Time Homebuyers
NJHMFA is not a lender, but it provides detailed information about each of the programs above, including location, price and income limits, and credit score requirements. The website also provides a list of approved lenders.
It’s especially important for first-time buyers, who may be unfamiliar with the mortgage borrowing process, to compare interest rates, fees, and terms among several lenders to make sure they’re getting the most affordable loan available.
It’s also a good idea to learn about mortgage insurance and guarantee fees.
Recommended: Understanding the Different Types of Mortgage Loans
Federal Programs for First-Time Homebuyers
Several federal government programs are designed for people who have low credit scores or limited cash to make a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.
The mortgages are usually for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.
Federal Housing Administration (FHA) Loans
The FHA is part of the U.S. Department of Housing and Urban Development (HUD), which insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders participating in the FHA loan program. Loans offer competitive interest rates and require down payments of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.
FHA loan limits in 2025 range from $524,225 for single units to $1,008,300 for four-unit properties, with limits being higher in the priciest areas.
In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, or your monthly debt payments compared with your monthly gross income). FHA allows a DTI of up to 57%, vs. a typical 45% maximum for conventional loans.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. As of 2025, monthly MIP for new homebuyers is 0.15% to 0.75%. A down payment of at least 10% allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be about $137.
You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.
Freddie Mac Home Possible® Mortgages
Very low- and low-income borrowers may make just a 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.
The Home Possible mortgage is for buyers with a credit score of at least 660. Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments./p>
Fannie Mae HomeReady Mortgages
Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, allowing gifts and grants.
For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site.
Fannie Mae Standard 97 LTV Loan
The conventional 97 LTV loan is for first-time homebuyers of all income levels who have a credit score of 620 or higher and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.
Department of Veterans Affairs (VA) Loans
Active members of the military, veterans, reservists, and surviving spouses who are eligible may apply for loans backed by the Department of Veterans Affairs. VA loans, which can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.
Another VA loan advantage is that they do not require PMI for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.
Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.
Native American Veteran Direct Loans (NADLs)
Native American veterans and their spouses who are eligible may use these no-down-payment mortgages to buy, improve, or build a home on federal trust land. The VA is the mortgage lender on NADLs. The funding fee applies.
US Department of Agriculture (USDA) Loans
No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers will pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.
The USDA also issues direct loans to low- and very low-income people. Check out this USDA website for eligibility requirements.
HUD Good Neighbor Next Door Program
This program gives assistance to teachers, police officers, firefighters, and emergency medical technicians who qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in a HUD “revitalization area.” They must live in the home for at least three years.
HUD offers more information on programs designed for homebuyer affordability in New Jersey on its website .
New Jersey Homebuyer Stats for 2025
Here’s a snapshot of what the New Jersey homebuyer faces:
• Median home sale price in New Jersey: $560,200
• 3% down payment: $16,806
• 20% down payment: $112,040
• Percentage of buyers nationwide who are first-time buyers: 24%
• Median age of first-time homebuyers: 38
• Average credit score (vs. average U.S. score of 715): 724
Additional Financing Tips for First-Time Homebuyers
In addition to federal and state government-sponsored lending programs, other financial strategies may help you as a homebuyer in New Jersey. Some examples:
• Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. A first-time homebuyer, where IRA withdrawals are concerned, is someone who has not owned a principal residence in the last two years. You will still need to pay income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.
• Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason, so long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.
• 401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you’ll be able to borrow up to 50% of your 401(k) balance, up to $50,000, within a 12-month period without incurring any taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.
• State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.
• The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction.
To qualify for this credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh the fees.
• Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.
• Your lender is available to ask about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.
The Takeaway
New Jersey offers a streamlined approach to first-time homebuyer mortgages along with a down payment assistance program. In addition to statewide programs, many localities offer initiatives that can help first-timers break into the New Jersey real estate market. Borrowers throughout the state may also find alternatives among the federal government’s first-time homebuyer programs.
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
Should I take first-time homebuyer classes?
You may have to. First-time homebuyer classes are actually required for some state and government-sponsored loan programs. But even if they aren’t mandatory, they can help demystify the homebuying process for first-timers. Check with your lender, real estate agent, local nonprofit housing advocacy groups, and state housing finance agency for programs in your area.
Do first-time homebuyers with bad credit qualify for homeownership assistance?
Oftentimes they do. Many government and nonprofit homeowner assistance programs are available to people with lower credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications. That’s why it’s important to take all possible steps to improve your credit standing before you go house hunting.
Is there a first-time homebuyer tax credit in New Jersey?
No. New Jersey is not a state that offers the mortgage credit certificate program for first-time homebuyers.
Is there a first-time veteran homebuyer assistance program in New Jersey?
Most NJHMFA first-time buyer programs include veteran benefits. Many local and national programs do not require veterans to be first-time buyers to participate. New Jersey veterans may find options in the federal VA loan programs listed above.
What credit score do I need for first-time homebuyer assistance in New Jersey?
With most New Jersey housing agency programs, the lender determines the required credit score. In some cases, a credit score of 620 is required. But there are other private, state, local, and federal loan programs that borrowers with lower scores may be able to access.
What is the average age of first-time homebuyers?
The average age of a first-time homebuyer has increased to an all-time high of 38, according to data from the National Association of Realtors®.
Photo credit: iStock/Davel5957
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.
*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.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
‡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.
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.
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.
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.
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How Much Will Tariffs Trickle Down to You?
This article appeared in SoFi's On the Money newsletter. Not getting it? Sign up here.
As President Trump imposes broad-based tariffs, U.S. companies that rely on imported products have three choices: a) take the hit to profits, b) stop buying imported goods, or c) raise prices to recoup their costs.
The question is: Which option are they choosing?
First, a basic example: A company sells $10 scarves from China for $20 in the U.S. A 30% tariff on Chinese imports means the scarf suddenly costs the company $13. The choices are:
a) The company pays the $13 and continues charging $20, making $7 in profit instead of $10.
b) To avoid tariffs, the company buys scarves from a U.S. manufacturer (perhaps at a higher price.)
c) The company pays the $13, but passes the extra $3 on to customers, selling its scarves for $23 instead of $20.
So what’s actually happening?
Economists at the New York Federal Reserve surveyed businesses in the New York-Northern New Jersey area in May. About three-quarters of those facing tariff-related cost increases offloaded at least some to consumers. And nearly a third of manufacturers and 45% of companies in service sectors said they fully passed on all tariff-related cost increases by hiking prices.
They didn’t dilly-dally, either: Over half of both manufacturers and service firms said they raised prices within a month of getting hit by tariff cost increases.
Keep in mind that the survey was conducted before tariffs on China were slashed from 145% to 30% and before a trade court ruled that many of Trump’s tariffs were illegal. (Those are still in effect pending an appeal by the Trump administration.)
That’s not to say businesses weren’t anticipating plenty of uncertainty about tariffs, and for good reason. The president has rolled back or temporarily suspended many of the tariffs pending negotiations with the countries in question (a July 9 deadline is looming). And the different types of tariffs — reciprocal, universal, country-specific, import-specific — can be difficult to make sense of.
Case-in-point: Many companies surveyed by the Fed economists couldn’t tell which tariffs they were paying and admitted to not being sure what to do in response.
Of course, some big companies are more easily able to absorb the extra cost of tariffs. And others have more leverage to raise prices based on demand for the thing they’re selling.
In fact, the Atlanta Fed surveyed companies in the Southeast in April about a hypothetical cost increase of 10% or 25% and found that most didn’t think they would be able to pass on all of it to their customers without reducing demand. On average, they anticipated they’d realistically be able to pass on about half of those price increases.
So what? Tariff-related price hikes haven’t really shown up in U.S. inflation data — at least not yet. But if tariffs continue and companies opt to pass them on, you don’t want to be unprepared.
They may not be what inflation-weary Americans were hoping for next, but building up your emergency savings, scrutinizing non-essential spending, and creating a back-up financial plan can help you weather whatever comes next.
Related Reading
The Trump Tariffs Aren’t Causing U.S. Prices to Spike. Here’s Why. (CBS News)
Trump Tariff Tracker (Atlantic Council)
Why Walmart Decided to Say It Would Raise Prices — and Risk Trump’s Fury (CNBC)
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
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Talking About Money May Be Losing Its Taboo Status
This article appeared in SoFi's On the Money newsletter. Not getting it? Sign up here.
Most of us learned it early on: The first rule about money is we don’t talk about money. (Fight Club, anyone?)
It could be construed as rude if you’re telegraphing how much your shoes cost or asking someone how much they make, as Miss Manners herself will tell you.
But experts note that brushing all manner of money-talk under the rug can lead to financial issues and shame.
For example, shying away from talking about finances with your spouse or partner (think: spending habits, debt) could lead to resentment and household budgeting problems — and even contribute to breakups. And when parents don’t teach their kids about money management, they could grow up to make subpar financial decisions.
A Pew Research survey from last year suggests that talking about money significantly contributes to financial literacy: Among American adults who said they are knowledgeable about personal finances, nearly half said they learned a great deal or a fair amount about it from family and friends.
The good news: Attitudes around money-talk are changing as parents embrace financial education, more states adopt pay transparency laws, and social media influencers make it feel normal to share financial details.
Money Talks Are on the Rise
“Money used to be very taboo. But I have noticed young people these days being more open about it, which I actually see as a really good thing,” said Dr. Ashley LeBaron-Black, an Assistant Professor of Family Life at Brigham Young University.
LeBaron-Black said that childrens’ financial literacy improves when parents are open about money. The benefits extend to romantic relationships, too: “Lots of research has shown that the most high quality marriages are when spouses are fully transparent with each other about money.”
Each successive generation is more likely than the last to report discussing money with their friends, according to a January survey by MarketWatch Guides: 64% of Gen Z respondents said they talk about finances with their friends, compared to only 16% of Silent Generation respondents.
Two-thirds of parent respondents in a Fidelity Investments survey from last year said they are discussing finances with their kids. That might not have been the case for previous generations: Over half of adults said they never discussed family finances with their parents while growing up, though 82% wished they had.
“Parents being open about money with their kids is really helpful for children’s financial learning,” said LeBaron-Black.
Another factor contributing to a more open money dialogue: The rise of finance-focused influencers (aka “finfluencers”).
“I’ve been sharing my life online since I was making about $24,000 a year. I currently make $87,000, and I just got a raise,” said Sarah Wilson, who has nearly 100,000 followers on her YouTube channel, Budget Girl. “Talking about money normalizes it… And it helps us trust each other.”
Why Is It So Hard to Talk About Finances?
If money talks, then why is society so hesitant to talk about it?
For one thing, financial literacy wasn’t prioritized when many of us were growing up, so it’s easy to see why broaching financial topics might be uncomfy. You can’t speak French unless someone teaches you, n’est-ce pas?
A lack of financial education can lead to overspending, taking on too much debt, or shying away from investing because you feel you don’t know enough.
Avoiding conversations around salaries can prevent people from boosting their earnings. All of this can create unnecessary shame and trauma. Eventually, that can lead to people avoiding conversations about money entirely (or even ignoring their bank balance).
“When people feel ashamed about something, the natural human tendency is to hide it and not talk about it,” said LeBaron-Black.
People also worry about making others in their social circle uncomfortable if they’re in different financial situations.
Our society places a high — sometimes toxic — value on wealth. It’s easy to conflate net worth with self-worth, and though they are not the same thing, people might shy away from discussing money in an effort to avoid judgement — either because they fear they don’t have as much as others do, or they feel they have more.
How to Break Past the Money Taboo
Conversations about strategies for saving, investing, budgeting, and managing debt tend to boost financial literacy. And knowledge = financial empowerment.
“Money doesn’t reward silence,” said Wilson. “Keeping it taboo is only going to hold you back and keep you poor.”
Here are a few ways to responsibly open up the dialogue:
• Find your circle: The place to be really open about money is with family, particularly with a spouse or partner and children, said LeBaron-Black. Finding a supportive online community is another option, said Wilson, though don’t assume all advice is good advice. Watching how other people discuss money can be a learning experience, too.
• Test the waters: Wilson advises taking a light approach when first broaching a financial topic with someone. “Toss them a couple of softballs. See if they have any advice.” After all, everyone wants to feel like they can help someone.
• Be mindful of your filter: Remember, you’re in control of how much you choose to share — and with whom. LeBaron-Black recommends keeping this in mind when talking with very young children about details you might not want everyone to know.
• Normalize differences: You don’t have to be on the same page every time. “Money is tied to a lot of other deeper things in relationships, like trust, respect, and values,” said LeBaron-Black. Recognizing that everyone has different ideas, financial situations, and expectations can go a long way toward being able to talk about it.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
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