Although both are certainly beloved, the Bluegrass State is known for more than the world-famous Kentucky Derby and Colonel’s fried chicken. As people from all over learn about the delightful weather and cost of living perks the state has to offer, Kentucky is changing at a rapid clip, while still holding onto everything that makes it special.
Kentucky average rent prices
Renters who don’t wish to drop thousands every month on housing would do well to consider Kentucky. The average rent price for a one-bedroom unit across the entire state is just $1,082. That’s down 1.1 percent over the last year. Emphasis on the word “average” – there are still plenty of cities in Kentucky that are even more affordable to call home, unlike, say, San Francisco or Boston.
The cheapest cities in Kentucky for renters
Looking for the best possible deal? We’ve done all the heavy lifting for you! Check out the 10 cheapest places to live in Kentucky, complete with average rent price and stats on how the rates have changed over the last year.
10. Louisville
Average 1-BR rent price: $1,108
Average rent change in the past year: +3.98%
Those who consider Kentucky fully country couldn’t be more wrong. Indeed, this largest city in the state has all the creature comforts a metro-seeker could want. But with enough warmth and beauty to rival anywhere else in the state. Found in the north-central area of the state, Louisville residents benefit from proximity to other major cities, like Cincinnati (1.5-hour drive), Lexington and Frankfort.
Not surprisingly, most people associate Louisville with its most famous event, the Kentucky Derby, held at Churchill Downs every May. It also hosts the Kentucky State Fair on an annual basis, complete with rides, games and still more equestrian/agricultural-based events to enjoy. Some things never change, though, and Louisville remains one of the world’s leading producers of tobacco and bourbon.
Currently, a one-bedroom apartment in Louisville rents for an average of just over $1,100 a month, an uptick of nearly 4 percent since last year. Although it’s not the cheapest place to live in Kentucky, it’s definitely one of them!
9. Florence
Average 1-BR rent price: $1,058
Average rent change in the past year: +10.22%
Close to the northernmost section of the oddly-shaped state, the city of Florence is more convenient to Cincinnati than it is to the vast majority of Kentucky’s big cities. In fact, at only a 20-minute drive from Cincy, Florence is actually a suburb of the big city. Because of this, it’s not too shocking that Florence is in the midst of a full-on growth spurt. Which is probably why rent prices have jumped more than 10 percent in the last year. Currently, Florence is the 8th largest city in Kentucky, with about 33,000 residents to its credit.
Even if you’ve never stopped in Florence, you’ve likely seen its most famous landmark along I-75 while driving through, the “Florence Y’all” water tower. Turfway Park is another popular local attraction, as the site of the annual Kentucky Derby prep race, the “Jim Beam Stakes.”
A one-bedroom unit in Florence rents at slightly over $1,000 a month. It seems poised to go higher if the more than 10 percent increase over the last year is any indication. Hopefully, it maintains its spot on the cheapest places to live in Kentucky.
8. Bowling Green
Average 1-BR rent price: $974
Average rent change in the past year: +18.04%
The city of Bowling Green really lives up to its name, thanks to the lush, vibrant landscape that makes up the area. Found in the southern section of Kentucky, Bowling Green is the third-largest city in The Bluegrass State. Its nearly 60,000 residents fall only behind only Lexington and Louisville. This is the first city on our list of the cheapest places to live in Kentucky to come in at under $1,000 per month in rent. However, it might not stay that way for long. Prices for a one-bedroom unit are up 18.04 percent since last year.
Bowling Green has a ton going for it, industry-wise, with a number of major employers calling the city home, including Fruit of the Loom/Russell Athletics, Camping World and General Motors’ Corvette assembly plant, among many others. Western Kentucky University and all of the educational/basketball opportunities it entails is another local gem. Bowling Green is also well-decorated, in terms of accolades. A couple of those include National Geographic’s “10 Best All-American Cities” list, its designation as “The Best Place to Live in Kentucky,” per MONEY Magazine, as well as Forbes’ “Top 25 Places to Retire.”
7. Fort Thomas
Average 1-BR rent price: $966
Average rent change in the past year: +2.43%
Smack on the southern bank of the Ohio River is the northeastern Kentucky city of Fort Thomas. This suburb only six miles south of Cincinnati is loaded with appeal, thanks to its active, engaged community and a full list of events. In particular, the weekly farmer’s market is a popular place to socialize, buy locally-sourced products and generally enjoy the atmosphere this lovely town has to offer. Currently, a one-bedroom unit averages $966 a month, a slight increase of 2.43 percent since this time last year.
Fort Thomas obviously has historical significance from a military perspective, as it was an induction center where men and women enlisted during World War I and World War II. The historic fort, now known as Tower Park, still stands! The Fort Thomas Military and Community Museum is a fabulous place to take a tour and learn more about the important role this city played during trying times.
6. Taylor Mill
Average 1-BR rent price: $960
Average rent change in the past year: 0.0%
It’s status quo for Taylor Mill, at least as far as rent prices are concerned. A one-bedroom rental averages $960 a month, the exact same as last year. With not quite 7,000 residents, Taylor Mill is a quaint community where everyone seems to know everyone else. Yet another Kentucky city near Cincinnati, Taylor Mill residents enjoy all the perks of the nearby metro, but with a quaint, country feel.
It’s also a sports lover’s paradise. Highlights of the area include the Bill Cappel Sports Complex, as well as a local youth softball facility. Close proximity to Northern Kentucky University makes it easy for residents to get that undergraduate or advanced degree near home.
5. Lexington
Average 1-BR rent price: $896
Average rent change in the past year: -2.73%
Just east of Louisville is the homey city of Lexington, which is next on our list of the cheapest places to live in Kentucky. Rent prices are down nearly 3 percent compared with last year, so a one-bedroom unit averages just less than $900 a month.
Also known as the “Horse Capital of the World,” Lexington is quintessential Kentucky. Experience the state in all its authentic glory via a distillery tour, zip-line trip or a milkshake and a snack at the historic Wheeler Pharmacy.
Lex also has a lot of culture to its credit, with a chic dining scene and active calendar at the Lexington Opera House. In fact, the dawn of the 19th century earned the city the nickname, the “Athens of the West,” thanks to its population stacked with forward-thinking intellectuals. As a result, there’s something for everyone in Lexington, no matter how wide and varied your tastes are!
4. Fort Mitchell
Average 1-BR rent price: $807
Average rent change in the past year: -0.82%
Rent prices dipped ever so slightly in the northern Kentucky city of Fort Mitchell over the last year, with a one-bedroom renting for just over $800. Yet another Cincy suburb, Fort Mitchell is the proud home of the landmark Greyhound Tavern, one of the most award-winning restaurants in the entire state. Those with a taste for the slightly odd can take in the sight of hundreds of ventriloquist dummies at the Vent Haven: Ventriloquist Museum.
Fort Mitchell is popular with young professionals and families, as it’s an easy commute but still surrounded by lots of fun things to enjoy. Restaurants and pubs sprinkle the area, plus there’s a ton of green space to take advantage of during the mild weather months.
3. Fairdale
Average 1-BR rent price: $771
Average rent change in the past year: +0.69%
Part of the Louisville metro area, the comparatively small city of Fairdale has a population of around 9,000 Kentuckians. Adventure-seekers can literally swing by the Zipline Kingdom in Jefferson Memorial Forest, which itself is the largest municipal urban forest in the country. At 6,500 acres, there are trails for hikers, bikers, horseback riders and so on. Plus, there are spots for camping, fishing and about anything else an outdoorsy person could want.
Fairdale’s surrounding areas are also pretty fun, with lots of wineries and distilleries to enjoy. There is plenty for the entire family to do, with the zoo, Speed Art Museum and Kart Kountry (the longest go-cart track in the world) just around the corner from Fairdale. At $771 a month for a one-bedroom unit, it’s ever so affordable to rent in this homey community, even if the price did go up slightly in the last year.
2. Southgate
Average 1-BR rent price: $631
Average rent change in the past year: +5.34%
Next to Fort Thomas near the Ohio border, Southgate falls well below the $700 a month rent threshold. A standard one-bedroom is $631 a month, despite the fact that the area saw a 5.34 percent rent increase over the last year.
There aren’t a ton of rentals to choose from in this itty-bitty community of only 3,800 residents, but those available in the historic neighborhood are quite charming. Established in 1907, the city is especially proud of its efforts to preserve green space and has been awarded Tree City USA designation every year since 2005. Southgate also has a fishing lake, park and active community center where people of all ages regularly congregate.
1. Henderson
Average 1-BR rent price: $538
Average rent change in the past year: +0.50%
Topping our list of the cheapest places to live in Kentucky is the city of Henderson. Yet another one on the banks of the Ohio River, this one flirts with the Indiana border. Home to Audubon State Park, this western Kentucky city is larger than many of the others on our list, with nearly 30,000 residents. Currently, you can find a one-bedroom apartment for an average price of $538 per month, an increase of only half a percent from this time last year.
That low, low price gets a renter access to plenty of fun stuff, as Henderson has a storied reputation for its events. For example, the W.C. Handy Blues and Barbecue Festival is held every June and is among the nation’s largest free music festivals.
Then, every July sees the Sandy Lee Watkins Songwriters Festival, full of acoustic performers from talented artists. Of course, August wouldn’t be right in this area of Kentucky without the annual Bluegrass in the Park and Folklife Festival, held right on Henderson’s picturesque riverfront.
Locals and visitors alike also love to enjoy the area’s outdoorsy options, like canoeing through the Sloughs Wildlife Management Area or a stroll through Atkinson Park Riverwalk for excellent views of the area’s wetlands. Don’t forget to hit Ellis Park Race Course for thoroughbred racing. They also have hilarious events like ostrich, camel and wiener dog races!
Kentucky fried affordability
Whatever size, scope or price point you’re looking for, there’s somewhere for you among the cheapest places to live in Kentucky. Bonus — there’s bound to be at least one KFC nearby when the fried chicken urge strikes!
Methodology
Rent prices are based on a one-year rolling weighted average from Apartment Guide and Rent.’s multifamily rental property inventory as of August 2023. Our team uses a weighted average formula that more accurately represents price availability for each unit type and reduces the influence of seasonality on rent prices in specific markets.
We excluded cities with insufficient inventory from this report.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.
Inside: Are you looking for ways to make money on the side? This guide has everything you need to know about the best side hustles for men. From turning your passion into profit with these gig ideas!
In this post, I collaborated with my husband. Together, we combined our ideas and expertise after work to generate ideas centered around how men specifically can make money. His input and insights were remarkably vital to this post.
Break free from the 9-to-5 grind and embark on a journey towards a fulfilling side hustle – it’s a game-changer for gentlemen looking to beef up their bank accounts.
In the ever-evolving landscape of side hustles, now is your year to supercharge your earnings. There’s a treasure trove of opportunities waiting for you to delve into, all while indulging in your passions. From tech-savvy endeavors to unleashing your creative genius and practical gigs that pay, our guide is here to unveil the ultimate side hustles that can set you on the path to financial triumph.
Ready to boost your income? Fantastic! You’re on the path to prosperity.
Here, we’ll explore the 40 best side hustles for men in 2024.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Embracing the Hustle: Why Men Should Consider Side Hustles
Side hustles are more than mere cash generators – they’re the keys to a world of freedom, flexibility, and endless growth potential.
If you’re a gentleman with a hunger for financial prosperity, a side hustle can be your golden ticket. It empowers you to call the shots and maintain your existing commitments while paving your way to success.
While women tend to lean towards side hustles for women, it’s high time for men to dive headfirst into the captivating world of side hustles!
How can a guy make extra money?
Making extra money doesn’t have to be monotonous. Whether you’re a tech whizz, an avid creator, or a hands-on worker, there’s something for you.
There are so many ways to make money. I just read this story about a college kid starting with $300 and turning his sticker side hustle into a full time business. 1
These options can yield solid income by leveraging your unique skills and interests. Want to learn more? Keep reading; we have plenty of ideas for you!
Top Side Hustles for Men
As my hubby said, extra income takes the financial strain off the normal job. With side hustles, you can choose how you want to spend your time – watching sports, playing video games, or making money.
The choice is yours!
Right now, learning to make money online for beginners is the most popular place to start.
1. Invest in Real Estate
Around here at Money Bliss, we always stress how to make your money work for you and real estate is no different.
Real estate investment is a golden opportunity that not only offers a steady income but also the potential for property value to soar. Keep in mind, that it’s a long-term game that requires a significant upfront investment.
However, there are many options like flipping properties, renting properties, or even investing through a REIT. Dive into the world of real estate to maximize your returns. Let your money do the heavy lifting for you.
2. Day Trader
Many men opt for trading stocks and options as a side hustle for several compelling reasons.
Trading offers flexibility, as your research can be done at any time, making it convenient to manage along with a nine-to-five job.
It has an immense profit potential, given the volatility and opportunities present in the global stock markets.
Many want to earn a rate of return greater than the average return of the S&P 500 – a common benchmark index for that competitor inside them.
Finally, trading presents an opportunity for continual learning and development, as successful trading requires staying updated with financial news, stock apps, market analysis, and economic trends, thereby enhancing one’s financial literacy.
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It’s been done over and over again, and the 30,000 students that Teri has helped to be financially independent and fulfill their financial dreams are my witnesses…
3. Become an Umpire or Referee
Sports fans, here’s your calling! Transform your passion into a profitable part-time gig by becoming a sports referee.
There is a HUGE shortage of umpires and referees.2 Rates per game can range from $20 to $60, and over time, you can earn even more as you referee older leagues. Plus many leagues are paying more to incentivize refs to come back to the fields.
Not only does it assure good pay, but it also lets you enjoy your favorite sport, exercise, and create exhilarating moments. Check it at your local club or league for training and to get started today.
This is something my brother-in-law did all the time and easily made 200 dollars a day.
4. Participate In Medical Studies
If adding to medical knowledge interests you while earning, consider participating in clinical trials.
Compensation depends on various factors like the study’s length and complexity. You can earn $50 to $300 a day!
It’s worth considering if you’re comfortable with potential risks and lengthy commitments. Websites like ClinicalTrials.gov or your local hospital could help you get started. It’s a unique way of contributing to medical research while making money. Do check the risks before diving in!
5. Moving and Heavy Item Delivery
Feel like adding some muscle? Moving and heavy item delivery might be your perfect hustle. If you’ve got a buddy, a solid back, and a truck (or can rent one), this is the gig.
You could easily earn about $20-$25 an hour helping people move houses or delivering large items. Opt for evening or weekend gigs to fit around your day job.
Get started by advertising your services or using apps like TaskRabbit or NextDoor. An excellent way to stay fit and earn some extra dollars at the same time!
6. Rent Out Your Extra Room
Do you have a spare room? Then, transform that neglected space into a cash cow.
Airbnb or VRBO can help you lease it out to travelers. Its user-friendly platform lets you manage rentals with aplomb. Plus, you get the chance to grow into a SuperHost.
Another option is to look at investing in a duplex where you live on one side and rent out the other.
7. Woodworking
This takes a special talent like my father-in-law had. He and his boys were known for crafting Adirondacks chairs, bedroom furniture, and patio tables.
So, if you have this woodworking knack, then this side hustle could be a golden ticket. The key to success is to perfect your craft to a few select items to be efficient with your time, so, you can better the profit. Let your handyman skills shine and earn you some extra cash!
The average earnings of a woodworking side hustle in the U.S. can range from approximately $500 to $3,000 or more per month, depending on factors such as the complexity of projects and marketing efforts.
8. Beekeeping
Honey, take note! If you’re not deterred by bees and are interested in agriculture, try your hand at beekeeping. This might be a family affair – like my daughter’s soccer coach.
Honey sells for around $20 a pound, and bees virtually do all the work! Plus, you contribute to pollination and the environment.
Combined with pest control services (like removing large nests), you can amplify your earnings. However, getting comfortable with bees might take time. But, once you do, the sticky sweet liquid gold that is raw honey could put a sizeable amount of money in your pocket.
9. Detail Cars
If you have a passion for cars and cleanliness, consider detailing cars as your side hustle. There’s something gratifying about transforming a dusty vehicle into a sparkling gem.
Depending on the quality of your service, you can earn up to $500 in a single weekend! Start by experimenting with your own car and build a portfolio to attract customers.
You’ll need tools like a good shop vacuum and detailing brushes. I have seen plenty of men showcasing their work on social media with before-and-after photos. Polish those wheels and drive towards profit!
10. Landscaping Side Hustle
Armed with green fingers? Eager to perform hard physical labor? Then a side gig in landscaping can do wonders for your wallet.
From regular lawn care to fall leaf cleanup to full-on backyard redesigns, there’s something for everyone. Look to websites like Lawn Love to match you with your first clients.
Potential income for this venture depends on how many hours of your time you are willing to trade.
11. Drive for Ridesharing Apps
Like to drive? Awesome, do it for cash! Ridesharing apps like Uber and Lyft got you covered.
Be your boss, and work on your terms.
You need to make sure you have a nice car, proper insurance, and learn the busiest routes to maximize your earnings. Do pay heed to your vehicle’s wear and tear, though. However, this is one of the jobs that pay weekly.
12. Snow Plowing
Living in a snowy region? Consider snow plowing. This is a quick way to make money! I can attest to my kids quickly making $200+ a day from snow shoveling.
Even better is to have business clients that need this service. As such, all you need is a reliable truck or SUV with four-wheel drive and a snowplow. Plus, you can upsell by offering extra services like salting and hand shoveling.
This lucrative side gig can result in you earning thousands each winter. It’s an opportunity to put your vehicle to good use and tackle Mother Nature for a handsome payout.
16. Knife Sharpening
If you have a knack for precision and patience, knife sharpening could be a rewarding side hustle. Businesses like restaurants butcheries, and home cooks are potential clients.
All you need is a quality knife sharpening setup and knowledge of the right techniques. Advertising your services on social media can help bring in customers. Who knew such an unusual skill could be so profitable?!
17. Plasma Donation Centers
While this one is probably more geared to side hustles for college students have you ever considered donating plasma for cash?
You help others, and it earns you up to $500 a month. It’s a generous deed with a minimal time commitment.
Search for “where to sell plasma in [your city]where to sell plasma in [your city]” to get started. Remember, most places have similar requirements to blood donation and may require a short medical screening first.
18. Bookkeeping
Good with numbers? Have an eye for detail? Look into bookkeeping.
Services like generating invoices, managing accounts payable, and preparing tax returns are always in demand. Overhead costs are low as you only need a computer and accounting software. Plus, payment is high at around $50 per hour!
For most bookkeepers, referrals are their bread and butter. To start out check the local Chamber of Commerce to start meeting other business people.
Turn your love for crunching numbers into a lucrative side hustle.
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19. White Label Software
Dip your toes into software reselling by using white-label software. This is great for someone who is good with technology and understands SaaS. However, no coding or IT background is necessary.
All you need to do is buy “seats” of an existing software at a wholesale rate, then resell them at retail.
Use any software name or category on Google and add “White Label” at the end to find options. Build a website, market your product, and start earning by becoming a digital intermediary! Start earning by becoming a digital middleman!
20. Work as a Translator
In the United States, nearly 20% of the population, roughly 67.8 million people, speak a language other than English at home, with Spanish, Chinese, Tagalog, Vietnamese, and Arabic being the most prevalent.3 If you’re fluent in another language, this opens doors to flexible and potentially lucrative side hustle in translation and interpretation.
Earnings in the language translation side hustle can fluctuate based on the client’s requirements and your preferences. For instance, you might find translation opportunities on platforms like Freelancer.com offering rates of up to $60 per hour, while translators on Fiverr can charge as much as $125 per project.
21. Pallet Flipping
Are you inclined towards an entrepreneurial middleman ship? Pallet flipping could be your ticket to substantial income.
This is similar to buying storage units unseen and flipping for a profit. With pallet flipping, the process involves buying and reselling pallets of customer returns, overstocked items, or unsold merchandise, often from major online platforms. Connect businesses that need pallets to ship their products with those looking to get rid of them.
Whether you start small or aim high, scalability and considerable earnings are within reach. Check out this Pallet Flipping book to get started.
22. Help Others Write Resumes
If you have a talent for crafting impressive resumes, there’s a lucrative side hustle waiting for you. Job seekers are constantly looking for professionals who can help them stand out in the competitive job market.
According to our research, professionals skilled in resume writing can start charging for their services on platforms like Fiverr, often earning anywhere from $50 to $150 per resume service including cover letters and LinkedIn profiles.
Mastering the art of creating effective resumes, including understanding industry-specific keywords, is the secret sauce to success in this field. By assisting others with their career aspirations, you can collect a decent income while making a meaningful impact on their job prospects.
This is also a popular digital product to sell on Etsy.
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23. Laundromat
Here’s an unconventional yet profitable idea – owning a laundromat! It’s an already profitable model (as it has been around for years) and most processes are automated.
Integrating some digital marketing skills and making tweaks like improving your online presence could earn you significant profit. But be aware, that this does involve an initial investment. Scope out opportunities to buy a laundromat near you.
Also, another trend is starting a laundry business where you take care of others’ laundry needs. Who would have thought laundry could be so rewarding?
24. Start a Consulting Side Hustle
Do you have expertise in a specific area? Consider starting a consulting side hustle.
Consulting is often about solving problems and providing strategies. Whether you’re skilled in marketing, HR, tech, or any other field, your knowledge can be valuable to businesses. Use your existing network to start and gradually grow your client base.
With the right marketing and a robust network, consulting can be highly rewarding. Honestly, this is a popular job after retirement for many. So why wait? Start monetizing your wisdom today!
25. Furniture Flipping
Ever heard of furniture flipping? It’s about buying used furniture at low prices, revamping it, and selling it for a profit.
Furniture flippers can be a goldmine especially if you know what to look for. Unearth the potential in old furniture and flip it into a profit with this artistic hustle.
You can source items from yard sales, flea markets, or online. Sanding and repainting can transform items into showpieces. This gig is perfect if you love hands-on projects that require creativity and patience. Remember, a great photo makes the sale for your final piece!
26. Walk Dogs
Dog lovers, rejoice! Here’s the perfect gig for you – dog walking. If you love playing with our furry friends and love the outdoors, why not get paid for it?
Apps like Rover can connect you with dog owners in your area in need of walking services. Dog walking can fetch (pun intended!) you around $10–$18 per walk. If you’re passionate about spending time with fidos, this side hustle is a pleasure that pays!
Rover
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27. Find Odd Jobs in Your Area
Not afraid to roll up your sleeves? Awesome! Odd jobs can be a treasure trove of opportunities.
Think yard work or furniture assembly. Seek out these gigs on platforms like TaskRabbit, Nextdoor, Craigslist, or Fiverr, and a few hours of work can earn you a tidy sum. It’s the perfect hustle for those in search of quick cash injections!
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28. Photographer
Are you skilled at capturing beautiful moments? Turn your passion into a lucrative side hustle by becoming a photographer.
With average rates of earning 500 dollars per day, your earnings could easily surpass those of a full-time job. You can explore areas like wedding photography, senior photos, or commercial product photography.
The best way to gain clients is through referrals or a fundraiser. Grab your professional camera and start capturing memorable moments while boosting your income. Focus your lens and let your creativity shine!
29. Unusual Rentals
Get creative! As this man demonstrated, unconventional rentals like a power washer can earn you thousands of dollars every month. 4
You can rent out spaces like your garage, or backyard to pet owners, or even invest in items like portable hot tubs or bounce houses. Platforms like Airbnb, Sniffspot, Vrbo, and Neighbor can help you get started.
Your unused space or items can transform into extraordinary sources of income. Dive into the world of rentals and unveil massive profits!
30. Cryptocurrency
Crypto investment is a popular side hustle that can yield incredible returns (and significant losses).
However, keep in mind that the cryptocurrency market is volatile, and you should only risk what you can afford to lose.
Crypto is not for the faint-hearted, but with the potential for high returns, it could be your golden opportunity.
31. Teach Music Classes
Do you possess a hidden musical talent? Then, teach music class!
With countless adults and children seeking music lessons, you can make good money sharing your skills. Offer piano lessons, guitar instruction, drumming, or any instrument you excel in. You can use platforms like Skillshare or provide private lessons.
On average, music instructors can charge anywhere from $40 to $100 or more per hour for online lessons depending on how advanced the lessons are. Sharing your passion for music while making money sounds like music to the ears, doesn’t it?
32. Sell on eBay
Have you ever visited a garage sale? Turn those finds into a profitable hustle by selling on eBay. eBay is an excellent platform for selling a wide range of items.
Some personal successes include flipping items like electronics, old iPods and iPhones, sneakers, and furniture. Successful eBay selling boils down to recognizing profitable items and securing a bargain purchase.
Are you ready to flip and fill your wallet with extra cash? You could sell on Facebook Marketplace, too.
33. Reselling on Amazon
Reselling products on Amazon is the trend of the hour. Scout for items cheaper in your area than online, including toys, limited edition shoes, or seasonal delicacies.
Consider trying dropshipping to curate your product lineup without worrying about inventory. Armed with just an Amazon seller account and a keen eye for trends, you can dive into this lucrative venture!
34. Start A Freelance Business
Have niche skills? Time to cash them in by freelancing. This is a booming market.
Bid on projects that resonate with your skill set: graphics, writing, social media management, website design – you name it! Going freelance offers flexibility, and autonomy and can bring in some serious cash.
Be sure to create a compelling portfolio to attract clients and make sure you have solid reviews.
35. Play Games Online
Game on, fellas! Who said you can’t turn your gaming hobby into a money-making machine?
You can pocket money by playing games like Blackout Bingo and Solitaire Cube.
Just remember you can win real money, but you can suffer losses as well. Also, be sure to check if cash tournaments are available in your region.
36. Watch Videos Online
Do you enjoy watching videos? You can earn while indulging in your favorite pastime! Platforms like InboxDollars and MyPoints offer cash rewards for watching videos. Plus, you can claim a $5 sign-up bonus on InboxDollars.
While the earning potential might be relatively low, it’s a seamless background activity. You can make money while relaxing on the couch. So, why not unwind with your favorite video content and get paid for it?
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37. Start a Podcast
Do you have a passion for conversation? Starting a podcast is not just about speaking your mind; it’s a captivating path to potential profit.
With over 177 million podcast listeners in the U.S. alone, your words have a vast audience waiting to tune in.5
Dive into topics like BBQ techniques, current events, or life’s twists and turns, and you might be surprised to know that top podcasters earn money with sponsorships.
38. Delivery Gigs
Do you love driving, but want to limit contact with people? Consider delivery gigs.
Food delivery apps like DoorDash, Uber Eats, and Instacart can pad your wallet. You can make deliveries on your schedule while retaining control over when and where you work.
These gigs typically pay $15 to $20 per hour, plus tips. Some companies even allow bicycle deliveries for a bit of exercise. Deliver your way to financial success with this flexible side hustle.
39. Start a YouTube Channel
Do you have a passion for digital creativity? Consider starting a YouTube channel – the “king of side hustles.”
Use your unique perspective to engage viewers, whether through personal vlogs, tech reviews, or evergreen content. The potential is boundless.
YouTubers earn money from ad revenue and sponsorships. With a staggering number of users on YouTube, why not tap into this vast audience?
Established channels can rake in thousands per video. However, remember that channel success hinges on content quality, relevance, and consistency. Get behind the camera and share your creativity with the world!
40. Freelance Writing
If you have a way with words, freelance writing is an attractive side hustle. Typically, writing is the most sought-after freelance service.
You can choose from various writing niches, including copywriting, blog writing, ebook, social media content creation, or creating detailed reports. Impress clients with samples of your best work.
For many, this was the first step before they went into to the world of blogging.
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42. Take Online Surveys
Have some free time and a reliable internet connection? Consider taking online surveys.
Websites like Swagbucks, Panel Place, or Survey Junkie are on the lookout for your opinions. It’s simple: sign up, share thoughts, and cash out! Look out for the highest-paying survey sites to maximize your profits.
Taking online surveys can typically amount to around $50 to $200 per month, depending on the frequency and length of surveys taken.
While it won’t make you a fortune, it’s an easy way to make a couple extra bucks during downtime. Start voicing your opinions for money today!
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43. Find a Flexible Part-Time Job
Finally, a part-time job can provide a steady cash stream.
Right now, you can find hiring signs everywhere! This is a great way to trade your time and make a little bit over minimum wage.
Apply to those vacant positions now, and sail towards extra cash!
Striking the Balance: Juggling Regular Jobs and Hustles
This is where my husband is always the most concerned because juggling your full-time job along with your side hustle can be tricky. Even more so, if you have a family.
The key is to create a feasible schedule that allows you to manage both without affecting the quality of work.
Keeping a time log can help identify how you can spare time for your hustle. Remember, side hustles should not hinder your regular job.
The goal is to make extra money, but not lose precious time with your family, so you must strike that balance for a smooth side-hustling journey. It’s all about dedication, time management, and commitment.
Now, are you ready to toss that juggling ball up in the air?
Frequently Asked Questions about Side Hustles
Personally, we feel the most profitable side hustles for men is real estate investment, followed closely by trading stocks and options.
These side hustles have a higher amount of money needed to start investing. So, we decided to consider your skills and interests to make a big impact now.
Making an extra $2000 a month is a game of adopting multiple hustles or honing in and being successful with one.
More importantly, it’s all about identifying your strengths, and interests and leveraging opportunities from there. Keep grinding, and you’ll find that fortune favoring your extra efforts!
Earning an extra $1000 a month might seem daunting, but it’s definitely achievable. Combining side hustles like driving for DoorDash, medical research studies, and flipping items can help you hit that target. Remember, the key lies in maximizing your skills, and efficiency, and choosing the right hustles. Embark on your side-hustling journey today and watch as your bank account flourishes!
Which Side Hustle for Guys Do You Like?
Now that we’ve explored these exciting side hustle opportunities, it’s time for you to take action. Which one resonates with you the most?
To truly excel in the world of side hustles, it’s crucial to approach your ventures with the right mindset. Your skills, hobbies, and interests should align with your chosen hustle, ensuring that you’re not just chasing dollars but pursuing something that genuinely excites you.
Remember that side hustles require time, commitment, and sometimes an upfront investment. The higher you’re willing to climb, the better your view (and the payouts) will be!
Don’t wait any longer. Start your side hustle journey today, and unlock the door to financial freedom and personal fulfillment.
Source
CNBC. “21-year-old spent $300 to start his sticker side hustle—now it brings in up to $38,000 a day: I was ‘unprepared’ to go viral.” https://www.cnbc.com/2023/10/30/how-sticker-side-hustle-invalid-jp-went-tiktok-viral-became-lucrative.html. Accessed October 30, 2023.
CBS News, “Youth sports referee shortage grows amid aggression from parents, coaches.” https://www.cbsnews.com/philadelphia/news/youth-sports-referee-shortage-grows-amid-aggression-from-parents-coaches/. Accessed October 30, 2023.
Census.gov. “Nearly 68 Million People Spoke a Language Other Than English at Home in 2019.” https://www.census.gov/library/stories/2022/12/languages-we-speak-in-united-states.html. Accessed October 30, 2023.
Express. “‘Anyone can do it’ Man shares unusual way to make money without leaving home.” https://www.express.co.uk/finance/personalfinance/1623166/money-making-tips-earn-from-home-fat-llama. Accessed October 30, 2023.
Exploding Topics. “Number of Podcast Listeners.” https://explodingtopics.com/blog/podcast-listeners. Accessed October 30, 2023.
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The jobs report today which should move mortgage rates lower, demonstrates why it’s time for the Federal Reserve to land the plane. The labor market doesn’t show wages spiraling out of control as it did in the 1970s because the inflation data doesn’t look like anything in the 1970s.
We had a solid job openings print this week and jobless claims are still near historic lows. Today’s labor data isn’t the cleanest report with labor strikes in different sectors and we did get significant negative revisions. But, job growth is returning to its average pace. Remember, if we didn’t have COVID-19 and job growth stayed on trend with population growth from February of 2020, we easily should have between 157 million – 159 million total people employed, and today we are at 156,930,000.
From BLS: Total nonfarm payroll employment increased by 150,000 in October, and the unemployment rate changed little at 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, government, and social assistance. Employment declined in manufacturing due to strike activity.
Here’s a breakdown of the jobs gained and lost in today’s report:
In this job report, the unemployment rate for education levels looks like this:
Less than a high school diploma: 5.8%
High school graduate and no college: 4.0%
Some college or associate degree: 3.1%
Bachelor’s degree or higher: 2.1%
Wage growth has been slowing down since January of 2022, which is a big slap in the face to everyone saying that wage growth can’t slow down unless people lose their jobs. Today’s 4.1% year-over-year growth data is lower than the 6% plus wage growth data we saw in January of 2022.
The other labor data lines were fine this week: nothing is breaking, but put them all together, and the labor market is returning to normal. Job openings data is roughly at 9.6 million, but the quits percentage is back to pre-COVID-19 levels. That’s essential because the Fed doesn’t want people to quit their job for higher wages. Jobless claims rose more than anticipated, but this is historically low.
The 10-year yield has had a crazy week, heading lower before the jobs report as we can see below.
As I write this article, the 10-year yield is at 4.53%, and mortgage rates are heading lower! Softer labor data will send rates lower. Looking at the history of economic cycles, usually when the Fed is done hiking rates, bond yields head lower with mortgage rates. The Fed made a big mistake by being too hawkish in its October meeting, which sent bond yields (and mortgage rates) much higher and made policy more restrictive
Overall, the labor market is getting back to normal. This is why, for a long time, I have targeted that 157 million to 159 million level as the baseline level for job growth, reflecting the slower growth rate of our population. We had a global pandemic, which did not throw us back to the 1970s, and in time, we are returning to normal.
We don’t need to create a job-loss recession for some code of honor that doesn’t exist among Federal Reserve members, we just need to endure.
The US housing market looks like it’s headed for a recession, Wells Fargo has said.
Mortgages spiking to nearly 8% would cause homebuying to plummet, the bank says.
Strategists compared the situation to the 1980s when interest-rate hikes put pressure on the property market.
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research note last week.
“Although mortgage rates may gradually descend once the Federal Reserve begins to ease monetary policy, financing costs are likely to remain elevated relative to recent norms,” they added. “A ‘higher for longer’ interest rate environment would likely not only weigh on demand, but could also constrain supply by reducing new construction and discouraging prospective sellers carrying low mortgage rates from listing their homes for sale.”
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The average 30-year fixed-rate mortgage has climbed from under 4% to just shy of 8% since the Fed started tightening in March 2022, data from Freddie Mac shows.
Higher borrowing costs have driven a decline in the construction of new US houses, further tightening a supply-starved market and encouraging many existing homeowners to stay put to cling to historically low rates they’d previously locked in. Just 1% of Americans sold their houses during the first half of 2023, data from Redfin showed.
In the 1980s, the Fed’s aggressive war on inflation drove 30-year mortgage rates as high as 19% — prompting homebuilders in Jackson, Mississippi, to send the central bank’s chair, Paul Volcker, lumber with the inscription: “Help! Help! We Need You. Please Lower Interest Rates.”
The Wells Fargo economists compared that desperate plea to a letter that the National Association of Realtors, Mortgage Bankers Association, and National Association of Homebuilders sent the Fed’s board of governors earlier this month. The three groups called the chair, Jerome Powell, to make clear that he was calling time on the bank’s current rate-hiking campaign.
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“The plea for assistance from housing industry participants, both in the early 1980s and more recently, illustrates the severe impact higher interest rates can have on the residential sector,” Dougherty and Barley wrote.
“After perking up at the start of year, nearly every facet of housing activity has shown signs of relapse as the Fed has maintained a restrictive policy stance and mortgage rates have breached 7%,” they added, referring to the fact that home sales, mortgage applications, and indices tracking homebuilder confidence have all declined in recent months.
Known as the hidden treasure of the Midwest, North Dakota is full of natural beauty, historic allure and modern conveniences. As more people discover the benefits of residing in the Peace Garden State, pinpointing the best places to live in North Dakota becomes increasingly essential. From cities steeped in history and picturesque towns beside expansive lakes to thriving economic centers, this state presents a ton of pristine living options.
Population: 126,748
Average age: 31.4
Median household income: $60,243
Average commute time: 15.0 minutes
One-bedroom average rent: $976
Two-bedroom average rent: $1,044
Often heralded as one of the best places to live in North Dakota, Fargo strikes an impressive balance between traditional midwestern charm and a forward-thinking atmosphere. With North Dakota State University fueling the city’s innovative spirit, the city simultaneously retains its historic heart, showcased in the well-preserved downtown architecture and the timeless appeal of the Red River Valley Fair.
There’s never a dull moment in Fargo, thanks to its eclectic mix of theaters, art galleries and events that rival much larger cities. The winters, though cold, come alive with community-led ice skating and snowboarding, while the warmer months are replete with lively street fairs and farmers markets. Foodies, too, find solace in Fargo’s evolving culinary scene, where traditional American fares comfortably coexist with international delicacies.
Population: 74,138
Average age: 37.4
Median household income: $75,715
Average commute time: 18.3 minutes
One-bedroom average rent: $995
Two-bedroom average rent: $1,030
As the state’s capital, Bismarck is the hub of political activity and offers residents the opportunity to engage closely with the state’s governance. The iconic Art Deco state capitol building, often referred to as the “Skyscraper on the Prairie,” stands as a testament to the city’s deep-rooted political legacy while overlooking the picturesque Missouri River.
The city’s parks and trails offer endless exploration possibilities throughout the changing seasons. A ton of local eateries serve everything from hearty North Dakotan classics to contemporary dishes, while local theaters and events keep the community spirit alive and buzzing. Hoping to get away for a weekend? The Bismarck Airport gives you access to the rest of the country in mere hours.
Population: 58,781
Average age: 29.4
Median household income: $53,611
Average commute time: 13.1 minutes
One-bedroom average rent: $925
Two-bedroom average rent: $1,125
Celebrated as one of the best places to live in North Dakota, Grand Forks masterfully combines a strong academic focus with a touch of classic Midwestern charm. Home to the University of North Dakota, the city enjoys the youthful energy and innovation associated with a collegiate atmosphere, resulting in a thriving local arts scene, cutting-edge research initiatives and an influx of diverse perspectives.
The Red River, which gracefully meanders through the city, provides a scenic backdrop for a range of recreational activities, from serene riverside picnics to invigorating water sports. Downtown Grand Forks is a delightful blend of historic buildings, contemporary shops and quaint restaurants that offer everything from traditional comfort foods to more avant-garde culinary experiments. Seasonal events, like the Greenway Takeover Festival, have solidified Grand Forks’ reputation as a community that knows how to come together and celebrate.
Population: 47,789
Average age: 32.1
Median household income: $68,543
Average commute time: 18.4 minutes
One-bedroom average rent: $935
Two-bedroom average rent: $1,015
Minot has a captivating mix of military significance, due to its proximity to Minot Air Force Base, and the warmth of small-town living. Dubbed “Magic City” because of its meteoric growth during the railroad era, Minot remains a beacon of rapid development and dynamism, giving residents an environment of opportunities and progress.
Scandinavian Heritage Park stands as a unique testament to the city’s rich ancestral ties, displaying enchanting replicas and monuments from Nordic countries, a nod to the region’s strong Scandinavian influence. Meanwhile, the annual North Dakota State Fair in Minot is an event like no other, drawing crowds from all across the region.
Population: 27,332
Average age: 30.9
Median household income: $75,061
Average commute time: 14.6 minutes
One-bedroom average rent: $825
Two-bedroom average rent: $995
Williston serves as a crucial nexus of the state’s thriving energy industry due to its position within the Bakken oil fields, making it attractive for young people looking for employment opportunities and relatively low home prices. This energy hub is not just about industry; it presents an intriguing blend of historical significance and a pulse of modern growth. The city has experienced waves of expansion and opportunity, all while maintaining a communal atmosphere that welcomes longtime residents and newcomers alike.
The city’s location near the confluence of the Yellowstone and Missouri Rivers provides a scenic landscape for various outdoor activities, from fishing trips to tranquil riverside contemplations. Moreover, local events, like the Band Day Festival, showcase the city’s commitment to community engagement and celebration.
Population: 25,167
Average age: 32.6
Median household income: $70,391
Average commute time: 15.2 minutes
One-bedroom average rent: $900
Two-bedroom average rent: $1,000
Consistently acknowledged as one of the best places to live in North Dakota, Dickinson is a gem situated at the gateway to the ruggedly beautiful Theodore Roosevelt National Park. The city seamlessly intertwines its rich past as a historic railway stop with its present-day significance in the energy industry, primarily due to its location within the Bakken oil formation. This combination ensures a dynamic local economy while preserving the charm of its heritage.
Outdoor enthusiasts consider Dickinson a true haven, given its proximity to the Badlands, which offers a striking landscape for hiking, horseback riding and wildlife spotting. Within the city limits, the Dickinson Museum Center showcases impressive prehistoric finds, a nod to the region’s fascinating geologic history.
Population: 24,447
Average age: 35.6
Median household income: $74,341
Average commute time: 17.7 minutes
One-bedroom average rent: $925
Two-bedroom average rent: $1,100
Mandan possesses a distinctive allure rooted in its rich history and scenic landscapes. As the seat of Morton County, this town has deep historical ties, especially with the indigenous tribes of the area, and remnants of this legacy can be found in places like Fort Abraham Lincoln State Park, once the home of the 7th Cavalry.
The city’s picturesque setting along the banks of the Missouri River presents countless opportunities to enjoy the great outdoors, from boating to fishing, ensuring residents are never short of nature-infused activities. Downtown Mandan offers a delightful selection of shops, restaurants and events, bringing the community together in celebration and camaraderie.
Population: 15,750
Average age: 37.9
Median household income: $49,038
Average commute time: 12.2 minutes
One-bedroom average rent: $790
Two-bedroom average rent: $780
Affectionately known as “Buffalo City,” Jamestown earned its moniker thanks to the presence of the National Buffalo Museum. This connection is made even more tangible by the presence of a live herd, including the famous rare white bison, residing on the edge of the city.
But the bison isn’t Jamestown’s only claim to fame. The city is adorned with the Jamestown Reservoir and its series of lakes, giving residents and visitors ample space for boating, fishing and kicking back under the North Dakota sun. Meanwhile, the historical 1883 Stutsman County Courthouse provides a glimpse into the area’s past, reflecting the city’s enduring commitment to preservation.
Population: 6,559
Average age: 39.7
Median household income: $54,629
Average commute time: 15.4 minutes
One-bedroom average rent: $470
Two-bedroom average rent: $590
Recognized as one of the best places to live in North Dakota, Valley City carries the charming title of “City of Bridges” with pride. This nickname comes from the many historic bridges that span the Sheyenne River, each with its unique design and story, creating picturesque vistas throughout the town. These bridges not only serve as functional connectors but also as a symbol of the city’s commitment to preserving its architectural legacy while fostering connections among its residents.
Surrounded by the scenic beauty of the Sheyenne River Valley, the city provides a tranquil environment complemented by resources for fishing, hiking and more. Valley City State University adds to the town’s dynamic energy, infusing it with academic prowess and events.
Population: 7,182
Average age: 40.7
Median household income: $40,037
Average commute time: 14.3 minutes
One-bedroom average rent: $565
Two-bedroom average rent: $645
Devils Lake holds a magnetic appeal with its beautiful lake and the plentiful outdoor adventures it offers. The town is enveloped by the stunning beauty of the Devils Lake Basin, which not only provides a haven for anglers, boaters and nature enthusiasts but also reflects the town’s resilient spirit in adapting to the lake’s fluctuating water levels.
The community in Devils Lake is closely knit, with residents taking pride in their hometown, enthusiastically supporting local businesses and coming together for numerous annual events. The town’s historic downtown area, coupled with its many shops and restaurants, provides a serene setting for leisure and socializing. Education is given prominence, with the local college serving as a hub for learning and community events.
Your new North Dakota apartment awaits
North Dakota stands out as a state that seamlessly merges gorgeous vistas with dynamic communities. For those seeking a mix of nature, history and modern attractions, North Dakota is a top contender.
The best places to live in North Dakota beautifully capture the state’s unique appeal, making every resident feel right at home. Whether you’re captivated by the historic bridges of Valley City or the fishing paradise of Devils Lake, there’s no question that there’s an apartment in North Dakota that’s perfect for you.
With mortgage rates higher than they have been in over two decades, homebuyers may be looking for alternative ways to finance their home.
An interest-only mortgage can free up some front-end cash, allowing a buyer to cheaply purchase otherwise expensive property, but it carries long-term risks that borrowers should seriously consider.
Here, CNBC Select shares everything you need to know about interest-only mortgages, including how they work and their benefits and risks.
What we’ll cover
What is an interest-only mortgage?
In a traditional loan, borrowers gradually repay the principal (the money borrowed) and the interest (the amount it costs to borrow that money).
This is slightly different in an interest-only mortgage. After a borrower takes out an interest-only loan, they are allotted an introductory grace period, during which they do not have to make payments on the principal of the loan. Instead, they only make interest payments throughout that set period.
Borrowers must then repay the loan in full, whether by lump sum or gradual monthly payments when that set period is over.
Interest-only mortgages are primarily designed for borrowers who stand to make a profit from their loan-funded purchase. For example, if you flip houses, you might take out an interest-only loan to purchase a fixer-upper, since you plan to sell the house at a higher price later. By doing so, you postpone your principal payments until you have sold the renovated house, freeing up front-end cash to make said renovations.
Several of CNBC Select’s top-ranked mortgage lenders offer interest-only mortgages, including Chase Bank and PNC Bank.
CNBC Select found PNC Bank to be the best lender for flexible loan options. PNC Bank offers interest-only mortgages to eligible borrowers with a minimum credit score of 620 and a minimum down payment of 3%. Further, the national lender offers a plethora of tailored mortgage options as well as online and in-person application processes.
PNC Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, HELOCs, Community Loan and Medical Professional Loan
Terms
10 – 30 years
Credit needed
Minimum down payment
0% if moving forward with a USDA loan
Terms apply.
Meanwhile, Chase Bank stood out for its flexible down payment options. Similar to most lenders, Chase Bank offers interest-only mortgages to eligible borrowers with a minimum credit score of 620 and a minimum down payment of 3%. Further, the company offers a wide range of mortgage terms and a number of educational resources to support their borrowers through the home-buying process.
Chase Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, DreaMaker℠ loans and Jumbo loans
Terms
10 – 30 years
Credit needed
Minimum down payment
3% if moving forward with a DreaMaker℠ loan
Terms apply.
How to calculate an interest-only mortgage payment
To calculate the payment you’ll make on an interest-only loan, multiply the loan balance by the annual interest rate, then divide by 12.
For example, say you borrow $100,000 at a 5% interest rate. Your calculation would look like this: (100,000 x .05)/12 = 416.67. This means that your interest-only payment would be $416.78 per month.
Payments will then increase to those of a typical, amortized loan, covering both principal and interest. Because your new monthly payment amount is based on the remaining principal, the payments should marginally change as you pay off the mortgage.
Benefits of an interest-only mortgage
The most obvious benefit of an interest-only mortgage is that monthly payments are initially considerably lower than of typical loans. These loans allow the borrower to make larger purchases that they would otherwise only be able to afford a few years down. Thus, interest-only loans might be a wise investment if you are expecting a significant income boost in the coming months and years.
Interest-only mortgages typically turn into an adjustable-rate mortgage (ARM) once principal payments begin, and borrowers can potentially benefit from a lower rate than the fixed-rate average.
But in the same vein, that adjustable-rate mortgage might be significantly higher than a fixed-rate traditional mortgage taken out initially, and this is one among many risks associated with interest-only mortgages.
Risks of an interest-only mortgage
Though a borrower’s monthly payments are initially temporarily lower than those of a traditional loan, there are several considerable risks.
First, if you take out an interest-only mortgage, you will not gain any equity in your home (beyond the equity of your down payment) until you begin principal payments.
Home equity is astoundingly important for your financial future. Equity is the money owed to you should you sell or refinance your home in the future. So, if you take out an interest-only mortgage with a five-year grace period, and you move out in five years, you will likely make no money from the sale of your home (unless the market has boomed exponentially since closing). Your interest-only payments will have realistically acted similarly to rent payments.
Alternatively, if the housing market goes down during your interest-only period and you try to sell your house without paying off any of your principal, you may actually owe the bank money at the time of sale.
Homeowners sometimes take out a home equity line of credit to access cash value tied up in their home’s mortgage. If you purchase your home with an interest-only mortgage, there will be less equity, or less cash, to access if you must take out a second mortgage.
Second, your monthly payments will be relatively high once you begin paying back the principal. This will cause a considerable shift in your monthly budget. Unless you are incredibly financially disciplined, you might not be able to afford these payments. Some interest-only mortgages even require that you pay off the loan in a lump sum when the introductory grace period ends.
Read the terms of an interest-only loan closely and make a sound plan for the duration of the loan. Otherwise, you might end up stuck in financial mud.
Compare offers to find the best loan
FAQs
What is an adjustable-rate mortgage?
One way that buyers can get the keys to a new home without locking in a fixed rate for 30 years is by taking out an adjustable-rate mortgage (ARM), during which interest rates fluctuate with the market through the duration of your loan. Because rates are so high right now, this can save you money in home loan interest down the road when interest rates cool.
What credit score do I need to qualify for an interest-only mortgage?
Interest-only mortgages typically require a credit score of 670 or above.
What is a home equity line of credit?
A home equity line of credit, or HELOC, is essentially a second mortgage that liquidates (usually up to 85% of your home’s equity), or the amount that you have paid toward your principal home loan. A HELOC is more commonly known as a second mortgage. Taking out a HELOC will usually cost you between 2% and 5% of the loan amount.
Bottom line
An interest-only mortgage is smart for the forward-thinking borrower who has a sound plan to make future payments. Otherwise, it makes more sense to pursue a traditional mortgage, avoiding the temptation to bite off more than your wallet can chew.
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Mortgage rates stabilized this week as the Federal Reserve decided to keep its rates unchanged Wednesday. However, mortgage rates still remain at a 23-year high.
The 30-year, fixed-rate mortgage averaged 7.76% as of Nov. 2, according to Freddie Mac‘s Primary Mortgage Market Survey. That’s down slightly from last week’s 7.79% and up from 6.95% the same week a year ago.
HousingWire’s Mortgage RatesCenter showed Optimal Blue’s average 30-year fixed rate for conventional loans at 7.692% on Thursday, compared to 7.83% the previous week.
“The 30-year, fixed-rate mortgage paused its multi-week climb but continues to hover under 8%,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “The Federal Reserve again decided not to raise interest rates, but have not ruled out a hike before year-end.
He added: “Coupled with geopolitical uncertainty, this ambiguity around monetary policy will likely have an impact on the overall economic landscape and may continue to stall improvements in the housing market.”
The dance of the 10-year Treasury yield, mortgage rates
While mortgage rates are strongly influenced by the Fed’s policy, they also react to fluctuations in the 10-year Treasury yield, which has been historically high as of late.
On Wednesday, the U.S. Treasury Department announced that it would slow the pace of its longer-debt issuance, although the issuance will still continue to climb.
Hannah Jones, economic research analyst at Realtor.com, said this will keep upward pressure on mortgage rates.
“In general, an increase in a specific bond supply leads to a pick-up in the bond’s yields as more incentive is required to induce more investors to buy up the additional supply,” Jones said in a statement. “So, the increase in debt issuance keeps upward pressure on longer-term bond yields and, therefore, mortgage rates despite the increase being smaller-than-expected.”
As a result, mortgage rates should continue to hover near 8% in November, according to Bright MLS Chief Economist Lisa Sturtevant. They might tick down slightly by the end of the year.
“No one should expect a dramatic drop in rates next year. It is a new era where the average rate on a 30-year, fixed-rate mortgage will remain around 7% through early next year before declining to 6% by the end of 2024,” she said.
HousingWire Lead Analyst Logan Mohtashami discusses this week’s Fed meeting and what to expect in mortgage rates on this episode of HousingWire Daily podcast.
The Federal Reserve is set to meet in just a few weeks on October 31 and November 1, and potential homebuyers may end up pretty spooked when all is said and done. Over the past 18 months, the Fed has made a series of interest rate hikes in an attempt to combat rising inflation. While the Fed does not directly control mortgage rates, when the Fed increases its benchmark rate, there is generally a corresponding increase to rates across the financial sector, including mortgage rates.
Though recent inflation rates have slowed from their peaks in 2022, the year-over-year inflation rate for September 2023 was 3.7%. That’s a far cry from the 2% the Fed is aiming for. This could mean that the Fed will institute another rate hike at the upcoming meeting, but it’s not guaranteed. And, either way, it could have a big impact on those who are looking to buy a home.
Start your hunt for a mortgage online today.
What will happen if the Fed raises rates?
The Fed may choose to raise rates as part of its continued effort to bring the inflation rate down. The rate that is actually being raised here is the federal funds rate — which is the rate that banks charge each other when they lend money to one another.
This will not directly raise the mortgage rates you might get when shopping for a loan to buy a house. Lenders set these rates directly, and a number of factors go into how they determine them. But the Fed’s rates are one of them. Another is the demand on the market for mortgage-backed securities. When there is high demand for these products, lenders are able to offer lower rates to borrowers.
Still, if the Fed does raise interest rates, you can probably bet on mortgage rates going up overall. In 2020 — when the Fed drastically lowered interest rates in response to the COVID-19 pandemic — the average mortgage rate was 3.10%, according to data from The Mortgage Reports. At the end of September 2023, after the run of rate hikes performed by the Fed, the average rate was 7.55%.
While correlation is not direct causation, it stands to reason that another rate hike could very well bring about higher mortgage rates for many potential homeowners.
Get started shopping for a mortgage online right now.
What will happen if the Fed doesn’t change rates?
While it seems very likely that the Fed will raise rates, there is a chance that it may choose not to this time around. The group didn’t raise rates in September and could make that same decision again.
If this happens, you’ll likely see mortgage rates stay about the same for the next few months. Again, though, it’s important to remember that mortgage rates are not directly set by the Fed, so rates could end up going up or down a bit if the Fed makes no move, but will likely stay in the same general range.
What happens if the Fed lowers rates?
First things first — it is highly unlikely that the Fed will lower rates. Until inflation is brought under control, rates will likely stay high.
On the off chance that the Fed does lower rates, though, mortgage rates will likely go down overall, with the caveat that, once again, the Fed does not directly set mortgage rates.
How to find a good mortgage rate
If you’re shopping for a mortgage, there are a number of things you can do to get the best rate possible, no matter what happens with the Fed. Here are a few things to consider:
Improve your credit score
This is the lynchpin of getting a good mortgage rate. If your credit score is high, mortgage lenders think there is a better chance of you paying them back on time and in full, so you will get a much lower rate.
Shop around
There are a lot of mortgage lenders out there. If you do your due diligence and shop around, you’ll find the best deal available. You may even be able to play lenders off each other to get a better deal.
Refinance your loan
If you already have a mortgage, you can consider refinancing when rates are better. If you want to buy a house now even though rates are high, you can refinance in a few years when the economic climate is more favorable to borrowers.
Look for a mortgage online today.
The bottom line
The Federal Reserve will be meeting in a few weeks to make a decision about interest rates. While the Fed doesn’t set mortgage rates directly, there will likely be an impact on borrowers depending on the choice they make. So, it could make sense to lock in a rate now, before the Fed makes any move to the benchmark rate, which would then have an impact on mortgage rates.
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Ben Geier
Ben Geier is a personal finance writer based in Brooklyn, New York.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Debt consolidation loans usually do not hurt your credit in the long term. Hard inquiries that occur when you apply for a loan can briefly affect your score. Conversely, making your loan payments on time can gradually improve your credit.
Debt consolidation loans usually do not hurt your credit in the long term. These loans can improve your credit by combining your debt into one account. But debt consolidation can initially knock your score down a bit, so it’s important to learn as much as possible about this strategy.
How does a debt consolidation loan work?
Debt consolidation combines multiple debts into a single loan. This reduces your overall interest and helps you organize your debt, making payments more manageable. Debt consolidation loans won’t hurt your credit in and of themselves.
However, hard inquiries that occur when you apply for a consolidation loan can temporarily lower your credit score. There are several ways to consolidate your accounts, and each method has advantages and drawbacks depending on your unique circumstances.
Personal loan
A personal line of credit, or personal loan, is available at any time and can be used to pay off debt quickly. Personal loans can improve your credit by diversifying your credit profile. Paying off debt with a loan rather than with a credit card can also reduce your credit utilization, which may improve your credit health.
Remember that this process involves taking out a loan that you must pay back on time. You may also want to reconsider this option if your current credit rating will limit you to high interest rates on personal loans.
Borrowing from a 401(k)
If you have a 401(k) retirement account, you can borrow up to half this balance as an interest-free option to pay off debt. Borrowing from a 401(k) doesn’t affect your credit, though you must repay the borrowed amount in five years to avoid penalties.
It’s important to remember what a 401(k) is for—retirement. Taking out funds for short-term debt payments can significantly detract from your retirement savings. You may also have to deal with tax repercussions when taking this action.
Home equity loan or line of credit
Home equity loans or lines of credit are perhaps the riskiest forms of debt consolidation, but they also offer some significant benefits. Lenders will offer you a loan and use your home as collateral. If you fail to pay off the loan within the amount of time agreed upon, you could lose your home.
You must have excellent credit to take out a home equity loan or line of credit. When you apply, lenders will hit you with a credit check, which could initially lower your score. The impact on your credit may not be severe, but these loans can also accumulate very high interest.
How does debt consolidation affect your credit?
Each debt consolidation method can affect your credit positively and negatively. Here are a few areas it may have a negative impact:
Credit applications: Applying for a personal loan or a balance transfer card prompts a hard inquiry to be performed on your credit. Hard inquiries can bump down your score by 5 to 10 points, and they can stay on your report for one to two years.
Average age of credit: The ages of your credit accounts matter—typically, the older, the better. Opening a new account lowers your average credit age, which may initially negatively impact your credit.
On the other hand, debt consolidation tends to positively impact the following categories:
Credit utilization: A new debt consolidation account will usually increase the amount of available credit you have. As long as you don’t begin spending significantly more after opening the new account, you’ll be using less of your available credit, which will benefit your credit.
Payment history: Consistently paying off your new loan on time will likely positively impact your credit.
Alternatives to debt consolidation
If debt consolidation doesn’t feel right for you, there are other debt relief options to help restore your peace of mind.
Balance transfer
A balance transfer lets you move debt onto a single credit card with a lower interest rate, allowing you to pay off your debts for less. Many balance transfer cards offer 0 percent APR during an introductory period, providing an interest-free window to pay off debt.
If you decide to pursue a balance transfer card to pay off debt, investigate the card’s APR following the introductory period. Your interest rate may take you by surprise and skyrocket if you don’t do your due diligence.
Debt management program
Debt management services can help by counseling you regarding your options when you’re struggling with debt. A debt management program will likely involve a counselor negotiating lower interest with creditors and potentially closing credit cards.
Visiting a debt management counselor won’t harm your credit at all. However, your credit report may reflect any debt management programs you enroll in until you no longer use them.
Debt settlement or bankruptcy
Debt settlement is negotiating with creditors to pay significantly less money than you owe to have your debt forgiven. Bankruptcy is a long-term legal process that helps people organize and sometimes eliminate their debt.
These two options should be a last resort when struggling to pay off debt, as they can have a significantly adverse effect on your credit. Both debt settlement and bankruptcy will remain on your credit report for seven to 10 years. However, if you need to take care of massive debt now and take wise financial steps in the future, these processes could ultimately be the right solution for you.
Should I consolidate my debt?
Before pursuing debt consolidation, it’s important to take a comprehensive look at the reasons you’re interested in consolidating debt and your plans for the foreseeable future.
Do you have a high interest rate?
If the interest on the debt you owe is 20 percent or more, you’ll likely save money by consolidating debt. However, certain balance transfer options charge exorbitantly high fees. Research beforehand to determine which option saves you more money.
Are you missing payments?
Keeping track of all of your accounts can be stressful. If remembering to pay your bills has been a struggle, and you’ve repeatedly missed payments, debt consolidation may help.
Consolidating your debt could simplify your financial life by allowing you to take care of all payments at once. This will also benefit your credit in the long run, since missed and late payments can harm your credit health.
Do you need excellent credit in the short term?
If you plan to take out a loan or a mortgage soon, you may need to safeguard your credit at all costs. Since many debt consolidation methods will put a temporary dent in your credit, it may be wise to hold off until after a lender has approved you.
Ultimately, whether you decide to pursue debt consolidation and which method you choose depends on the weight of your debts and what would benefit your credit most. If you’re still on the fence, it’s a good idea to consult a financial advisor before making decisions that could have long-lasting consequences.
Whatever decision you make, remember to keep your credit health at the forefront of your mind and take the steps to repair your credit to expand your financial opportunities.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial, or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Paola Bergauer
Associate Attorney
Paola Bergauer was born in San Jose, California then moved with her family to Hawaii and later Arizona.
In 2012 she earned a Bachelor’s degree in both Psychology and Political Science. In 2014 she graduated from Arizona Summit Law School earning her Juris Doctor. During law school, she had the opportunity to participate in externships where she was able to assist in the representation of clients who were pleading asylum in front of Immigration Court. Paola was also a senior staff editor in her law school’s Law Review. Prior to joining Lexington Law, Paola has worked in Immigration, Criminal Defense, and Personal Injury. Paola is licensed to practice in Arizona and is an Associate Attorney in the Phoenix office.
A higher resale value of your home is one of the many rewards for carrying out home improvements and renovations. But remodeling projects cost money, and financing them can be expensive, depending on the amount you borrow and the type of loan you use.
Options for home improvement financing include home equity loans (HELOCs), home equity lines of credit, and cash-out refinancing. These types of financing allow homeowners to borrow against the equity they have built up in their home. Other financing options are personal loans, credit card financing, and government programs. Any of these could be the best option depending on the circumstances.
Here’s what homeowners need to know about the different types of home improvement loans and what factors they should consider before settling on a lender.
1. Home Equity Loans
If you have built up equity in your home, which means you have paid off a portion of your mortgage, a home equity loan could be the right choice to finance home improvements. To find out how much equity you have, subtract the balance due on your mortgage from the assessed value of your home. For example, if your home is worth $400,000 and you owe $200,000 on your mortgage, you have $200,000 in equity. A bank will let you borrow up to a certain percentage of that amount — up to 100% in some cases.
A home equity loan acts like an additional mortgage, where the homeowner pays back the loan in monthly payments. The payments are in addition to the original mortgage payments. Home equity loans often have low fixed interest rates because the home is used as collateral for the loan. However, there are closing costs to consider that could be between 2% to 5% of the loan amount.
On the plus side, home equity loans usually qualify for the mortgage interest tax deduction as long as the funds are used to substantially improve the home.
If you have plenty of equity and need a sizable amount to finance a big project, a home equity loan could make sense. You will receive a lump sum payment, and the improvements you make may increase the value of your home.
Advantages of a Home Equity Loan
Disadvantages of a Home Equity Loan
Low interest and terms from five to 30 years
There are origination fees and closing costs
You can borrow up to 100% of your home’s equity
Funds are disbursed as one lump sum, so borrowers need to budget carefully
The interest is tax deductible
The monthly payments add to existing mortgage payments
💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.
2. Home Equity Line of Credit (HELOC)
A home equity line of credit also borrows against the equity you have built up in your home. But the funding works more like a credit card and is not distributed as a lump sum payment. A bank will allow a qualified homeowner to borrow up to a preapproved limit and then pay it back. HELOC loan terms are typically between five and 20 years.
Interest rates differ for HELOCs because they are adjustable and rise and fall over the life of the loan. However, interest is only due on the outstanding balance — the amount borrowed — not the full credit limit.
The amount you can borrow through a HELOC depends on your credit score, income, and the value of your home. Your lender can change the loan terms, too. For example, if your credit score drops during the loan term, your lender may reduce the amount you can borrow.
One advantage of a HELOC is that you can use funds from the line of credit, make payments, and then borrow again. A HELOC is a better option if you have smaller projects to do over a longer term. You can borrow as you go, only pay interest on how much you use, and avoid paying closing costs.
Advantages of a HELOC
Disadvantages of a HELOC
No closing costs
Interest rates may go up and down
Interest payments are tax deductible
Interest rates are typically higher than those for a home equity loan
You only pay interest on the amount you use
Your lender can change the amount you can borrow and the repayment terms
3. Cash-Out Refinancing
Another option to fund home improvements is cash-out refinancing. In the case of cash-out refinancing, a homeowner takes out a new mortgage that is higher than their original mortgage. The borrower then pays off the original mortgage and uses the leftover cash to fund home improvements. The amount of cash they can access depends on the equity they have in the home.
For example, let’s say the homeowner currently owes $100,000 on a $300,000 mortgage. They take out a new mortgage for $350,000, pay off the old mortgage ($300,000), and now have $50,000 left to spend on home improvements. The catch is that their new monthly mortgage payments will be higher because they have increased the size of the loan, and they will have to pay origination fees and closing costs.
Money from refinancing does not have to be used to improve a home; it can be used to consolidate debt, pay for school, or anything else the borrower wants to use it for. Also, the cash is not considered income from the IRS and is not taxable.
Cash-out refinancing may be a good option if interest rates have dropped since you took out your original mortgage. You can take out cash and pay a lower interest rate on the new loan. You might also be able to reduce the term length of your original mortgage and pay off your home loan sooner. This will be the case if the total cost of your new loan including closing costs is less than the total cost of your original mortgage.
Advantages of Cash-Out Refinancing
Disadvantages of Cash-Out Refinancing
You will still have one monthly mortgage payment
Your new mortgage will have a higher balance
You might be able to lower your interest rate and loan term
Your loan term will start from the beginning, so you will be paying off your mortgage for longer
You can use the cash for anything
If interest rates have gone up, your monthly payments may be higher
4. FHA 203(k) Rehab Loan
An FHA 203(k) rehab loan is a loan taken out at the time of the home’s purchase. These loans are typically used for a fixer-upper, when the owners need funding right away for improvements. This could be the best type of loan for home improvements for big projects. The advantages of this type of loan for the borrower are that they have funds available for improvements from the outset, and they only have to pay back one loan with one set of closing costs.
These loans are also backed by the government and come with benefits. Borrowers can qualify with a less-than-stellar credit score (typically, a minimum of 620), and the down payment expected is lower than it would be for a traditional mortgage loan (as low as 3.5%).
Two things to remember are that the renovation costs must exceed $5,000 for the borrower to qualify for this type of loan, and the closing process can take a long time. Lastly, work covered under an FHA 203(k) loan must start within 30 days of closing, and projects must be completed within six months.
This type of loan may be worth considering if you are buying a fixer-upper that requires significant work, and your credit score qualifies you for this type of loan.
Advantages of a FHA 203(k) Rehab Loan
Disadvantages of a FHA 203(k) Rehab Loan
One loan and one set of closing costs
Only old homes or homes in bad repair may qualify
Federally-backed with low interest rates and low closing costs
You are likely to be charged costly monthly mortgage insurance
You can qualify with a lower credit score
Cash must be used for specific home improvements
5. Personal Loans
If you don’t have sufficient equity in your home to take out a home equity loan or a HELOC, a personal loan is an option. A personal loan will come with a higher interest rate, adjustable or fixed, because this type of personal loan is unsecured. Your home is not used as collateral. These loans are processed much quicker than home equity loans or HELOCs, sometimes the same day.
Personal loan terms are shorter, from two to five years, which will mean higher monthly payments, and you’ll have to pay closing costs.
These loans may work if you lack equity or if you have an emergency, such as a broken water heater or HVAC system. That said, they are probably one of the most expensive borrowing options.
Advantages of a Personal Loan
Disadvantages of a Personal Loan
Fast financing
Higher interest rate than mortgage loans
You can qualify for a good interest rate even with an average credit score
Shorter terms, which increases monthly payments
Your home is not used as collateral and is not at risk
Fees and possible prepayment penalties
6. Credit Cards
A credit card can be used for financing, and it’s a fast, simple way to access funds. The amount you can spend on improvements will depend on your credit limit (although you could use multiple cards), and the interest charges are likely to be much higher than other financing options.
A credit card can be a good option if you think you can finish your renovations quickly and pay off the balance on the card. Look for cards with an introductory 0% annual percentage rate (APR). Some cards allow you up to 18 months to pay back the balance at that introductory rate. If you can pay off the balance by the deadline, that’s interest-free financing. However, check for fees and other hidden costs.
The danger here is that if you don’t pay off the balance by the end of the interest-free rate, the interest charges can skyrocket. That’s why credit cards should not be used for long-term financing.
A credit card can be a great option for home improvement financing if you can find one with a low introductory rate, low fees, and you are confident you can pay off the balance within the introductory rate period.
Advantages of Credit Card Financing
Disadvantages of Credit Card Financing
Fast financing
High interest rates, particularly after a low introductory interest rate period has expired
Some cards offer 0% introductory rates
Possibly low credit limits
Less paperwork
High fees
7. Government Assistance Programs
The federal government has grants and programs that can help homeowners pay for renovations. Two home renovation loan options are Title I loans and Energy Efficient Mortgages. Lenders for Title I property improvement loans for your state are listed on the U.S. Department of Housing and Urban Development’s website.
Title I Loans
An FHA Title 1 loan is a fixed-rate loan used for home improvements and rehabilitation. Loans under $7,500 are usually unsecured, but bigger loans may use your home as collateral. These loans may be used in conjunction with a 203(k) rehabilitation mortgage.
The maximum loan terms are between 12 and 20 years, and loan amounts are $7,500 to $60,000, depending on the home’s size and type.
The loan must be used for property improvements, and an FHA mortgage insurance premium of 1% of the loan amount will be added to your interest rate. There is no minimum credit score required, but your debt-to-income ratio may factor into your loan terms.
Energy Efficient Mortgage
FHA’s Energy Efficient Mortgage program (EEM) finances energy-efficient improvements with their FHA-insured mortgage. The borrower must qualify for the loan amount used to purchase or refinance a home. However, they’re not required to be qualified on the total loan amount that includes the amount used to finance energy-efficient improvements. The FHA insures the loan to protect the lender against loss in the event of payment default.
Starting in 2023, homeowners can also get tax credits for some energy-efficient updates, including windows, insulation, new doors, heat pumps, and air conditioners.
These types of programs will reduce the cost of financing for home improvements and are great options if you meet the criteria.
Advantages of Government-Assisted Financing
Disadvantages of Government-Assisted Financing
Low interest rates
Financing must be used for property improvements.
Broad range of loan terms
Strict qualification standards
Tax credits
Larger loans may require your home as collateral.
How to Decide the Best Type of Home Improvement Loan for You
If you’re trying to decide what home improvement loan is best for you, consider the following factors:
Are You Purchasing a Fixer-Upper?
If you are buying a fixer-upper, check if you qualify for either an FHA 203(k) rehab loan or a government-assisted program. You may get cheaper financing this way.
Do You Need Funds Right Away?
If you need funds quickly — for example, you have a broken heat pump or HVAC system — a personal loan or credit card financing are options to explore.
Do You Have Equity Available?
If you have built up equity, a home equity loan or line of credit will provide cheaper financing than a personal loan and over a longer term, so that your monthly payments will be lower. A cash-out refinancing loan might also mean that you could lower your payments and reduce your term if interest rates have dropped significantly since you took out your original mortgage.
How to Get a Home Equity Loan
The first step in getting a home equity loan is to decide which loan is best for your situation. Next, find a lender with the best terms and fill out an application to see if you qualify.
1. Check Your Financial Health
The better your credit score, the better the loan terms will be. If you can boost your credit score before you apply for financing, you’ll boost your chances of getting a better deal. Lenders will also look at your debt-to-income ratio when setting the interest rate and term, so lowering your debt before you apply for a home improvement loan can help lower the cost of your financing.
2. Compare Lenders
You should contact a few different lenders to compare their rates and loan terms. Look for benefits, such as rate discounts for enrolling in autopay, and watchouts, such as late payment fees and minimum loan amounts.
3. Gather Documentation
You will need to submit a few basic pieces of information when you apply for a loan. As a general guide, you will need:
• Proof of income, such as W-2s or 1099s, bank statements, pay stubs, or tax returns.
• Proof of residence, such as your Social Security number and utility bills.
Your current debts, housing payment, and total income will also play a role. Be sure to have all the information your lender may need on hand when you apply to speed up the application process.
💡 Quick Tip: With home renovations, surprises are inevitable. Look for a home improvement loan with no fees required — and no surprises.
4. Apply for Prequalification
Some lenders will prequalify you, which will tell you your interest rate and how much your monthly payments will be. Prequalification should not affect your credit score, whereas a formal loan application could. Applying for too many loans in a short space of time could lower your credit score.
5. Complete the Loan Application Process
Your loan application might be fully online, via phone and email, or in person at a local branch. In cases where you are borrowing against equity, your lender may require a home appraisal. Provided your finances are in good shape, the lender should approve your application, and you’ll receive funding.
How Your Credit Affects Your Home Improvement Loans
Your credit score will affect the total cost of a home improvement loan. The higher your score, the less of a risk you pose to a lender, so the better the loan terms will likely be for a mortgage or long-term loan. The same goes for credit cards and personal loans. Also, if you have good credit, you’ll probably have an easier time securing a home improvement loan.
Can You Use Home Equity Loans for Non-Home Expenses?
Home equity loans and HELOCs are flexible and can be used for anything, not just home expenses or renovations. However, these loans are best suited for long-term, ongoing expenses like home renovations, medical bills, or college tuition.
The Takeaway
The types of loans for home improvements include loans based on the equity you have built up in your home, such as a home equity loan, a HELOC, or cash-out refinancing. You can also use personal loans, credit card financing, and government programs. Loans based on equity tend to cost less over the loan’s lifetime, but they also tend to have longer loan terms. Equity-based loans also tend to be best when you need to borrow a larger amount, because you can spread out the cost over a longer period.
A personal loan will have a higher interest rate and a shorter term, but the higher your credit rating, the better the interest rate tends to be. Alternatively, credit card financing is favorable if you need funds quickly, the amount you need is not too high, and you can take advantage of a 0% introductory rate and pay off the balance before the rate expires.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
SoFi’s Personal Loan was named NerdWallet’s 2023 winner for Best Online Personal Loan overall.
FAQ
What type of loan is best for home improvements?
The type of loan that is best for home improvements depends on your finances and how much you need to spend. If you hold a fair amount of equity and need a sizable amount of cash, a home equity loan, HELOC, or cash-out refinancing may be good options. Cash-out refinancing might be particularly appealing if interest rates have dropped, and you can refinance with better loan terms.
If, on the other hand, you have a smaller project that you expect to complete in a short timeframe, using a credit card that gives a 0% interest rate for a period could be the way to go.
What is the best renovation loan?
If you’re taking on a big project, buying a fixer-upper or planning to renovate an older home, you may want to consider the FHA 203(k) mortgage. The 203(k) rehab loan lets you consolidate the home and renovation costs into a single remodel home loan and avoid paying double closing costs and interest rates.
If your home is newer or higher-value and you have equity, cash-out refinancing can be a good option, particularly if interest rates have dropped.
Should I use a personal loan for home improvements?
Personal loans are a more expensive option for home improvements, especially if your credit score is average. However, using a personal loan for home improvements might be the best option if you don’t have a lot of equity to borrow from.
Are home improvements tax deductible?
Home improvement loans are generally not tax deductible. However, if you use a refinance or home equity loan, some of the costs might be tax deductible. Check with a CPA or tax specialist.
What credit score is needed to get a home improvement loan?
Credit score requirements for a home equity loan depend on the lender. A credit score in the mid-600s might be enough to be approved by some lenders, while others might not approve you with a score above 700. Lenders consider many factors, including your debt-to-income ratio and equity in the home, when considering you for a home equity loan.
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