Home Ownership Archives - Hanover Mortgages

February 24, 2021

8 Steps to Buying a Vacation Home

If you’re like many Americans, you dream of having a beach house, a desert escape, or a mountain hideaway. Perhaps you’re tired of staying at hotels and want the comforts of home at your fingertips.

You’re ready to make this dream a reality. Before you do, consider these steps.

How to Buy a Vacation Home

1. Choose a Home That Fits Your Needs

As you begin your search for a vacation home, carefully consider your goals and needs. Start with the location. Do you prefer an urban or rural area? Lots of property or a townhouse with just a small yard to care for?

Consider what amenities are important to be close to. Where is the nearest grocery store? Is a hospital accessible?

Consider your goals for the property. Is this a place that only you and your family will use? Do you plan to rent it out from time to time? Or maybe you plan to be there only a couple of weeks out of the year, using it as a rental property the rest of the time.

The answers to these questions will have a cascade effect on the other factors you’ll need to consider, from financing to taxes and other costs.

2. Figure Out Financing

Next, consider what kind of mortgage works best for you, if you’re not paying cash. You may want to engage a mortgage broker or direct lender to help with this process.

If you have a primary residence, you may be in the market for a second mortgage. The key question: Are you purchasing a second home or an investment property?

Second home. A second home is one that you, family members, or friends plan to live in for a certain period of time every year and not rent it out. Second-home loans have the same rates as primary residences. The down payment could be as low as 10%, though 20% is typical.

Investment property. If you plan on using your vacation home to generate rental income, expect a down payment of 25% or 30% and a higher rate for a non-owner- occupied loan. If you need the rental income in order to qualify for the additional home purchase, you may need to identify a renter and have a lease. A lender still may only consider a percentage of the rental income toward your qualifying income.

Some people may choose to tap equity in their primary home to buy the vacation home. One popular option is a cash-out refinance, in which you borrow more than you owe on your primary home and take the extra money as cash.

3. Consider Costs

While you consider the goals you’re hoping to accomplish by acquiring a vacation home, try to avoid home buying mistakes.

A mortgage lender can delineate the down payment, monthly mortgage payment, and closing costs. But remember that there are other costs to consider, including maintenance of the home and landscape, utilities, furnishings, insurance, property taxes, and travel to and from the home.

If you’re planning on renting out the house, determine frequency and expected rental income. Be prepared to take a financial hit if you are unable to rent the property out as much as you planned. For a full picture of cost, check out our home affordability calculator.

4. Learn About Taxes

Taxes will be an ongoing consideration if you buy a vacation home.

A second home qualifies for mortgage interest and property tax deductions as long as the home is for personal use. And if you rent out the home for 14 or fewer days during the year, you can pocket the rental income tax-free.

If you rent out the home for more than 14 days, you must report all rental income to the IRS. You also can deduct rental expenses.

The mortgage interest deduction is available on total mortgages up to $750,000. If you already have a mortgage equal to the amount you on primary residence, your second home will not qualify.

The bottom line: Tax rules vary greatly, depending on personal or rental use.

5. Research Alternatives

There are a number of options to owning a vacation home. For example, you may consider buying a home with friends or family members, or purchasing a timeshare. But before you pursue an option, carefully weigh the pros and cons.

If you’re considering purchasing a home with other people, beware the potential challenges. Owning a home together requires a lot of compromise and cooperation.

You also must decide what will happen if one party is having trouble paying the mortgage. Are the others willing to cover it?

In addition to second home and investment properties, you may be tempted by timeshares, vacation clubs, fractional ownership, and condo hotels. Be aware that it may be hard to resell these, and the property may not retain its value over time.

6. Make It Easy to Rent

If you do decide to use your vacation home as a rental property, you have to take other people’s concerns and desires into account. Be sure to consider the factors that will make it easy to rent. A home near tourist hot spots, amenities, and a beach or lake may be more desirable.

Consider, too, factors that will make the house less desirable. Is there planned construction nearby that will make it unpleasant to stay at the house?

How far the house is from your main residence takes on increased significance when you’re a rental property owner. Will you have to engage a property manager to maintain the house and address renters’ concerns? Doing so will increase your costs.

7. Pay Attention to Local Rules

Local laws or homeowners association rules may limit who you can rent to and when.

For example, a homeowners association might limit how often you can rent your vacation home, whether renters can have pets, where they can park, and how much noise they can make.

Be aware that these rules can be put in place after you’ve purchased your vacation home.

8. Tap Local Expertise

It’s a good idea to enlist the help of local real estate agents and lenders.

Vacation homes tend to exist in specialized markets, and these experts can help you navigate local taxes, transaction fees, zoning, and rental ordinances. They can also help you determine the best time to buy a house in the area you’re interested in.

Because they are familiar with the local market and comparable properties, they are also likely to be more comfortable with appraisals, especially in low-population areas where there may be fewer houses to compare.

The Takeaway

Buying a vacation home can be a ticket to relaxation or a rough trip. It’s imperative to know the rules governing a second home vs. a rental property, how to finance a vacation house, tax considerations, and more.

Ready to buy? SoFi offers mortgages for second homes and investment properties, including single-family homes, two-unit buildings, condos, and planned unit developments.

SoFi also offers a cash-out refinance, all at competitive rates.

Got two minutes to spare? That’s how long it takes to check your rate for a mortgage with SoFi.

SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.
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.
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.
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.

SOHL21004

Source: sofi.com

February 21, 2021

Cash-Out Refinance vs Home Equity Line of Credit

Cash-out refinances and home equity lines of credit are two borrowing options that allow homeowners to tap into the equity they have built in their home.

A HELOC is a line of credit secured by the borrower’s home. The line of credit can be accessed on an as-needed basis, up to the borrowing limit. The borrower is only charged interest and responsible for repaying the amount they actually borrowed.

For a cash-out refinance, the borrower takes out an entirely new mortgage while borrowing a portion of their existing home equity. The total borrowed amount of the cash out refinance will be greater than the borrower’s original mortgage, and the borrower will receive the difference in a lump sum payment from the lender.

Mortgage Refinancing

Borrowers should keep in mind that a cash-out refinance replaces their current mortgage and even though they receive additional cash they only have to make one monthly payment. Unlike a home equity line of credit, a cash-out refinance may have a fixed interest rate, meaning that the interest rate remains unchanged for the life of the loan so the monthly payments remain the same. Additionally, interest rates are typically lower than with a HELOC.

The approval process for a cash-out refinance is similar to the initial approval process when buying a home. It can be somewhat cumbersome, but the payoff is a lower interest rate, a fixed payment, and access to additional cash.

Which is better: Cash-Out Refinance vs Home Equity Line of Credit?

Like most things in the world of finance, the answer to which option is better will vary by person based on their individual financial circumstances and unique needs. In some situations, a HELOC may make more sense than a cash-out refinance and vice versa.

HELOCs can be useful for shorter-term needs or situations where a borrower may want access to funds over a certain period of time, for example when completing a home renovation. Because HELOCs generally have a variable interest.

Cash-out refinances can make sense if there is a need for a large sum of money or if they can be used as a tool to improve your financial situation on the whole.

Both a home equity line of credit and a cash-out refinance have fees associated with them. With a cash-out refinance, fees are paid upfront in the form of loan closing costs. With a HELOC, several types of fees can be charged periodically such as an annual fee or inactivity fee for non-usage. One way for a borrower to reduce these fees is to shop around and compare lenders.

SoFi.com for details.

MG17110

Source: sofi.com

February 20, 2021

Hereâs How To Refinance A Mortgage (And Know If Itâs Right For You)

Over the past decade, mortgage refinancing has grown in popularity. Not that big of a surprise, considering we’ve seen a sizable drop in mortgage rates during this time. At the height of the housing crisis in 2008, rates averaged about 6% for a 30-year fixed-rate mortgage .

Currently, the average rate for a 30-year fixed mortgage is about 3.26% , which gives some folks the opportunity to save some serious moola by lowering their interest payments. If you signed on for a higher rate years ago or your financial situation has improved, refinancing is worth considering.

Refinancing a mortgage might not be right for every homeowner, but starting to look at rates and terms could be the first step to being able to save for other financial goals. Here’s everything you need to know about refinancing a mortgage from how to start the process, to figuring out if it’s right for you.

How much does it cost to refinance a mortgage?

Since you’re essentially applying for a new loan, there will most likely be fees if you choose to refinance. Because of this, it’s important to consider those costs compared to the potential savings. A good rule of thumb is to be certain you can recoup the cost of the refinance in two to three years—which means you shouldn’t have immediate plans to move.

Refinancing will generally cost from 3% to 6% of your loan’s principal value, though you should be sure to shop around to make sure you’re getting the best deal.

There are helpful online calculators for determining approximate costs for a mortgage refinance. Of course, this is only an estimate and all lenders are different. The lender will provide final closing cost information alongside a quote for your new mortgage rate.
When you refinance, you also have to consider closing costs. Some lenders may not have origination fees, but instead charge the borrower a higher interest rate.

If you have a great borrowing history and a strong financial position, there are some lenders, like SoFi, that reward such borrowers by offering competitive rates and no hidden fees.

What are the steps in the mortgage refinancing process?

The first (and arguably most important) step is to determine what you want to get out of your mortgage loan refinance. There are several mortgage loan types, but “rate and term” and “cash out” are the two most common.

Just as the name implies, a “rate and term” refinance updates the interest rate, the term (or duration) of the loan, or both. You can also switch from an adjustable rate to a fixed rate and vice versa.

It is important to understand that not every refinance will save you money on interest. For example, if you extend the loan terms, you may end up paying more money over the course of your loan.

to boost your credit score. 1
2. Research your home’s approximate value. Check comparable sale prices—not just listing prices—in your neighborhood to get an idea of what your house is worth. If the value of your home has gone up significantly and improves your loan-to-value ratio (LTV), this will be helpful in securing the best refinancing rate.
3. Compare refinance rates online. Don’t forget to ask about all costs involved. Most financial institutions should be able to give you an estimate, but the accuracy can depend on how well you know your credit score and LTV ratio.
4. Get your paperwork together. The process will move faster if you have your pay stubs, bank statements, tax filings, and other pertinent financial information ready to go.
5. Have cash on hand. You may have to pay some up-front costs, like property taxes and insurance.
6. The lender will (mostly) take it from here. They will send an appraiser for a home inspection. After the loan documentation and appraisal are submitted, loan officers determine the interest rate and create the loan closing documents. The closing is then scheduled with the refinancing company, mortgage broker, and real estate attorney.

How long does a mortgage refinance take?

The process can take anywhere from 30 to 90 days, depending on your diligence, the complexity of the loan, and the efficiency of the lender or broker.

If you want the process to move fast, look for mortgage lenders who are looking to disrupt the traditional mortgage process by offering a more streamlined service and a better customer experience.

If you’re like most people, you’ve got a life to live and don’t want your mortgage refinance to drag on for months. Keep this in mind while looking for a lender to refinance with.

Ready to check out your mortgage refinance rates with a competitive lender that values your time? SoFi can give you a quote (that won’t affect your credit score! ²) in as little as two minutes.

1. 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 on credit.
2. To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.

SoFi Lending Corp. is licensed by the Department of Business Oversight under the California Financing Law, license number 6054612. NMLS #1121636.
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 Mortgages not available in all states. Products and terms may vary from those advertised on this site. See SoFi.com for details.

MG18103

Source: sofi.com

February 17, 2021

Price-to-Rent Ratio in 50 Cities

Better to buy or rent? The price-to-rent ratio helps to gauge affordability in any city, especially for people on the move, and millions of Americans are, thanks in part to a remote-work boom.

The number can be helpful when looking at a certain area and deciding whether to plunk down your life savings into a home—if it’s even within reach—or pay a landlord and wait.

Read on to see the home price-to-rent ratio in 50 of the biggest U.S. cities.

First, What Is the Price-to-Rent Ratio?

The price-to-rent ratio compares the median home price and median annual rent in a given area. (You’ll remember that the median is the midpoint, where half the numbers are lower and half are higher.)

Median home sale price divided by median annual rent equals the ratio.

Let’s say the median rent in a city is $3,000 a month and the median sale price is $1,000,000. The price-to-rent ratio would be nearly 28—$1,000,000 divided by $36,000.

To make sense of that number:

•  A ratio of 1 to 15 typically indicates that it is more favorable to buy than rent in a given community.
•  A ratio of 16 to 20 indicates it is typically better to rent than buy.
•  A ratio of 21 or more indicates it is much better to rent than buy.

The ratios could be useful when considering whether to rent or buy. And investors often look at the ratios before purchasing a rental property.

The number also may be used as an indicator of an impending housing bubble, as a substantial increase in the ratio could mean that renting is becoming a much more attractive option in that specific housing market.

If you’re exploring different areas, it might be a good idea to estimate mortgage payments based on median home prices.

A Snapshot of Real-Life Ratios

Here are 50 (plus one) popular metropolitan areas and their price-to-rent ratios as 2021 began, when the U.S. median home sale price was $346,800, the Federal Reserve Bank of St. Louis reported.

Median sale price listed comes from Redfin as of December 2020. Median rents listed come from a Zumper national rent report from February 2021, based on a one-bedroom apartment.

Remember, as home prices and rents shift over time, so do the ratios.

San Francisco

It’s no secret that San Francisco housing prices are way up there. The median sale price was $1,350,000, and median rent was $2,680 per month (or $32,160 a year). That gives the hilly city a price-to-rent ratio of 42.

A snug studio at, say, $2,000 a month yields a ratio of 56.

San Jose, Calif.

Golden State housing continues its pricey rep. The median sale price in San Jose was $1,050,000, and the city had median rent of $25,560 yearly ($2,130 a month), leading to a price-to-rent ratio of 41.

Seattle

The Emerald City had a median sale price of $725,000 and median annual rent of $20,388, for a price-to-rent ratio of close to 39.

Los Angeles

A median sale price of $831,000 and median one-bedroom rent of $23,280 a year ($1,940 a month) shines a Hollywood light on renting, with a ratio of 36.

Long Beach, Calif.

With a median home price of $675,000 and rent of $1,600 a month, Long Beach earned a ratio of 35.

Santa Ana and Anaheim, just north of Santa Ana, were in the same league, with ratios of 33 and 34.

Honolulu

The ratio in the capital of Hawaii is a steamy 35, with a $620,000 median sale price and median rent of $17,520.

Oakland, Calif.

Oakland, across the bay from San Francisco, had a median sale price of $785,000 and median rent of $24,000 a year ($2,000 a month), earning a price-to-rent ratio of close to 33.

Austin, Texas

A hotbed for artists, musicians, and techies, Austin had a price-to-rent ratio of 33, thanks to a median sale price of $475,000 and median annual rent of $14,400.

San Diego

Hop back to Southern California beaches and “America’s Finest City,” where a median sale price of $690,000 and median rent of $21,600 led to a ratio of 32.

New York, NY

The median sale price here was $725,000 and median rent was $28,200 a year ($2,350 a month), which equates to a price-to-rent ratio of nearly 26.

Of course the city is composed of five boroughs, the Bronx, Brooklyn, Manhattan, Queens, and Staten Island, and it’s probable that most of the sales under $725,000 were not in Manhattan (where the median was $1.18 million) or Brooklyn (where the median was $915,000).

Just looking at Manhattan, even with rents falling to under $3,000 a month, the ratio looks more like 34 or 35.

Boston

With a median sale price of $702,000 and median rent of $24,240 a year, Beantown had a price-to-rent ratio of 29.

Portland, Ore.

The midpoint of buying here of late was $485,000, compared with median rent of $16,800, for a price-to-rent ratio of 29.

Tucson, Ariz.

In Tucson, the median sale price of $251,000 and median annual rent of $8,760 rounded up to a ratio of 29.

Denver

The Mile High City logged a renter-leaning ratio of 28, thanks to a median sale price of $476,000 and median annual rent cost of $16,800.

Colorado Springs, Colo.

With a median sale price of $366,000 and annual rent of $13,080, this city at the eastern foot of the Rocky Mountains had a recent price-to-rent ratio of 28.

Albuquerque, N.M.

In the Southwest, Albuquerque heated up to a ratio of 28, based on a median home sale price of $250,000 and rent of $8,880.

Washington, D.C.

The nation’s capital is another pushpin on the map with a high cost of living. The median sale price of $640,650 compares with median rent of $23,520 annually ($1,960 a month), translating to a ratio of 27.

Mesa, Ariz.

With a median sale price of $325,000 and median rent of $12,240, Mesa slithers to a price-to-rent ratio of nearly 27.

Las Vegas

Sin City has reached a ratio of 26, based on a $314,900 median sale price vs. $12,000 in rent.

Phoenix

Phoenix’s price-to-rent ratio has revved up to 26, with a median home sale price of $320,000 and $12,120 in rent.

Raleigh, N.C.

The North Carolina capital, the City of Oaks, logs a ratio of 25, based on a $320,000 median home sale price and median rent of $12,600.

Tulsa, Okla.

Tulsa had a price-to-rent ratio of 25, with low median rent of $7,680 but home sale prices ticking up to a median of $192,000.

Dallas

This sprawling city had a recent median sale price of $374,000 and median annual rent of $14,640, leading to a price-to-rent ratio of 25.5.

Sacramento, Calif.

This Northern California city had a recent median sale price of $402,000 and rent of $16,800, for a price-to-rent ratio of 24.

Fresno, Calif.

Fresno makes the list with a price-to-rent ratio of nearly 23, based on figures of $300,000 and $13,200.

Oklahoma City

The capital of Oklahoma had one of the lower price-to-rent ratios until recent home price spikes. It logs a ratio of 23 lately, based on figures of $215,000 and $9,240.

Arlington, Texas

Back to the Lone Star State, this city between Fort Worth and Dallas, with median figures of $250,000 and $11,400, had a ratio of 22.

San Antonio

This Texas city southwest of Austin had a median sale price of $244,000 and median annual rent of $11,280, resulting in a price-to-rent ratio near 22.

El Paso, Texas

El Paso traded a low price-to-rent ratio for a higher one when home prices rose. It’s at a 22, based on recent figures of $187,000 and $8,520.

Omaha, Neb.

With a median sale price of $206,750 and median annual rent of $9,600, Omaha had a recent home price-to-rent ratio of 21.5.

Nashville, Tenn.

The first Tennessee city on this list is the Music City, with a ratio of 21.

Virginia Beach, Va.

The ratio here has reached 21, based on a median home sale price of $290,000 and rent of $13,560.

Tampa, Fla.

This major Sunshine State city had a price-to-rent ratio of 20, based on figures of $290,000 and $14,400.

Jacksonville, Fla.

This east coast Florida city had a recent ratio of 20, based on a median sale price of $233,000 and rent of $11,640.

Charlotte, N.C.

Charlotte’s price-to-rent ratio of 20 arises from a median home sale price of $295,000 and median annual rent of $14,640.

Fort Worth, Texas

Panther City’s price-to-rent ratio has crept up to 20, based on a home sale price of $262,000 and rent of $12,960.

Houston

Houston, we have a number. It’s 20. That’s based on a median sale price of $269,000 and median annual rent of $13,200.

Louisville, Ky.

Despite having a different median sale price ($205,000) and rent ($10,440), Louisville had the same price-to-rent ratio as some bigger cities, at about 20.

Columbus, Ohio

The only Ohio city on this list had a price-to-rent ratio of 20, due to a median sale price of $208,000 and median annual rent of $10,320.

Atlanta

Heading South, Atlanta had a median sale price of $349,450 and median annual rent of $18,480, for a price-to-rent ratio of 19.

Miami

Those looking to put down roots in this vibrant city will find a price-to-rent ratio of a hair under 19, based on $360,000 and $19,200.

Minneapolis

The Mini-Apple is sweeter on renting, with a ratio of 19, based on a median sale price of $295,000 and rent of $15,600.

New Orleans

Next up is another charming Southern city, with a price-to-rent ratio of 18, given a median sale price of $312,500 and median rent of $17,040.

Kansas City, Mo.

In this Show-Me State city, a median home value of $218,000 and median annual rent of $12,000 equate to a price-to-rent ratio of 18.

Chicago

Chi-Town’s 16.5 ratio is based on a $305,000 median home sale price and $18,480 median rent.

Memphis, Tenn.

Memphis logs a ratio of 16, with a median home sale price of $163,000 and median annual rent of $9,960.

Indianapolis

The ratio in this capital city is 16, thanks to a median home sale price of $185,000 and rent of $11,280.

Philadelphia

This major East Coast city had a recent median sale price of $240,000 and median annual rent of $16,200, for a price-to-rent ratio of 15, the number that begins to signal that a place may be more favorable for buying over renting.

Baltimore

Charm City had a recent median home sale price of $198,000 and median rent of $14,160, for a price-to-rent ratio of 14.

Newark, N.J.

Newark, anyone? The median sale price here was $271,000, but median rent spiked to $1,750 a month, leading to a buyer-friendly ratio of 13.

Milwaukee

Milwaukee is more favorable to homebuyers than renters, thanks to a price-to-rent ratio of 11. This Midwest city had a recent median sale price of $155,000 and rent of $14,400.

Detroit

Detroit saw a spike in home sale prices, though the latest median was a relatively low $71,000, compared with median rent of $10,800, for a ratio of 6.5.

The Takeaway

The price-to-rent ratio lends insight into whether a city is more favorable to buyers or renters. Usually in a range of 1 to 21-plus, the ratio is useful to house hunters, renters, and investors who want to get the lay of the land.

If you’re in the market to buy, whether as a primary-home owner or investor, give SoFi mortgage loans a look.

SoFi home loans have competitive rates and no hidden fees. Plus, you may qualify for a loan with well under 20% down.

Interested in a home loan with SoFi? Find your rate in two minutes.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.
SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.
Third Party Brand Mentions: No brands or products 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.

SOHL20035

Source: sofi.com

February 16, 2021

3 Smart Exterior Home Remodel Ideas

Curb appeal should always be front of mind when you plan to sell your home and want to attract buyers, but it’s just as desirable when you want to boost your real estate’s resale value in general. It also makes your home a more appealing place in which to live in the interim, which is why you may want to consider these smart exterior home remodel projects in the future.

Ideas for Exterior Home Remodel Projects

No matter how beautifully you decorate the inside of your home, the outside offers up the first impression to visitors, and these exterior home remodel ideas can be great investments for you as a homeowner—whether you’re planning to sell your house now or not.

From adding texture to the exterior of your home to swapping out old windows for more contemporary ones to fixing up your front door, a home exterior makeover can be a smart way to make a lasting impact in a short amount of time.

Replace Your Front Door With An Inviting Style

Psychologists say that it takes just seven seconds to make a first impression, meaning your front door is one of the first parts of your house that a guest or potential buyer will see—the catalyst for making a snap decision on how they feel about the home in general. Thus, the front door should be one of the first places you focus your energy when tackling exterior renovations of your property.

combining cedar shingles and shiplap in the same color .

You can also mix and match levels of gloss, or shapes and lengths of bricks and stone.

For a baseline cost, installed vinyl siding can range in price from $6,116 and $16,143, with the average cost being $10,956. Your costs will depend on the thickness of the siding, how much added style you want as you mix and match textures, the size of your house, how standard the shape of your house is or isn’t, and any added details like moldings, trim, soffits, corners, or vents. If there’s old siding that needs to be removed first, you’ll also want to factor in the additional cost of labor (or consider doing it yourself).

Upgrading the Windows

credit card debt can be tricky to pay off. That’s because most credit card companies charge compound interest, which means you’re paying interest on the accrued interest, with the interest continually calculated and added to your balance. To make matters worse, the interest may typically be compounded daily.

Even if you make minimum payments, the interest just keeps compounding. In fact, it keeps doing so until the balance is paid off completely. If you miss a payment, the situation gets worse, with late fees and penalties often added on.

If you’d like to calculate what you’d actually pay on your remodeling debt, use our credit card interest calculator.

If you decide that it won’t make sense to use a credit card to pay for your remodeling, then consider comparing and contrasting home equity lines of credit versus personal loans. Under certain circumstances, a home equity line of credit (HELOC) may make sense; for example, if you have significant equity in your home, plan to borrow a large amount of money and/or want the potential tax benefits.

Benefits of choosing a personal loan include:

•  You won’t tie up any equity in your home.
•  Fees are likely to be less, and maybe you won’t have to pay any fees at all (like at SoFi).
•  Application and approval processes are typically faster than with a HELOC.

With a home improvement loan from SoFi (not a HELOC; rather, a personal loan for home improvement purposes), you can benefit from:

•  a quick process, one that typically takes seven days from online approval to funding
•  fixed payments, which makes budgeting easier
•  not having your home equity tied up
•  no fees, no surprises, no catches

The Takeaway

Considering exterior home remodel projects can be a way to increase your house’s curb appeal, while also adding value; they also are often the quickest way to turn a real estate investment into long-term value. Exterior home projects can be as simple as adding a fresh coat of paint to your existing front door or as complex as replacing all the windows in your house to be both contemporary and more energy efficient.

At the very least, tackling these smart exterior home remodel ideas should help you down the line when you decide to sell your house.

To get started, you can find your personal loan rate in just two minutes. Then, when you’re ready, you can quickly and easily apply.

Ready to get started? You can quickly and easily apply for your personal loan online.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.
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.
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.
PL18214

Source: sofi.com

February 14, 2021

How Much Does it Cost to Remodel a Kitchen?

If the kitchen is the heart of the home, what does it say when yours is falling apart? Outdated fixtures, old appliances, or a dysfunctional layout might have you daydreaming about a full kitchen renovation—but how much will it cost to remodel your kitchen?

Before you begin your kitchen remodel, you might want to consider why you’re remodeling, how much work it will require, when you’ll schedule the renovations, and how you’re going to pay for it all, not to mention the obvious: if, ultimately, it will add value to your home.

Why Should I Remodel My Kitchen?

Zillow Housing Aspirations Report , 76 percent of Americans said they’d prefer to spend on upgrading their home rather than using the money as a down payment for a new home.

Homeowners remodel for different reasons, but it’s important to consider the cost, have discussions with your spouse or partner around the kitchen table, and evaluate what the average return on the kitchen remodel will be before diving into plans or spending a large portion of your overall home renovation budget.

Do you plan to live in your place a few more years and enjoy your new kitchen, or strategically upgrade for a more appealing home sale in the near future? The answer will probably influence where and how you spend money on your kitchen.

What is the Average Return on a Kitchen Remodel?

The truth is you may have a difficult time recouping the total cost of a kitchen remodel in a home sale. When it comes to making money off of a kitchen remodel, the best bang for your buck may be less costly but visually impactful minor renovations: things like replacing the fronts of cabinets, upgrading countertops, replacing fixtures like faucets or lights, repainting, or putting in new flooring.

According to Remodeling Magazine’s Cost vs. Value Report 2020 , the national average return on investment (ROI) for that work is approximately 78%. An upscale remodel, on the other hand, yields a 53.9 percent ROI on average.

If you’re looking at a kitchen renovation solely to add value to your home in a sale, you might want to consider other upgrades that are higher in return and lower in cost, as well. In a Zillow survey , 58 percent of buyers said having their preferred style of kitchen was “extremely or very important to their home-buying decision.” Thus, if you’re considering selling your home in the near future, small, strategic updates instead of a full-blown kitchen remodel could potentially help the sale of the home.

How Much Should I Spend on a Kitchen Remodel?

The budget for your remodel will vary widely based on the amount of work you want done and the quality and cost of the materials you choose. On average, homeowners spend between around $22,000 for a minor kitchen remodel up to $116,000 for an upscale kitchen remodel. With such a wide range to consider, it might be wise to think about what your budget is before calling in contractors.

Consider what overall changes you want to make to your space. Will the kitchen remodel be a simple update of appliances, or do you want to change the entire layout and design?

Once you have an idea of what you want in mind, consider how to budget for it. What items or updates are must-haves in your kitchen remodel? What could be removed if the tally for your overall kitchen renovation ends up being too pricey? A prioritized list of updates or changes with the estimated cost for each project attached can be a helpful guide when trying to stay on budget within a certain price range.

Deciding how much you want to spend on your remodel is entirely up to you. If you’re looking for guidelines, HGTV recommends spending between 6 and 10 percent of the value of your home to get the best ROI.

But even the best planned budgets might go awry, so including a line item in your budget for unexpected expenses can help down the line. Use our Home Improvement Cost Calculator to get an idea of how much your kitchen remodel will cost.

Where Can I Cut Costs Remodeling My Kitchen?

If you’re trying to keep costs down on your kitchen remodel, keep in mind that certain design choices are likely to drive the budget up. In a full-scale kitchen remodel, new kitchen cabinets are typically the biggest expense, generally accounting for 20 to 40 percent of the project budget. If you’re looking to cut expenses in your kitchen remodel, you might consider trying to refinish or reface your existing cabinets, as well as adding new hardware for a more modern look.

10 to 12 weeks ; however, note that’s simply an expectation. The reality could be very different, and the time of year will also come into play.

The Takeaway

A recent kitchen remodel can be a big selling point for potential buyers if you intend to sell your house in the next few years. Renovating your kitchen also can be a way to add functionality to a home you plan to live in for years to come.

When beginning the process of plotting out your kitchen remodel, set a budget and prioritize what facets are most important to you. Look at the average return on a kitchen remodel investment and also consider how much of the work you potentially can attempt yourself versus what you’ll need to hire a contractor to do.

While cabinet finishes, new appliances, and fresh countertops can be exciting, setting aside a budget often is not. If it looks like your ambitions could outspend your budget, you might consider taking out a personal loan.

Personal loans from SoFi have low interest rates available for those who qualify, and offer fixed monthly payments. These 100% fee-free unsecured loans might be just the recipe to getting your perfect kitchen.

Find out more about using a SoFi personal loan to update your kitchen.

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.
Third Party Brand Mentions: No brands or products 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.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SOPL19039

Source: sofi.com

February 13, 2021

6 Tips for Doing Home Addition Projects the Right Way

Home additions and renovations can be purposeful, aesthetic, functional, or a need that strikes deeper into your personal idea of living space. Perhaps you’re building a guest cottage, new garage, or outbuilding; adding a deck; installing a pool; or upgrading the bedrooms and bathrooms to better reflect the current situation and age of your family.

Although the specifics of each of these undertakings may vary, the same underlying principles apply to each of them, so we’re sharing six tips for tackling home addition projects the right way.

How to get started with a home addition

Home additions can boost the value of the home while enhancing aesthetics and functionality. In fact, home additions and renovations can be among the most effective ways to increase your home’s value, and you can tailor the construction to your particular stage in life in a way that is customized to your needs and wants.

To transform your home addition ideas into a completed project, there are a few steps to consider first:

• Create a plan

• Set a clear budget

• Work with trusted professionals

• Decide what parts of your home addition you can do yourself

• Research and obtain permits

• Fund your project

Create a Plan for Your Home Addition

Perhaps you’re adding an extra bedroom and bathroom to the back of your house for a place for guests to stay. As part of the process, you’ll need to first make sure that the addition will fit within your property lines; you’ll also want to check with your local government to see how closely codes in your city allow you to build next to someone else’s property.

While creating your home addition plan, also ensure that any construction will not interfere with utility lines or pipes, as well as whether the structural changes you’re considering will fit into the framing and foundation of your building.

As you design the bedroom and bathroom, think about them from two perspectives: first, how these rooms will add value to your living space; then, how the construction will impact the outside of your home, architecturally speaking.

You’ll also need detailed plans drawn up by an architect or builder that describe the scope of the work and the materials needed. To consider how home additions may increase the value of your home, discover the resale value of your next real estate improvement project with our Home Project Value Estimator.

One strategy to approaching home additions is to create your dream list, then have alternate choices in mind if your budget, material availability, or other external factors create a need to alter the project down the road. For example, you may love the look of marble flooring, but its price point might be higher than you’d initially estimated—or perhaps it doesn’t blend in with the rest of your house once you’ve started laying out the plans. Having a back-up plan—and one that’s cost-efficient at that—could help keep your budget in check.

According to HomeAdvisor.com , home additions can typically cost anywhere from $14,000 to $150,000, with the average home addition cost being $40,915. This figure doesn’t take into account factors like where you live, the size and scope of your addition, or the slope of your property, all of which can vary across the country. Plus, if you want your addition to blend in with the rest of your house, you also may need to plan for improvements in existing rooms.

Set a Clear Budget for Your Home Addition

According to HouseLogic.com , major upgrades like a bathroom remodel or family-room addition typically run $100 to $200 per square foot; sometimes, they can cost much more. This article recommends that you set a budget for your home addition by first obtaining bids from three professionals, then adding in 15 to 20 percent to the overall project price given by the contractor to cover unforeseen costs.

If the ballpark figure is too high and doesn’t align with your budget, then you might want to look at alternative choices for materials that will still give you the general renovation you desire. You could also scale back on your plans or save some of the more costly home addition projects for the future when your budget allows.

If you intend to work with a specific contractor, then your chosen company may be able to help you find lower-cost options—for example, replacing granite countertops with laminate ones—and offer creative solutions gleaned from years of industry experience. Or you may want to look at reducing the scope of your project to a smaller addition or even asking the contractor for competitive pricing for the off-season.

Work with Trusted Professionals

Whether you do some of the home addition work yourself or plan to have the professionals of your choice build the addition, it’s crucial that you hire the right contractor for your needs. Tips for working with contractors include:

• Get three to six bids, then research companies that seem like good matches. You can check for information about these contractors at LinkedIn , Angie’s List , and the Better Business Bureau . Have any complaints been filed at your state’s contractor board? (You can find state-by-state licensing requirements for contractors here .)

For contractors who interest you, reach out to references they provide for personal experiences from past clients.

• Be wary of suspiciously low bids. If a quote comes in significantly lower than that of the other contractors who bid your home addition project, it’s possible that contractor may not understand exactly what you want; this can lead to significant problems if you hire this company without clarifying specifics.
• Hire a contractor who you think you can work well with, but don’t base your decision largely on emotion.

Decide What Parts of Your Home Addition You Can Do Yourself

Say the home addition ideas you have are necessary to solve space problems, perhaps you’re having a baby, or maybe your mother is moving in with you—but you’ve got to find a way to adjust the costs of a home addition. In this case, it might make sense to figure out what you can do yourself.

If you’ve got the experience needed to do the demo work safely without damaging load-bearing walls, electrical wires, and the like, this can save you some money on labor. If you’ve got professional-level skills in plumbing or drywall, you might talk to your contractor about taking on those tasks yourself and further reducing the cost of labor. Or you can attempt the finish work, such as sanding walls, painting, and general cleanup.

Research & Obtain Permitting Requirements

Unfortunately, a home addition isn’t as simple as deciding what you want to do, saving up, then paying for the work. You also need to make sure your home is appropriately zoned for the home addition or remodel. Depending on the scope of the project, you may or may not need a permit.

For example, if you want to build a deck in some states, you need a permit if you intend for it to be more than 30 inches off the ground. Getting to know your local codes can help surmount significant hurdles as the project unfolds, which often will save time and money for homeowners.

Strategically Fund Your Project

To find materials for your home addition on a budget, you could shop at stores like a Habitat for Humanity ReStore , attend auctions, or explore similar options to find salvaged materials. Before you go this route, though, if you’re employing a contractor, make sure he is willing to work with recycled materials and ones that may not be standard size.

When adding a room to a house that’s a higher priced project, it might be tempting to use credit cards to pay for expenses. If you’re doing this to maintain a record of your spending or to take advantage of credit card reward points, this can be a good strategy provided you can pay off the balance quickly, ideally within a single billing cycle.

But when you can’t pay off the balances, it can be easy to get caught up in a spiral of debt, and credit card debt is especially challenging. Why?

Credit card companies typically charge compound interest on the current balances on your accounts, which means they charge interest on the accrued interest—in other words, there is interest that’s continually being calculated on a daily basis and added to your balance until you pay it off in full.

To find out how compound interest is affecting your outstanding balances, you can use our credit card interest calculator.

Getting a Home Improvement Loans for Your Home Addition

Consider getting a home improvement loan for your home addition project. At SoFi, we offer competitive rate home improvement loans that can allow you to focus less on your budget and more on building your dreams.

Benefits of choosing SoFi for your personal loan for your home improvements include:

•  A quick process: You’re anxious to get started (who wouldn’t be?) and, on average, it takes only seven days from online approval to funding, allowing you to transform your home addition plans into reality soon.
•  Fixed payments: This is ideal for budgeting purposes.
•  Absolutely no fees: No surprises, no hidden fees, no catches. None.

When it comes to our personal loans, they are 100% fee-free. Plus, the application process is fast and easy, conveniently online, and you have access to live customer support seven days a week.

If you lose your job, we can pause your payments temporarily, and even help you to find a new job.

The Takeaway

A home addition can increase the value of your real estate while also allowing you to retrofit your house to your current lifestyle. There are many factors that figure into a big decision like a renovation, and it’s important to consider it from as many angles as possible.

With a quick online application process and lower rates than most credit cards, SoFi personal loans can help you make your house a dream home. Check your rate in just two minutes.

Ready to get started? You can find your rate in just two minutes, with no commitment. When you’re ready to get going with your home addition plans, you can apply for your personal loan quickly and easily.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.
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.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
PL18215

Source: sofi.com

February 13, 2021

How Much Does It Cost to Paint a House?

Painting your house can be the quickest way to dramatically alter its appearance, but how economical is it? Depending on the size of your home, the cost of painting a house will vary based on materials used, whether you hire professional help or do it yourself, and the size and texture of the surface area to be painted.

There are several reasons a homeowner might want to refresh a house via a coat of paint: to change the overall look or aesthetic, to brighten a room and enhance natural light, or to maintain the integrity of the material from weather elements. Plus, keeping your home updated may increase its value.

Here are some factors to take into consideration when trying to figure out how much it will cost to paint your house.

How much does it cost to paint an interior?

Let’s start with the paint job you’ll spend the most of your time looking at: the interior. The cost of painting an interior space varies greatly due to the type of paint materials you choose, what condition the previous surface is in, if you’re planning on doing the doors and trim in addition to walls, if you hire a professional painter, and how many rooms you’d like to paint.

Cost to paint per square footage

You may expect the cost for an average-sized room, approximately 10 feet by 12 feet in size, to be somewhere between $300 to $1,000 for a professional job using $2 to $6 a square foot as a price baseline with $3.50 as an average. If you do it yourself, the cost of the paint and materials might set you back around $200 to $300 .

When looking at material costs, consider that a gallon of paint normally covers around 400 square feet and know that sometimes labels overestimate how much surface area a gallon can cover. If you’re painting a textured wall, you’ll likely require more paint because the texture increases surface area, and if you’re painting a raw material like fresh drywall or bare wood, the absorption into the substrate can quickly increase the amount of paint you’ll need.

When hiring help to paint your home, how quickly you want the job done also may affect the overall cost. An experienced painter might be able to cover a wall faster and therefore cost less, whereas a more methodical painter may need more time. Generally, you can expect a painter to be able to cover about 100 to 120 square feet in an hour.

Cost to paint by paint type

Prices vary based on what type of paint you choose and how much material you need, but you can base estimates off the fact that most paint is priced in the range of $15 to $40 a gallon for higher-end paint, and you’ll probably need between one to two gallons of paint per room.

Primer, which is a necessary first step for most projects, might cost around $10 to $20 a can, but if you’re on a budget or time crunch, you can purchase paint colors that combine primer to save time. If using primer, which is especially necessary when painting a lighter color atop a darker one, you’ll typically use at least two quarts of primer to cover one average-sized wall.

While these prices may fluctuate, here is a breakdown of popular paint brands and the average cost of paint per gallon:

Brand	Average cost per gallon
Behr	$30-$57
Benjamin Moore	$42-$80
Farrow & Ball	$80-$120
Sherwin Williams	$37-$102
Valspar	$13-$55

Prices were accurate at the time of publication.

Professional Painter Costs

On average, professional painters cost $30 to $40 per hour per painter. The overall cost to paint your house can increase based on the prep work needed before painting and any equipment rentals such as scaffolding or a lift that may be required.

If on a set budget, when negotiating cost with a painter, consider proposing a project fee versus an hourly rate, as well as doing any prep work yourself. The added time required for properly preparing a surface for a topcoat of paint may be the highest cost of a project.

Non-Paint Costs

When painting your home, you’ll encounter a variety of costs for the tools required to paint. Some of these supplies like brushes and drop cloths can be used again, so in the long run, purchasing your own tools may save you money. If paying for labor, you may be able to deduct the costs of supplies if you provide your own, though professional painters typically use their own reusable supplies.

Necessary painting supplies may include:

•   Painter’s tape:To protect areas like ceilings and trims from getting paint on them
•   Dropcloth: To cover floors and furniture that could be damaged
•   Ladder: To paint a high wall or harder-to-reach areas
•   Paint tray or bucket: You’ll add a small amount of paint to this tray or bucket to use while painting to efficiently use a roller and to preserve the unused portion of the original gallon of paint
•   Paint rollers and brushes: A roller covers larger areas more evenly while a small brush can be used for touch-ups and corner cut-in

How Much Does It Cost to Paint a House Exterior?

The national average cost of painting a home exterior is $2,928, but a 2,500-square-foot house can range from around $1,250 to more than $8,750 depending on a variety of factors. Painting the exterior of your home could increase your home’s value, potentially improve the structural integrity of the building and give you the chance to make any needed exterior repairs at the same time.

Two of the biggest factors that determine how much it costs to paint your home exterior are square footage and how many stories your home has (hint: the more stories, the higher the price). Additionally, the type of window framing (wood, metal, or vinyl) can increase the amount of time required to complete the work and affect the price.

While costs vary based on factors like location and type of paint, this chart from HomeAdvisor should give you an idea of what it may cost to paint your house. Please note that these estimates include labor costs as the painting of the exterior is a job better suited for a professional.

Home Stories	Square Footage	Cost Range
Single Story	1,000–1,500	$1,500–$3,500
Two Stories	1,500–2,500	$3,000–$6,200
Three Stories	2,500–3,000+	$4,500–$10,000+

Exterior painting can get complicated due to the variety of materials you can find on the outside of a home. Different materials require different paints and tools in order to prepare them for the outdoor elements.

To budget for how much it might cost to paint the exterior of your house, you have to look at each type of material you’ll have to paint. The following estimates look at the costs of painting a few materials, including the tools, paint, and labor possibly required to complete the paint job.

Concrete Siding

Cost estimate: $500 (app. 250 sq. ft.) to $3,000 (app. 1,000 sq. ft.)

Why: Because concrete walls have to be prepared before painting, you may be required to remove previous finishes to ensure the paint won’t peel or chip off, which can increase labor costs. In order to prime the concrete, you may need special sealants, paints, and primers to help the final coat of paint endure against the elements.

Metal Siding

Cost estimate: $400 to $3,500

Why: Metal siding, generally made of aluminum and galvanized steel, may require cleaning before painting. If any of the metal is rusted or damaged—or there are missing pieces—a professional may have to repair the metal. If the damage is severe, old paint likely will need to be removed from the area around the problem in advance of painting.

Stucco Siding

Cost estimate: $1,400 to $6,000

Why: Depending on the state of the previous paint job, stucco can be one of the easier materials to paint. The smooth and limited variability of the surface might make a stucco project more affordable than painting other types of materials. The process may involve cleaning the stucco, caulking windows, and filling in surface cracks, although if the previous paint has deteriorated to the point of peeling or bubbling, the amount and nature of preparation work can increase.

Vinyl Siding

Cost estimate: $600 to $3,500

Why: Vinyl siding needs to be cleaned and repaired, if necessary, before beginning to paint, and a careful evaluation of the benefits is often the best approach. It can be about the same cost to replace vinyl as it would be to paint the surface, as vinyl is typically installed with the chosen color embedded within the plastic. Additionally, the plastic is often brittle with age and doesn’t always warrant the investment in money for a paint job.

Wood Siding

Cost estimate: $700 to $3,000

Why: Similar to painting wood furniture or floors, wood siding that is damaged due to element exposure can be painted or stained. This process may help defend wood siding against sun, humidity, pollen, mold, and other environmental elements like insects. The cost might increase if the wood has holes or other issues, but the painting process should help protect your home’s exterior from needing more repairs later on.

Tips on How to Pay for the Cost of Painting Your House

Because painting supplies and labor costs are often different depending on regional aspects and the large variety of substrates, it can be difficult to know your final cost of painting your house until you research supplies and professionals in your area. In the meantime, you can check out this paint cost calculator for an idea of how much you may spend to paint the inside or outside of your home.

The Takeaway

The cost to paint a house is dependent upon the size and texture of the surface area, the kind of paint used, and whether you hire a professional or tackle the painting yourself. If you don’t have the available cash to pay for the costs of painting, it’s often preferable to find ways to save up for your project.

As an alternative, you can consider applying for a SoFi Personal Loan to help with home improvement projects. Unsecured personal loans can be used for a variety of purposes and can go a long way to help making your home improvement ideas a reality.

With a quick online application process and lower rates than most credit cards, SoFi Personal Loans can help you transform your house into a dream home. Check your rate in just two minutes.

Need a change of color? Find your rate for a SoFi personal loan today.

Third Party Brand Mentions: No brands or products 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 Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SOPL19009

Source: sofi.com

February 3, 2021

Are Home Warranties Worth It?

Congratulations on the new home. But hang on. The garbage disposal isn’t working as it should. The hot water doesn’t seem to be hot anymore. A home warranty can ease the headaches and financial strain of fixing or replacing appliances and home systems, but any contract will require much more than a glance.

A policy can be purchased directly from a home warranty company at any time, not just upon a move-in. In some cases, the seller may provide a home warranty with the sale of the home.

Home warranties can help protect new homeowners and existing owners from troubles here and there, but is a home warranty really worth it?

What Exactly Is a Home Warranty?

A home warranty—different from homeowners insurance—covers specific items such as home systems (things like the HVAC system), washers and dryers, kitchen appliances, pool equipment, garbage disposals, and exposed electrical work.

Homeowners insurance covers theft and damage to a home from perils like fire, wind, and lightning strikes.

While homeowners insurance is typically required by a mortgage company, home warranties are optional.

Price of a Home Warranty

The cost of a home warranty can range from about $350 to $600 a year, or more for coverage for items not on the stock home warranty list. Extras may include pool systems and septic systems.

Those who purchase a home warranty will pay that annual premium, but if they do call in a service provider they will likely have to pay a fee for service calls, too.

Depending on the extent of the issue, the service call may cost anywhere from $60 to $125.

Pros of a Home Warranty

resale value. When selling a home, homeowners with a home warranty may be able to transfer the warranty to the new owner, which could be a bargaining chip for those attempting to sell an older home. (Some home warranties are non-transferable, so it’s up to sellers to do their due diligence when adding this to the deal.)

Cons of a Home Warranty

A downside of a home warranty is that it can be complicated to understand. That’s why it’s up to every purchaser to carefully read the contract before signing and ask all the questions they need to in order to understand the warranty.

For example, a home warranty may come with a financial limit per repair or per year. So if someone ends up having one heck of a year with the appliances, some of those repairs may not be covered.

You may need to request additional coverage for appliances that are considered optional or replaced frequently. And will your Sub-Zero fridge and Wolf range be covered if they go kaput? (Not likely.) Most warranty companies list excluded items on their sample contracts.

Ask: Will the plan repair or replace a broken item? If a repair is considered too expensive, the provider might offer to replace the broken item—but give you only the depreciated value.

Claims can also be denied by the warranty company for a variety of reasons, including if it believes an appliance hasn’t properly been maintained. The warranty company can also ultimately decide if a problem is worth fixing or not, despite how the homeowner feels about the situation.

Home warranties also cannot guarantee timeliness. If something breaks, homeowners may have to wait longer than they’d like to get it fixed.

Home warranties will also likely not cover preexisting conditions. If a person moves into a home with a termite problem, the warranty will likely not cover the cost to repair issues. Before you sign the warranty, the company will probably come inspect all the items covered, and could deny coverage for certain items.

Choosing the Right Home Warranty

This really comes down to personal choice and research. It’s important to look into each contract to see what is covered, what isn’t, the cost of services, and more.

While searching the internet for the right home warranty, it may be best to go beyond online reviews. Rather than looking on public listings, head over to websites like the Better Business Bureau and search for individual companies.

There, would-be home warranty buyers can search for companies to read the vetted reviews, alongside any potential complaints.

Is a Home Warranty Really Worth It?

A home warranty could be the right call for people who are not up for having to perform repairs themselves or don’t have time to hire technicians.

home’s inspection report. If there are red flags about a home’s condition, it may be a good idea to purchase a home warranty to cover any additional expenses that crop up.

Alternatives to Home Warranties

If homeowners are worried about protecting their investment but aren’t sure a home warranty is right for them, there is an alternative: Build up an emergency fund.

Homeowners can start stashing away cash into an emergency savings fund that they can dip into whenever they need repairs done. This acts as their own “home warranty” without having to pay a premium to a company.

To take it one step further, homeowners could also create a spreadsheet with the names of repair workers when they need something fixed.

The Takeaway

Are home warranties worth it? Anyone looking into purchasing one will want to take a close look at the annual cost, the charge for service calls, exactly what is and isn’t included, and how much of a replacement item is covered. Convenience is a benefit, but an alternative is to self-insure with an emergency fund.

Buyers might face another decision: choosing the right home loan lender. Looking into a SoFi mortgage is a great place to start.

House hunters can check their rate in a snap.

SoFi members can save a chunk of change on loan processing fees and enjoy all of the other benefits of membership.

Shopping for a home? See how a SoFi mortgage sizes up.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.
SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.
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 or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.

SOHL20056

Source: sofi.com

January 26, 2021

7 Tips for Maintaining the Value of Your Home

Before signing the dotted line for a new home, your real estate agent might point out features about the property that could be “good for resale value.” And while you may be in the market for your forever home, the unexpected twists and turns of life mean that people sell their homes for a million reasons.

For homebuyers who are in the market for a smart investment, selling their home when the time is right is the objective from Day One. They may anticipate the future of an up-and-coming neighborhood, get a killer deal on a short sale or foreclosure, or intend to upgrade once they grow their families.

For others, a move can be unexpected. Issues like financial changes (for better or worse), job transfers, unexpected bills, marriage or divorce, or the need for more or less space can all motivate homeowners to sell.

And for a few, they just realize that the house they bought isn’t right for them.

In fact, Americans move every five to seven years on average. (Apparently, we’re a restless lot.)

No matter what your future plans are for your home, doing what you can to maintain its value can be a smart strategy. And while some value-add items take care of themselves, like the property’s location and the current real estate market, the majority are up to the homeowners.

And let’s be real. When it comes to working on a home, a little work here and there is a lot less painful than a lot of work on a moment’s notice.

Here are some ideas for creating a home maintenance checklist:

Update, Update, Update.

If a home that’s for sale has an updated anything, the real estate listing will scream it out in ALL CAPS. This can apply to appliances, cabinetry and countertops, flooring, popcorn ceiling, bathroom remodels, kitchen remodels, and more.

But which updates will actually add value to the house is a different question, and the answer can vary depending on current trends. In 2020, for example, home buyers are looking for large, spacious kitchens and, thanks to COVID-19, a home office space.

If your kitchen is due for an update, try to keep in mind that this doesn’t necessarily mean stripping it to the studs and starting from scratch. Are the cabinets in good shape? Consider a fresh coat of paint or stain to reflect the latest color trends.

value estimator could help inform your decision.

Keeping an Eye on the Big Ticket Items

Repainting to cover wall damage or update to a more modern color is a project that may not take too much time or money out of your budget.

Repairing or replacing a home’s expensive items, like the foundation, roof, electrical, plumbing, water, septic, well, A/C—can come with some serious sticker shock.

Issues with a home’s foundation, for example, can cost upwards of $10,000 to remedy. But a foundation inspection? That’s more like $350 to $1,000 . And keeping an eye on the foundation and walls yourself is free. Note that estimates will vary based on factors like location, the size of the house, and the extent of repairs required.

Aside from the foundation, replacing a home’s central heating and air system can be a significant expense that can also cost five figures to replace in the event of a total failure. The biggest contributor? According to an article on Realtor.com, it’s neglect .

Regular maintenance can help extend the life of the system so it can reach it’s full life expectancy—which is generally about 15 years.

Staying On Top of Maintenance

According to HomeAdvisor’s State of Home Spending Report , the average homeowner spent $1,105 a year on maintenance in 2018. That sounds like a lot, but when compared to the average cost of $7,560 for home improvement projects in 2018, it starts to sound more affordable.

What’s more, the report found that homeowners completed an average of 6.7 home maintenance projects vs. just 2.2 home improvement projects.

For their study, they listed items like HVAC maintenance, cleaning gutters, and landscaping as maintenance-related projects, but the list can also include keeping up with the pool or hot tub, power washing siding, decking, or concrete areas.

If it seems like a lot to remember, consider setting reminders on your smartphone for things like replacing A/C filters, having carpets professionally cleaned, or flushing out the hot tub.

You may also consider adding a line item into your budget for maintenance items, since these are normal costs of owning a home and it can help to plan for them.

Improving Curb Appeal

If there’s a “For Sale” sign in front of your house, the outside will be the first thing a potential homebuyer judges about your property. If not, the way your home looks as visitors arrive still makes a statement.

To evaluate the outside of your home, look at it from a visitor’s perspective. Is the grass trim? Are the weeds under control? Consider taking a look at the driveway, mailbox, and front porch area and asking yourself, if you were thinking about purchasing this home, would you be interested based on the curb appeal?

If the answer is no, it doesn’t mean you have to dig into the dirt. An affordable landscaper can help if your home is lush with vegetation, invest in mulch to help keep weeds under control, and consider native plants and shrubbery that require the least maintenance.

Another item that deserves attention is your front door. It creates a statement about your home, serves as a welcome to visitors and, if it’s steel, comes with an amazing return on investment—as much as 91% of the costs, which average around $1,500.

Upgrading Energy Efficiency

89% of homebuyers report wanting to see efficient windows and appliances in a home), but also if you want to reduce spending on bills and taxes . And it doesn’t just mean big investments like switching to solar or wind-powered energy, although those are both growing trends .

Making your home more energy efficient can also be as simple as replacing bad weather seals, ensuring that the attic has sufficient insulation, paying attention to the air and heating, and using energy-efficient light bulbs and appliances.

Upgrading the energy efficiency of your home is something that might even be rolled in with another project, such as maintenance or updating.

Installing Smart Tech

Even if your home is more than 100 years, old adding smart tech can make it 21st-century ready. Smart home assistants like Google or Alexa, for example, can control everything from the lights to the TV to locking the front door.

They can also allow you to remotely control your heating and air temperatures, make sure the oven is actually turned off, and even give you a sense of security with security systems or video door bells. In order for the home assistants to accomplish all of these features, additional smart appliances may be required.

While some types of home tech are hard-wired into the house and others are more portable, even being able to say “wired for surround sound” can be a bonus on a home listing.

According to a recent Forbes report, smart home tech is starting to move up the must-have list for homebuyers. But, like energy efficiencies, adding it to your home can be a perk even if you have no immediate plans to move.

Keeping the Bugs at Bay

One important job that comes with homeownership is keeping unwanted critters outside where they belong. Public enemy No. 1 in this category? Termites. They can wreak havoc on a home’s wood structures to the tune of $1 billion in property damage every year.

The problem is so widespread that some home loan companies require buyers to get a termite letter , which is basically a guarantee that the home is free from termite damage.

DIY recommendations for keeping the pests at bay can also check off items on the home maintenance list, including keeping gutters and downspouts flowing, filling in any places where water pools around the home or in the yard, filling in cracks in the foundation and keeping air vets free and clear.

And if an ounce of prevention is worth a pound of cure, then a $75 to $150 termite inspection is worth avoiding a $1,000 termite treatment.

Beyond termites and the havoc they wreak, there are a variety of other living creatures that can cause damage to a home or surrounding property, including attic squatters like mice or raccoons, carpenter bees, moles, mosquitoes, and even grasshoppers that brunch on beautiful landscaping.

Making Improvements Affordable

Budgeting a few extra dollars a month for A/C filters is one thing, but putting on a new roof is a bigger beast. Before going down the path of home improvement, it can be important to determine whether the goal is to add resale value, or something that’s just a personal desire. If it’s the former, consider using a Home Project Value Estimator that can help determine whether it’s a smart investment, or if it might be wiser to take a different route.

From there, one next step could be to weigh the various options for paying for a home project. Some companies offer same-as-cash financing options, or deferred-interest loans , but in those cases it’s important to remember that if the balance isn’t paid by the deadline, it could lead to a payment that includes any leftover balance plus interest.

One way to avoid deferred-interest surprises is with a personal loan. Securing a low interest rate and a fixed monthly payment can mean no surprises, less hassle, and maybe even enough to hire an expert for the heavy lifting.

Ready to bring back or improve the value of your home? With SoFi’s Home Improvement Loans, qualifying borrows can get approved for up to $100,000.

Apply for a SoFi home improvement loan today!

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.
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.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.

SOPL20013

Source: sofi.com