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If you’re wondering how your student loan balance compares, here are the facts: The average student debt among borrowers ranges from more than $30,000 to over $50,000, depending on the kind of loans you have. Those are significant numbers, no doubt. If you are feeling the weight of your debt, you are not alone. There are currently about 45 million borrowers whose loans totaled a whopping $1.77 trillion at last count.
When you have student loans, it can be natural to think about how it compares to, say, your cousin’s, your BFF’s or your coworkers’ debt. Especially when you are feeling stressed about making your payments and paying off what you owe. “Is everyone in the same boat?” you may ask yourself.
Knowledge is power, so read on to learn more about how student loans shape up for other Americans, as well as options for managing your debt. You’ll get through this!
What Is the Average Student Loan Balance?
There are different ways to look at the data on average student loan balances. Here, using intel from the Education Data Initiative, you’ll find some important statistics so you can see how your student loan balance may compare to others.
• The average federal loan debt is $37,338 per borrower.
• The average private loan debt is $54,921 per borrower.
• The average student borrows more than $30,000 towards their bachelor’s degree.
• 92% of borrowers with student loan debt have federal loans.
• The average graduate student loan debt is $76,620 among federal borrowers.
• For those with master’s degrees, the average debt is $83,651; among those with PhDs, the figure is $125,276.
• As for Parent PLUS loans, the average amount of debt is $29,528, according to the most recent years studied.
Are you curious about how debt aligns with age? Here are additional figures to know.
• Those borrowers age 30 have the highest average outstanding student loan debt, totaling $42,822 per person.
• 34% of those ages 18 to 29 have student loan debt.
• Borrowers under age 40 account for 55% of all student loan debt.
• Borrowers ages 40 to 49 owe 22% of America’s student loan debt balance.
Wondering how gender plays into student loan debt? Approximately 66% of debt belongs to women. The rest is borrowed by men. The data does not yet reflect nonbinary borrowers but will likely do so in the future.
If you are wondering how race correlates to student loan debt, these figures will shed some light on that angle:
• Black college graduates owe on average $25,000 more in student debt than White graduates.
• When checked four years after graduation, Black borrowers had student loan balances 188% higher than those of White borrowers.
• Asian college graduates are the fastest to repay their debt.
• Asian borrowers are also the most likely to earn a salary that exceeds their student loan balance.
Here’s a look at how student loan debt adds up by geographic location:
• Borrowers in Washington, DC, have the top spot in terms of their average federal student loan balance at $54,945.
• Borrowers in North Dakota have the lowest average federal student loan debt at $28,604. North Dakotans who take out these loans also have the distinction of living in the only state where borrowers have an average balance under $30,000.
• The state with the highest percentage of borrowers with student loan debt is Washington, DC (not exactly a state, but still) at 17.2%. Hawaii earns the honor of state with the lowest figure. Only 8.4% of residents have student loan debt.
💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.
Other Student Loan Statistics
As you read these figures, you probably recognize that many other people are dealing with student debt, and considerable amounts of it in many cases. While you are thinking about how your student debt compares to others’, take a look at a few other interesting statistics:
• The average student borrower takes 20 years to pay off their loan debt.
• Some professional graduates can take more than 45 years to pay off all of their student debts.
• At any moment, an average of 7% of student loans are in default. That’s about 4 million loans going into default per year.
• In 2023, the amount of student debt that was forgiven was less than 1% of the total student loan debt balance. Only 18.4% of eligible student loan borrowers apply for forgiveness.
Here’s something else to consider. If you’re getting ready to pay back what you owe or are already making your payments, you likely know how much you originally borrowed. But how can you tell what you owe with accumulated interest added on? Keep reading to learn more.
How to Check Your Student Loan Balance
Student loans come in two broad types, federal and private. Federal loans are either subsidized or unsubsidized. If it’s the former, then the government has been paying your interest while you’ve been in school. You only become responsible for interest when you’re no longer in college (and after your six-month grace period).
With unsubsidized loans, the interest will accumulate on the amount you borrowed while you’re still in school. You’re responsible for paying that interest from the moment your unsubsidized loan is disbursed.
Federal Student Loans
To find out what you owe in federal loans, you can check your federal student loan balance at StudentAid.gov. It will also show you how much of your loan balance is subsidized versus unsubsidized, along with other types of useful information.
You’ll need to create an account (if you haven’t yet done so) and use your FSA ID to log in and get the information you need.
Private Student Loans
For private student loans, you’ll need to contact the lender that gave you the funds to find out how much you owe. If you borrowed from more than one private lender, you’ll need to contact each one individually.
While federal loans typically come with a six-month grace period, check with each private lender, if applicable, to see if you have a similar grace period with them.
How to Manage Student Loan Debt
Once you know your total balance, then it’s time to figure out some strategic ways to pay back the balance. You want to still be able to enjoy postgrad life while eliminating those student loans.
Federal Repayment Programs
The federal government offers forgiveness programs, and, if relevant to your situation, you may get a portion of your remaining debt forgiven — meaning, you wouldn’t have to pay it back. It’s important to check to see which federal programs currently exist and see if you may qualify.
Some options to consider:
• While the Standard Repayment Plan is the typical default repayment plan offered by the federal government, there are different federal student loan repayment options available that can have longer terms — but you have to request one. If you choose an option with a longer term, this will likely lower your monthly payment, but increase the amount of interest you’ll pay over the life of your loan. You might look into the Graduated and Extended Repayment Plans offered for federal loans.
• A federal Direct Consolidation Loan can allow you to combine federal loans into one payment to lower the monthly amount due, simplify your personal finance management, and/or access federal forgiveness programs. (Note: This is not refinancing with a private lender; that will be covered in a minute.)
• There are also income-driven repayment plans for federal student loan balances where payments are capped, based on your income. There are likely qualifying factors you’ll need to know about. If you consistently make payments for a specified number of years, depending upon your modified agreement, any remaining balance could be forgiven. (One potential downside is that loan amounts forgiven under this program can be taxed as income by your state.).
The income-driven plans you may qualify for are:
◦ The SAVE Plan (this replaces the REPAYE plans and comes fully available on July 1, 2024)
◦ The PAYE Plan
◦ The Income-contingent Repayment Plan, or ICR
◦ The Income-based Repayment Plan, or IBR a minute.)
◦ You might also look into the Public Service Loan Forgiveness (PSLF) Program where people who work in public service occupations may qualify for 100% forgiveness after making 120 on-time, qualifying payments.
Among the qualifying requirements, you would need to be employed full-time at an eligible governmental agency (federal, state or local) or at another designated organization, such as a 501(c)(3) nonprofit (not religious).
💡 Quick Tip: Federal parent PLUS loans might be a good candidate for refinancing to a lower rate.
Options for Private Student Loan Borrowers
If you have borrowed private student loans, sorry: None of the above options are available, nor can you refinance a private student loan with a federal one. But don’t feel discouraged, there are still repayment options.
• You can see what offers you qualify for from other lenders. Depending on such factors as your credit score and loan term, you might be able to get a deal you prefer with a different lender. In other words, you are refinancing private loans with another private loan. (Just keep in mind that when you refinance a loan for an extended term, you typically pay more interest over the life of the loan.)
• You might check with your employer and see if they offer any student loan repayment assistance. Some employers (though far from the majority) offer this as a benefit.
• If you are truly struggling to make your loan payments, you might talk to your lender about what flexibility there may be in terms of your loan’s interest rate and/or repayment term. Meeting with a nonprofit credit counselor who is knowledgeable about student loans can be another helpful step.
Student Loan Refinancing
You’ve just read about private student loans and possibilities for refinancing them. Earlier in this article, you also learned about federal Direct Consolidation student loans. There’s one other option that you may want to consider as you manage your student loans and work to pay them off: refinancing federal student loans with private loans.
In this case, your federal loans are paid off with funds from a new loan secured from a private lender, which hopefully offers a more manageable monthly payment.
Two important points:
• When you refinance a federal student loan with a private one, you forfeit federal benefits and protections, such as forbearance and forgiveness.
• If you refinance for an extended term, it could mean that you pay more interest over the life of the loan, though your monthly payments may be more manageable for your budget.
If you’re considering this path, it can be wise to spend a bit of time with an online student loan refinance calculator to see how different options might play out. That can help you get on the best path to being debt-free based on your own particular circumstances.
The Takeaway
Student loans are a fact of life for more than 45 million Americans, and repaying them can be a challenge. As you look at your debt and repayment plan, it can be helpful to see how you compare to others who are also carrying this kind of loan. Average balances are currently in the range of $35,000 to $55,000 per borrower (or higher), so you may find that your situation is similar to many of your peers’.
However, just because student debt is common doesn’t mean it’s easy to pay back. So consider your repayment alternatives carefully and find the right fit for your needs. While it takes focus and patience, you can find a path to be done with your student debt.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
SoFi Student Loan Refinance If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.
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Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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VantageScore® 3.0 is a credit scoring model that each of the three major credit bureaus uses to determine your creditworthiness.
VantageScore 3.0 is a popular credit scoring model that helps to reflect a person’s creditworthiness. VantageScore® and the FICO® score model help banks and lenders determine if they’ll offer credit cards and loans to applicants.
Understanding the factors that lower and raise your VantageScore can qualify you for better opportunities in the future. We’ll explain what VantageScore 3.0 is and how it works so you can work to improve your credit.
Table of contents:
How does VantageScore 3.0 compare to other scoring models?
VantageScore 3.0 shares multiple similarities with other popular scoring models, including VantageScore 4.0 and several iterations of the FICO scoring model. There are also certain nuances that set each model apart when comparing VantageScore vs. FICO scoring models.
VantageScore 3.0 and VantageScore 4.0 place a heavy emphasis on a person’s payment history, and they place moderate emphasis on age and mix of credit and credit utilization rates. VantageScore 3.0 does focus more on a person’s total account balances, while VantageScore 4.0 is more concerned with new credit.
FICO scores differ from VantageScore in several ways. FICO scores need six months of account activity to generate credit scores, while VantageScores just need one. Vantage Scores generally take six categories into account, while FICO scores focus on 5. Otherwise, VantageScores and FICO scores both use 300 to 850 credit ranges—and the factors they use to calculate credit scores are generally similar.
How are Vantage credit scores calculated?
If you’ve ever asked yourself, “why are my credit scores different?” learning how a VantageScore is calculated may provide clarity.
Payment history makes up roughly 40 percent of your VantageScore and can significantly increase or decrease your score based on how timely you are with your payments.
The age of your credit and how diverse your credit profile is make up about 21 percent of your VantageScore. If you have a wide range of account types and consistently make positive actions with your oldest accounts, your VantageScore will likely steadily improve.
Credit utilization composes 20 percent of your VantageScore. Your credit utilization ratio is determined by weighing how much of your available credit you’re currently using.
Your brand-new credit accounts only make up five percent of your VantageScore.
The total amount of your account balances contributes roughly 11 percent to your VantageScore. This factor is also linked to your credit utilization ratio.
Available credit makes up about three percent of your VantageScore and generally reflects how much credit you’ve taken out.
The answer to “When do credit scores update?” is a bit complex. Credit scores are frequently updated, but there’s no preset date for these updates. It’s best to regularly check your credit scores and dispute any errors that you notice.
Vantage 3.0 credit ranges
Just like a FICO credit score, VantageScores can fall between 300 and 850. However, there are subtle differences between the credit score ranges of both models. For example, a FICO credit score of 780 would be considered “very good,” while a Vantage 3.0 credit score of 780 is simply considered “good.” Here’s a full breakdown of the VantageScore 3.0 credit score ranges.
Very poor: 300 – 600
Poor: 601 – 660
Fair: 661 – 720
Good: 721 – 780
Excellent: 781 – 850
5 ways to improve your VantageScore 3.0
Consistently practicing good financial habits can improve your VantageScore over time. The following tips can help you work on poor credit and eventually reach and maintain higher scores.
1. Don’t apply for too much new credit
Each time you apply for credit, creditors will enact a hard inquiry on your account that temporarily lowers your score. If you apply for too much new credit within a set period, your credit score may sharply decline.
2. Pay down credit card balances
Account balances compose 11 percent of your VantageScore, so paying down your debt can positively impact your credit. Lowering your account balances will also improve your credit utilization ratio, especially if you target your largest balances first.
3. Try to make your payments on time
Since payment history makes up 40 percent of your VantageScore, this step’s importance can’t be understated. Strive to make all of your payments on time. Even if you can only make the minimum payment or have to pay within the grace period, you’ll still maintain good standing with your creditors.
4. Maintain your oldest accounts
Taking positive actions on your oldest accounts will have a greater impact than activity on your newer accounts. Remember that merging your oldest accounts can drastically lower your score if you ever consider using a debt consolidation service.
5. Sign up for a credit monitoring service
A credit monitoring service can maintain watch on your credit reports and clue you into any fluctuations or inconsistencies. Lexington Law Firm offers comprehensive credit monitoring services that can help you take positive steps toward improving your credit.
How can I monitor my VantageScore?
You can monitor your VantageScore by reaching out to the three credit bureaus and requesting a free credit report. You can also capitalize on credit monitoring services like the products offered by Lexington Law Firm. Get your free credit assessment today.
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.
FHA loans have been making homeownership more accessible for decades. Tailored to borrowers with lower credit, the FHA makes it possible to buy a house with a credit score of just 580 and only 3.5% down.
But home buyers aren’t the only ones who can benefit. For current homeowners, an FHA refinance may let you access low rates and home equity, even without great credit.
Not sure whether you’ll qualify for a mortgage? Check out the FHA program. You might be surprised.
Verify your FHA loan eligibility. Start here
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>Related: How to buy a house with $0 down: First-time home buyer
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA).
FHA insurance protects mortgage lenders, allowing them to offer loans with low interest rates, easier credit requirements, and low down payments (starting at just 3.5%).
Thanks to their flexibility and low rates, FHA loans are especially popular with first-time home buyers, home shoppers with low or moderate incomes, and/or lower-credit home buyers.
But FHA financing isn’t limited to a certain type of buyer — anyone can apply.
Verify your FHA loan eligibility. Start here
How does an FHA loan work?
The first thing to know about FHA mortgages is that the Federal Housing Administration doesn’t actually lend you the money. You get an FHA mortgage loan from an FHA-approved bank or lender, just like you would any other type of home mortgage loan.
The FHA’s role is to insure these mortgages, offering lenders protection in case borrowers can’t pay their loans back. In turn, this lets mortgage lenders offer FHA loans with lower interest rates and looser standards for qualifying.
The one catch — if you want to call it that — is that you pay for the FHA insurance that protects your mortgage lender. This is called “mortgage insurance premium” or MIP for the life of the loan or until the FHA home loan is refinanced into another type of mortgage. We go over this in detail below.
Types of FHA loans
FHA loans offer various options to meet different home buying needs. These government-backed loans are designed to make homeownership more accessible, especially for those with less-than-perfect credit scores or limited savings.
Each type of FHA loan is tailored to different financial situations and home buying needs. Here’s what you can expect.
Compare FHA loan quotes from multiple lenders. Start here
FHA mortgage loan
An FHA mortgage is ideal for first-time home buyers, requiring a minimum credit score of 580 for a 3.5% down payment. Those with credit scores between 500 and 579 can still qualify for a 10% down payment. These loans are popular due to their lenient credit score requirements and low-down payment options.
FHA rate-and-term refinance
An FHA refinance loan is suited for borrowers looking to improve their loan terms or lower interest rates, especially if their credit scores have improved since obtaining their original mortgage. It offers a way to adjust loan terms to better fit current financial situations.
FHA Streamline Refinance
For current FHA loan holders, the FHA Streamline Refinance provides an efficient way to refinance with minimal documentation and underwriting. It often results in lower interest rates and can potentially reduce mortgage insurance premiums. This option is advantageous for those who want to refinance without a complicated process.
FHA cash-out refinance
An FHA cash-out refinance allows homeowners to tap into their home equity, converting it into cash. It requires a minimum credit score of 620, and borrowers must leave at least 15% equity in their home after the refinance. It’s suitable for those needing extra funds for expenses or investments.
FHA Home Equity Conversion Mortgage (HECM)
HECM is a reverse mortgage for homeowners aged 62 and older, allowing the conversion of home equity into cash. It provides financial flexibility for seniors by enabling access to their home equity without selling the home.
FHA 203(k) loan
The FHA 203(k) loan is designed for home purchases requiring renovations. It combines the cost of the home and renovation expenses into one loan. Borrowers must meet specific credit score requirements and ensure that renovations are completed within six months.
FHA Energy Efficient Mortgage
This loan type allows borrowers to include energy-efficient upgrades in their FHA loan. It’s aimed at reducing utility costs and increasing the home’s environmental friendliness, thereby potentially increasing its value.
Section 245(a) loan
The Section 245(a) program is for borrowers expecting an increase in their income. It offers a graduated payment schedule that starts low and increases over time, aligning with anticipated income growth. This loan is particularly beneficial for young professionals expecting career advancement.
Check your FHA loan eligibility. Start here
FHA loan requirements
Homeownership can be a liberating experience, especially for first-time buyers. With their flexible guidelines and government backing, FHA home loans provide a welcoming path.
Understanding FHA loan requirements can make the process much easier, opening the door to a future in your ideal home.
Check your FHA loan eligibility. Start here
To be eligible for an FHA loan, applicants must adhere to specific guidelines:
The property must undergo a home appraisal by an FHA-approved appraiser.
The property must serve as the applicant’s primary residence; investment properties and second homes are not eligible.
Occupancy of the property is required within two months following the closing.
A mandatory inspection is conducted to ensure the property meets FHA’s basic standards.
There are a few more specific conditions to qualify, such as a down payment amount, mortgage insurance, credit score, loan limits, and income requirements.
FHA loan down payment requirements
FHA loans require a minimum down payment, which varies based on credit score. For credit scores of 580 and above, a minimum down payment of 3.5% is required. Borrowers with credit scores between 500 and 579 must make a 10% down payment.
FHA mortgage insurance premiums
FHA mortgage insurance premium (MIP) is what makes the FHA program possible. Without the MIP, FHA-approved lenders would have little reason to make FHA-insured loans.
There are two kinds of MIP required for an FHA loan. One is paid as a lump sum when you close the loan, and the other is an annual premium, which becomes less expensive each year as you pay off the loan balance:
Upfront Mortgage Insurance Premium (UFMIP) = 1.75% of the loan amount for current FHA loans and refinances
Annual Mortgage Insurance Premium (MIP) = 0.85% of the loan amount for most FHA loans and refinances
MIP is split into monthly payments that are included in your mortgage payment. You’ll have to pay FHA insurance for the life of the loan or if you refinance into another type of mortgage loan.
The good news is that, as a homeowner or home buyer, your FHA loan’s MIP rates have dropped. Today’s FHA MIP costs are now as much as 50 basis points (0.50%) lower per year than they were in previous years.
Also, you have ways to reduce what you’ll owe in FHA MIP.
Depending on your down payment and loan term, you can reduce the length of your mortgage insurance to 11 years instead of the entire loan.
Loan term
Original down payment
MIP duration
20, 25, 30 years
Less than 10%
Life of loan
20, 25, 30 years
More than 10%
11 years
15 years or less
Less than 10%
Life of loan
15 years or less
More than 10%
11 years
Or, you could refinance out of FHA MIP at a later date.
With FHA interest rates as competitive as they are today, refinancing could reduce your monthly mortgage payments and cancel your mortgage insurance premium if you have enough equity in the home.
Check your FHA loan rates. Start here
FHA loan credit score minimums
The minimum credit score requirement for an FHA loan is 500. However, a score of 580 or higher allows for a lower down payment. Credit scores directly impact loan terms and down payment amounts.
Debt-to-income ratio
FHA loans consider the borrower’s debt-to-income (DTI) ratio, a measure of monthly debt payments against monthly income. The FHA prefers a DTI ratio of no more than 43%, though exceptions can be made for higher ratios with compensating factors.
Income and employment requirements
There is no specific income threshold for FHA loans, but borrowers must demonstrate steady employment history. Verification includes pay stubs, W-2s, tax returns, and bank statements.
FHA loan limits
Loan limits for FHA loans vary by county. However, starting January 1, 2024, the new FHA loan limit will be $498,257 for a single-family home in most parts of the country. Limits increase for 2-, 3-, and 4-unit properties.
FHA loan rates
Interest rates for FHA loans are competitive and can vary based on factors such as prevailing market rates, borrower’s credit score, income, loan amount, down payment, and DTI ratio. Government backing often enables lenders to offer lower rates compared to conventional mortgages.
Compare your FHA loan rates from multiple lenders. Start here
Today’s rates for a 30-year, fixed-rate FHA loan start at % (% APR), according to The Mortgage Reports’ daily rate survey.
Thanks to their government backing, FHA loan rates are competitive even for lower-credit borrowers. But interest rates can vary a lot from one lender to the next, so be sure to shop around for your best offer.
FHA loan benefits
Check your FHA loan eligibility. Start here
1. Lower down payment: Just 3.5 %
For today’s home buyers, there are only a few mortgage options that allow for down payments of 5% or less. The FHA loan is one of them.
With an FHA mortgage, you can make a down payment as small as 3.5% of the home’s purchase price. This helps home buyers who don’t have a lot of money saved up for a down payment along with home buyers who would rather save money for moving costs, emergency funds, or other needs.
2. FHA allows 100% gift funds for the down payment and closing costs
The FHA is generous with respect to using gifts for a down payment. Very few loan programs will allow your entire down payment for a home to come from a gift. The FHA will.
Via the FHA, your entire 3.5% down payment can be a gift from parents or another family member, an employer, an approved charitable group, or a government homebuyer program.
If you’re using a down payment gift, though, you’ll need to follow the process for gifting and receiving funds.
3. FHA loans allow higher debt-to-income ratios
FHA loans also allow higher debt-to-income ratios.
Your debt-to-income ratio, or DTI, is calculated by comparing two things: your debt payments and your before-tax income.
For instance, if you earn $5,000 a month and your debt payment total is $2,000, your DTI is 40%.
Officially, FHA maximum DTIs are as follows.
31% of gross income for housing costs
43% of gross income for housing costs plus other monthly obligations like credit cards, student loans, auto loans, etc.
However, a 43% DTI is actually on the low end for most FHA borrowers. And FHA will allow DTI ratios as high as 50%. Although to get approved at such a high ratio, you’ll likely need one or more compensating factors — for instance, a great credit score, significant cash savings, or a down payment exceeding the minimum.
In any case, FHA is more lenient in this area than other mortgage loan options.
Most conventional mortgage programs — those offered by Fannie Mae and Freddie Mac — only allow debt-to-income ratios between 36% and 43%.
With down payments of less than 25%, for example, Fannie Mae lets you go to 43% DTI for FICOs of 700 or higher. But most people don’t get conventional loans with debt ratios that high.
4. FHA loans accept lower credit scores
Officially, the minimum credit scores required for FHA mortgage loans are:
580 or higher with a 3.5% down payment
500-579 with a 10% down payment
High credit scores are great if you have them. But past credit history mistakes take a while to repair.
FHA loans can help you get into a home without waiting a year or more for your good credit to reach the “excellent” level. Other loan programs are not so forgiving when it comes to your credit rating.
Fannie Mae and Freddie Mac (the agencies that set rules for conventional loans) say they accept FICOs as low as 620. But in reality, some lenders impose higher minimum credit scores.
5. FHA even permits applicants with no credit scores
What if an applicant has never had a credit account? Their credit report is, essentially, blank.
FHA borrowers with no credit scores may also qualify for a mortgage. In fact, the U.S. Department of Housing and Urban Development (HUD) prohibits FHA lenders from denying an application based solely on a borrower’s lack of credit history.
The FHA allows borrowers to build non-traditional credit as an alternative to a standard credit history. This can be a huge advantage to someone who’s never had credit scores due to a lack of borrowing or credit card usage in the past.
Borrowers can use payment histories on items such as utility bills, cell phone bills, car insurance bills, and apartment rent to build non-traditional credit.
“Not all lenders who are FHA approved offer these types of loans, so check with your loan officer individually,” cautions Meyer.
6. FHA loans can be up to $ in most of the U.S.
Most mortgage programs limit their loan sizes, and many of these limits are tied to local housing prices.
FHA mortgage limits are set by county or MSA (Metropolitan Statistical Area), and range from $ to $ for single-family homes in most parts of the country.
Limits are higher in Alaska, Hawaii, the U.S. Virgin Islands, and Guam, and also for duplexes, triplexes, and four-plexes.
7. FHA also allows extended loan sizes
As another FHA benefit, FHA loan limits can be extended where home prices are more expensive. This lets buyers finance their home using FHA even though home prices have skyrocketed in certain high-cost areas.
In Orange County, California, for example, or New York City, the FHA will insure up to $ for a mortgage on a single-family home.
For 2-unit, 3-unit and 4-unit homes, FHA loan limits are even higher — ranging up to $.
If your area’s FHA’s loan limits are too low for the property you’re buying, you’ll likely need a conventional or jumbo loan.
8. If you have an FHA loan, you can lower your rate with an FHA Streamline Refinance
Another advantage for FHA-backed homeowners is access to the FHA Streamline Refinance.
The FHA Streamline Refinance is an exclusive FHA program that offers homeowners one of the simplest, quickest, and most affordable paths to refinancing.
An FHA Streamline Refinance requires no credit score checks, no income verifications, and home appraisals are waived completely.
In addition, via the FHA Streamline Refinance, homeowners with a mortgage pre-dating June 2009 get access to reduced FHA mortgage insurance rates.
Verify your FHA loan eligibility. Start here
FHA loan disadvantages
What is the downside to an FHA loan? Among the numerous benefits of FHA loans, there are certain disadvantages that potential borrowers should be aware of. These drawbacks can impact the overall cost and flexibility of the loan.
Here are the downsides that you should know about FHA home loans.
FHA loan mortgage insurance premiums
One of the primary drawbacks of FHA loans is the mandatory mortgage insurance premiums. These include an upfront premium at closing, generally 1.75% of the loan amount, and ongoing monthly payments. This additional cost can make FHA loans more expensive over the long term
Loan limits
One notable limitation of FHA loans is the lower loan limits compared to conventional loans, which can be restrictive for higher-income buyers. The FHA mortgage limit for a one-unit property ranges from $ to $ for single-family homes in most parts of the country, which may not be sufficient in areas with higher property values.
Strict property requirements
FHA loans come with stringent property requirements. The purchased home must be the borrower’s primary residence and must meet specific safety and condition standards. This requirement can limit the types of properties that qualify for an FHA loan.
FHA loan alternatives
Alternative loans, like USDA and VA loans, offer distinct advantages, such as no down payment requirements, but come with specific eligibility criteria. Understanding these alternatives ensures you make a well-informed decision about the type of mortgage that’s right for you.
Conventional 97
The Conventional 97 program comes with a down payment requirement of just 3%. It stands out due to the absence of income limits and mandatory home buyer education, making it accessible to a broader range of homebuyers.
Check your conventional loan eligibility. Start here
HomeReady Mortgage by Fannie Mae
The HomeReady mortgage program is designed for low- to moderate-income families, allowing a home purchase with only a 3% down payment. Furthermore, this program permits the entire downpayment and closing costs to be covered by gifts or grants, offering significant financial flexibility.
Freddie Mac Home Possible
The Home Possible loan is notable for its reduced mortgage insurance costs compared to other similar programs. With a 3% down payment requirement and lower ongoing costs, Home Possible is an attractive alternative for those looking to save on mortgage insurance.
USDA loans
USDA loans, backed by the U.S. Department of Agriculture, are an attractive alternative, especially for moderate-income buyers in rural areas. They don’t require a down payment, which is a significant advantage. However, eligibility for USDA loans is restricted based on income and geographical limits, and not every property qualifies for this type of financing.
VA loans
VA loans are another viable alternative, particularly for U.S. military service members, veterans, and certain surviving spouses. Like USDA loans, VA loans also require no down payment. However, eligibility for VA loans is exclusive to the military community, limiting their accessibility to the general public.
FAQ: FHA loans
Can I choose between a fixed rate and an adjustable-rate FHA loan?
Yes, FHA loans offer both fixed-rate and adjustable-rate (ARM) options. A fixed-rate FHA loan provides a consistent interest rate and monthly payment for the life of the loan, ideal for those who prefer stability. An adjustable-rate FHA loan, on the other hand, has an interest rate that can change over time, typically offering lower initial rates.
Do FHA loans have lower interest rates?
FHA loans often have lower interest rates compared to many conventional loan options. This is largely due to the government backing of FHA loans, which reduces the risk for lenders. As a result, lenders are generally able to offer more competitive mortgage rates to borrowers. However, the actual interest rate you’ll receive on an FHA loan can vary based on several factors, including your credit score, loan amount, and the current market conditions. It’s always a good idea to compare rates from multiple lenders to ensure you’re getting the best deal possible for your situation.
Are FHA loans assumable?
Yes. A little-known FHA benefit is that the agency will allow a home buyer to assume the existing FHA mortgage on a home being purchased. The buyer must still qualify for the mortgage with its existing terms but, in a rising mortgage rate environment, it can be attractive to assume a home seller’s loan. Five years from now, for example, a buyer of an FHA-insured home could inherit a seller’s sub-3 percent mortgage rate. This can make it easier to sell the home in the future.
Can you buy a rental property with an FHA loan?
While you can’t buy a true rental property with an FHA loan, you can buy a multi-unit property — a duplex, triplex, or fourplex — live in one of the units, and rent out the others. The rent from the other units can partially, or even fully, offset your mortgage payment.
Are closing costs higher for FHA loans?
Closing costs are about the same for FHA and conventional loans with a couple of exceptions. First, the appraiser’s fee for an FHA loan tends to be about $50 higher. Also, if you choose to pay your upfront MIP in cash (instead of including this 1.75% fee in your loan amount), this one-time fee will be added to your closing costs. Additionally, the fee can be rolled into your loan amount.
What credit score do I need for an FHA loan?
Most borrowers will need a minimum credit score of 580 to get an FHA loan. However, home buyers who can put at least 10% down are eligible to qualify with a 500 score. Yet, each lender may have their own credit score minimums, separate to those established by the Federal Housing Administration.
What is the loan-to-value ratio requirement for FHA loans?
The loan-to-value (LTV) ratio for FHA loans typically cannot exceed 96.5%, meaning you can borrow up to 96.5% of your home’s value. This high LTV ratio is part of what makes FHA loans accessible, especially for first-time homebuyers who might not have substantial savings for a down payment.
How does PMI work with FHA loans?
For FHA loans, the equivalent of private mortgage insurance (PMI) is the mortgage insurance premium (MIP). MIP is required for all FHA loans, regardless of the down payment or loan-to-value ratio. This insurance protects lenders from losses in case of borrower defaults and is included in both upfront and ongoing mortgage costs.
What happens if I default on an FHA loan?
If you default on an FHA loan, the lender can initiate foreclosure proceedings. The FHA loan program, backed by the Federal Housing Administration, is designed to minimize the risk of defaults by offering more lenient qualification criteria. However, consistent failure to make mortgage payments may lead to foreclosure, impacting your credit score and homeownership status.
Today’s FHA loan rates
Now is an opportune time to consider an FHA loan, with current mortgage rates being historically competitive.
FHA loan interest rates are typically among the most competitive. To capitalize on these favorable rates, start by comparing offers from FHA-approved lenders.
Finding the most affordable loan could be just a few clicks away. Begin your journey towards homeownership today by exploring your options and discovering the best rates available for your financial situation.
Time to make a move? Let us find the right mortgage for you
Whether you need to finish last-minute work tasks before a vacation or connect with loved ones after being away, you might be needing an in-flight Wi-Fi signal. However, if you’re flying Hawaiian Airlines to or from the Aloha State, you might be in for a surprise.
Here’s what you need to know about Hawaiian Airlines Wi-Fi and the airlines that offer coverage over the Pacific Ocean.
Does Hawaiian Airlines have Wi-Fi?
Unfortunately, Hawaiian Airlines planes aren’t equipped with Wi-Fi yet, and that includes transpacific and inter-island flights.
However, the carrier has struck a deal with Starlink to provide broadband wireless internet to flyers in the future.
Hawaiian Airlines is planning to equip its Airbus A330, Airbus A321 neo and Boeing 787-9 aircraft with complimentary high-speed Wi-Fi run on a satellite network. Hawaiian Airlines internet service will be available on flights between the islands as well as long-distance flights to the mainland U.S., Asia and Oceania.
“When we launch with Starlink we will have the best connectivity experience available in the air,” Hawaiian Airlines CEO Peter Ingram said in 2022. “We waited until technology caught up with our high standards for guest experience, but it will be worth the wait. Our guests can look forward to fast, seamless and free Wi-Fi to complement our award-winning onboard Hawaiian hospitality.”
At this point, it’s unclear exactly when Starlink internet will be available aboard Hawaiian Airlines planes, but it’s supposed to happen sometime this year. Having said that, in-flight entertainment is available for passengers to stream on their personal device through a self-contained in-flight network.
How to stream in-flight entertainment from a personal device
Even though there’s no Hawaiian Airlines Wi-Fi, you still can stream in-flight entertainment to your personal device in two ways: a mobile app or an internet browser. You can watch new and classic films as well as TV shows on your phone, tablet or laptop.
Hawaiian Airlines app
Download the Hawaiian Airlines app to your mobile phone or tablet.
Once aboard, switch your phone to airplane mode and connect to the “Movies on HawaiianAir” network.
Open the Hawaiian Airlines app, select “More” and then “In-flight entertainment.”
Internet browser
Connect to the “Movies on Hawaiian” network.
Open your internet browser and type “www.hawaiianairlineswifi.com.”
Choose an option and watch.
Which airlines provide Wi-Fi on flights to Hawaii?
The islands of Hawaii are located about 2,400 miles from the mainland U.S., so it’s no wonder that the signal over the Pacific Ocean isn’t that strong.
Below are some of the airlines that offer Wi-Fi on flights to Hawaii. Still, when in doubt about investing in a Wi-Fi pass, ask a flight attendant whether the internet signal is reliable.
American Airlines
American Airlines offers satellite-based Wi-Fi on most aircraft in its fleet, meaning you might have luck getting coverage on your flight to the Aloha State. An in-flight Wi-Fi pass starts at $10 and goes up from there.
To check whether your specific flight offers Wi-Fi, you can check its status by entering the flight number and date of travel on this page.
Delta Air Lines
Delta Air Lines and T-Mobile have been rolling out free in-flight Wi-Fi to SkyMiles members, which is available on about 600 domestic aircraft as of last July.
Full availability on the global fleet is expected by the end of 2024. A pass costs $5 to $19 on aircraft that aren’t yet equipped with free Wi-Fi.
United Airlines
United Airlines has four in-flight internet providers: Gogo, Panasonic, Thales and Viasat. Aircraft equipped with Panasonic Wi-Fi provides the most coverage, which includes areas over the Pacific Ocean.
The following aircraft are equipped with Panasonic Wi-Fi:
United Aircraft with Panasonic Wi-Fi
Select Airbus 319.
Airbus 320.
Select Boeing 757-200.
Select Boeing 757-300.
Boeing 767-300ER.
Boeing 767-400ER.
Boeing 777-200.
Boeing 777-200ER.
Boeing 777-300ER.
Boeing 787-8
Boeing 787-9.
Boeing 787-10.
United Wi-Fi on domestic flights costs $8 or 800 miles for MileagePlus members and $10 for passengers who aren’t enrolled in its frequent flyer program.
Hawaiian Airlines Wi-Fi recapped
Although Hawaiian Airlines will be launching Starlink wireless service on its aircraft, it’s not available to passengers at the moment.
The only option you have for now is to connect to an in-flight entertainment network and stream content from your personal device. If you want to watch something else, we recommend downloading episodes of your favorite show to watch on the plane.
(Top photo courtesy of Hawaiian Airlines)
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2024, including those best for:
Patricia Marroquin/Getty Images/Illustration by Bankrate
With home prices in California among the highest in the country, owning a piece of property here likely means you’ll need to borrow some money. You shouldn’t just borrow from the first mortgage lender you find, though. Compare mortgage lenders in California to find an option that’ll help lower your costs — and stress — on the road to closing. Here are some of the best lenders in the state that have earned high marks from Bankrate and positive feedback from borrowers.
Best mortgage lenders in California
Lender
Credit requirements
Down payment minimum
Bankrate Score
Veterans United Home Loans
620 for conventional and VA loans
3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
4.9
Bethpage Federal Credit Union
620 for conventional loans, 500 for FHA loans
3% for conventional loans, 3.5% for FHA loans
4.9
Wells Fargo
620 for conventional loans
3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
4.8
First Mortgage Direct
620 for conventional loans, 580 for FHA and VA loans
3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
4.8
New American Funding
620 for conventional loans
3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
4.8
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA
Credit requirements: 620 for conventional and VA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
Where to find: Branch locations and online
Pros
Specializes in VA loans; 24/7 customer service over the phone; free credit counseling for service members
Cons
Doesn’t offer HELOCs or home equity loans; limited number of branches
Availability: All U.S. states except Texas
Loans offered: Conventional, jumbo, FHA
Credit requirements: 620 for conventional loans, 500 for FHA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans
Where to find: Branch locations and online
Pros
Displays rates online; rates tend to be lower than the national average; offers HELOCs
Cons
Must be a member; doesn’t offer USDA loans; only offers VA refinances
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA
Credit requirements: 620 for conventional loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
Where to find: Branch locations and online
Pros
Displays mortgage rates online; massive branch network; will consider non-traditional credit references in application process; offers low-down payment options to assist lower-income borrowers
Cons
Dialed back its mortgage offerings; no longer offers HELOCs; below-average customer satisfaction scores and negative past customer reviews
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA
Credit requirements: 620 for conventional loans, 580 for FHA loans and VA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
Where to find: Online
Pros
Customized online quote tool; no origination or hidden fees
Cons
Preapprovals take slightly longer compared to other lenders
Availability: All U.S. states except Hawaii and New York
Loans offered: Conventional, jumbo, FHA, VA, USDA
Credit requirements: 620 for conventional loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
Where to find: Branch locations and online
Pros
Displays current mortgage rates online; initiatives that focus on serving minority borrowers, including down payment grants; more than 170 branch locations
Cons
Not available in Hawaii or New York
How to find the best mortgage lender in California
While the best mortgage lender ultimately depends on individual circumstances and what feels “right” to you, it’s helpful to narrow down your options. Here are some tips:
Set your priorities. Do you want to talk to a loan officer in person? Do you need a faster closing? Want to apply for and track your mortgage status through an app? Consider these and other questions as you come up with your short list of lenders.
Get prequalified or preapproved. If you haven’t determined a homebuying budget, get prequalified for a mortgage first. This can help you understand how much a lender might allow you to borrow based on some preliminary financial information. If you’re ready to shop for homes, skip the prequalification and ask for a preapproval, which involves a credit check.
Ask about first-time buyer and down payment assistance. Many mortgage lenders in California work with the state’s housing finance agency to connect eligible borrowers with more affordable mortgages and down payment help. Some programs are available to both first-time and repeat buyers, too. Compare what different lenders offer and how that might impact your budget.
California conforming loan limits
Depending on the type of loan you use to purchase your home, it might be subject to conforming loan limits:
Conventional loan: $766,550 in most counties
FHA loan: $498,257 in most counties
Check out Bankrate’s county-by-county listing of conforming loan limits in California to see what applies to you.
California first-time homebuyer programs
If you qualify as a first-time homebuyer — meaning you haven’t owned a home in the last three years — see if you’re eligible for one of California’s programs designed to put purchasing a home within your reach. The California Housing Finance Agency, also known as CalHFA, offers a range of options geared toward buyers with low or moderate incomes for the area. You might be able to qualify for a loan with a low interest rate and/or a deferred loan to help cover a down payment and closing costs.
Certain cities might offer additional help, so be sure to search for municipal housing authority options, too. In Sacramento, for example, the Community Homeownership Initiative offers grants up to $22,000 for certain low-income first-time homebuyers.
To determine the best mortgage lenders by state, Bankrate evaluated lenders based on affordability, availability and borrower experience. The best lenders generally have a Bankrate Score of 4.8 or higher. Learn more about our methodology.
In a chilly winter, it’s not uncommon for travelers to flock to warm-weather destinations. For example, December was 2022’s most popular month for Canadian tourists to visit Hawaii, according to the Hawai‘i Tourism Authority’s 2022 Annual Visitor Research Report.
It’s a similar story with Caribbean cruises. According to a spokesperson at Holland America, November through March are the most popular months for the cruise line. Clearly, winter beach vacations are appealing, and some beachfront destinations are especially popular this season — seeing higher interest in 2023 than in 2022.
Chase Travel, an online site that lets customers book trips using cash or points from Chase travel credit cards, analyzed its proprietary data to find the top destinations this winter. The data included Chase Travel bookings for air or lodging between Nov. 17, 2023, and Jan. 7, 2024, and found places with the biggest year-over-year increase from last year. Then, Chase looked at beachfront destinations. Here are the top four.
Noord, Aruba (105% YoY growth)
Noord, which means “north” in Dutch, covers the northern portion of Aruba and includes tourist epicenter Palm Beach, the Bubali Bird Sanctuary and Tierra del Sol Resort and Golf. History and culture buffs might visit the California Lighthouse and Alto Vista Chapel.
Luxury-minded travelers might stay at The Ritz-Carlton, Aruba, which is among the fanciest of the Marriott brands. The property just completed an extensive renovation and upgraded all 320 rooms and suites.
Miami Beach, Florida (80% YoY growth)
Miami Beach is hardly an underrated beach city, but the appeal goes beyond its white, sandy beaches and turquoise waters.
In April, Miami earned the title of Bon Appetit’s 2023 Food City of the Year. This winter, Miami is celebrating Miami Arts, Culture and Heritage Months. The event, which runs through Jan. 31, 2024, includes discount tickets to shows, free park and museum tours, and limited-run performances such as “Cuba Under the Stars,” an outdoor musical theater show at Bayfront Park.
Roatan, Honduras (76% YoY growth)
Roatan is part of a cluster of island archipelagos located off the northern coast of Honduras, surrounded by the largest barrier reef system in the Northern Hemisphere (and second in size to Australia’s Great Barrier Reef).
Perhaps one big reason why it’s spiking in popularity: Time Magazine placed Roatan on its World’s Greatest Places 2023 list, citing its appeal to backpackers and nature lovers.
But it’s appealing to the luxury traveler, too. Among the region’s newest additions is the Kimpton Grand Roatán Resort & Spa, which opened in October 2023 as a five-star, beachfront resort. For a hefty $50 daily resort fee, amenities include coffee, an evening social hour, sunblock, plus snorkel and kayak rentals. And like all Kimpton properties, there’s no pet fee.
West Palm Beach, Florida (57% YoY growth)
West Palm Beach got even more accessible in 2023 when Brightline, a privately funded passenger rail service, began offering high-speed rail service from Orlando. West Palm Beach is the first southbound stop from Orlando after the roughly two-hour ride. (Brightline service between Miami and West Palm Beach began back in 2018.)
If you’re seeking manatees, there’s no better time to head to West Palm Beach than in the winter. According to Manatee Lagoon, a free educational tourist destination, manatee season runs from Nov. 15 through March 31.
Tips to save on a winter beach vacation
Because winter is popular for beach vacations, it can also be one of the most expensive times to travel. These tips to save on a beach vacation can help:
Visit during shoulder season: Delaying your trip until the tail-end of winter can help you capitalize on the benefits of traveling during shoulder season. For example, Florida’s shoulder season is generally late February into early March, according to Visit Florida. During that time, the snowbirds will have had their fill of sun — but spring break crowds haven’t arrived.
Avoid lodging on the beach: If you’re spending your time at the beach anyway, then booking an oceanview room might not be worth the additional cost.
For example, in Honolulu, you’ll usually find lower rates at the Sheraton Princess Kaiulani versus the opulent Moana Surfrider, a Westin Resort & Spa, Waikiki Beach. The former is situated inland one block from Waikiki Beach, on the other side of the Moana Surfrider. Yet, the two sister properties in the Marriott Bonvoy portfolio offer reciprocal benefits, including daily yoga on the Moana Surfrider’s beachfront Diamond Lawn overlooking Diamond Head. Sheraton guests can use many of the same amenities as Moana Surfrider guests (albeit at a lower price).
The appeal of the Moana Surfrider is its elegant lobby and wraparound, beachfront porch. But you can listen to the live pianist in the evening even without being a hotel guest. And while the Moana Surfrider’s breakfast buffet on the restaurant’s veranda is popular, Sheraton guests can still charge it to their room.
Pack beach necessities: Complimentary sunscreen as a hotel benefit is the exception, not the norm. As long as you aren’t planning to travel with a carry-on only, pack sunscreen from home to avoid inflated gift shop prices.
It might also be worth bringing your own snorkeling set, as rental prices can exceed the cost of buying your own gear. Rentals can run more than $50 per day, but you can buy snorkel kits from retailers like Amazon for less than half that price.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
In this article, we will take a look at the 20 best states for construction jobs in the US. If you want to skip our discussion on the construction industry, you can go directly to the 5 Best States for Construction Jobs in the US.
The construction sector serves as a significant indicator of economic activity, providing valuable insights into the overall health of an economy. Despite encountering challenges such as rising material costs and supply chain disruptions, the residential construction sector is experiencing a positive turn in 2023. According to Global Data, the size of the US construction market was $2.1 trillion in 2022. The report predicts a steady average annual growth rate of at least 4% for the next four years. The primary sectors within the US construction market include residential, commercial, industrial, institutional, infrastructure, energy, and utilities construction.
Homebuilder companies’ stocks are rising as investors anticipate Fed rate cuts. Earlier this month, the Federal Reserve indicated plans for three rate cuts in 2024. Furthermore, last week, mortgage rates dropped below 7% for the first time since August, which renewed momentum in the housing market. Popular builder stocks like Lennar Corp. (NYSE:LEN) and DR Horton (NYSE:DHI) have shown over 60% growth in 2023, while PulteGroup (NYSE:PHM) has risen by over 120%. You can check out the 13 Most Profitable Real Estate Stocks here. The positive shift in market sentiment is credited to the increasing demand for new homes, driven by buyer preferences and mortgage rate reductions that make new homes more appealing compared to used homes. This growth in demand is further supported by employment data. Unemployment in the construction sector, which reached its peak at 16.6% in March 2020, decreased to 4.8% in November 2023 after reaching 6.9% in January 2023.
Here’s what Baron Funds said about Lennar Corp. (NYSE:LEN) in its Q2 2023 investor letter:
“Our investments in homebuilder companies – Toll Brothers, Inc., Lennar Corporation (NYSE:LEN), and D.R. Horton, Inc. – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.
Year-to-date, each company has witnessed a meaningful uptick in demand to buy homes:
Home buyers continue to come off the sidelines and buy homes despite 30-year mortgage rates remaining in the 6.5% to 7.0% range. Several factors are contributing to the recent strength, including pent-up demand to buy homes and fears that mortgage rates could move higher. • The sticker shock of rapidly rising mortgage rates appears to have cooled down. Homebuilders have made homes more affordable to prospective home purchasers by offering mortgage rate buydowns to the mid-5% mortgage rate range while maintaining strong profitability margins. • A dearth of inventory in the existing home market and an overall housing supply shortage is driving home buyers to “stretch their wallet” due to fears that they could miss the opportunity to buy a home.
We remain optimistic about the long-term potential for the Fund’s investments in Toll Brothers, Lennar, and D.R. Horton for several reasons…” (Click here to read the full text)
According to the US Bureau of Labor Statistics, Wyoming, North Dakota, and Montana are identified as the best states for construction jobs on the basis of location quotient. The location quotient is a metric employed by the Bureau of Labor Statistics (BLS) to assess the level of concentration of a specific industry within a particular state in comparison to the entire nation. The industry’s overall outlook is optimistic, and the construction sector is predicted to experience significant growth throughout 2024. With this context in mind, let’s see which state has the most construction work 2023.
Aerial view of a construction site for a single family detached home.
Our Methodology
To identify the 20 best states for construction jobs in the US, we referred to the US Bureau of Labor Statistics for the latest state-specific data on location quotient and average annual salary. Location quotients are ratios that provide insights into an area’s employment distribution by industry. A location quotient higher than 1 signifies that an industry holds a larger share of local area employment compared to the national average. The 20 best states for construction jobs in the US have been ranked in ascending order of their location quotients.
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20. Texas
Location Quotient: 1.14
Average Salary: $49,760
Texas ranks 3rd in the US in terms of population growth rate as of 2023. The average annual salary for construction workers in the state stands at $49,790. Texas emerged as one of the leading states in the construction industry, adding over 21,000 jobs in 2023.
19. Nebraska
Location Quotient: 1.16
Average Salary: $51,250
In 2023, the total construction value in Nebraska’s economy amounted to $3.91 billion, with a corresponding Gross State Product (GSP) of $126 billion. The average annual salary for a construction worker in Nebraska stands at $51,250.
18. Arizona
Location Quotient: 1.16
Average Salary: $52,470
In 2023, the total construction value in Arizona reached $13.94 billion, while GSP stood at $136.2 billion. Despite the challenges in construction growth, Arizona maintained a 5-year average annual employment growth rate of 2%. Real estate and rental and leasing are amongst the top employment segments for the state.
17. Vermont
Location Quotient: 1.17
Average Salary: $52,062
The total construction value in Vermont amounted to $893.91 million in 2023, experiencing an annual growth of 1.3%. The GSP for the same year reached $30.2 billion. However, Vermont faced a challenge in employment growth, with a 5-year average annual rate of -1%.
16. Oklahoma
Location Quotient: 1.19
Average Salary: $49,820
The GSP of Oklahoma for 2023 was $195.2 billion, while the value of total construction was $4.4 billion. This was a decrease of 6.4% on an annual basis, while the five-year annualized decline was 4.5%.
15. Hawaii
Location Quotient: 1.19
Average Salary: $77,850
The contribution of total construction to Hawaii amounted to $2.64 billion. The five-year annualized growth for construction experienced a decline, contracting by 7.5%. Despite these challenges, Hawaii’s GSP remained at $76.5 billion.
14. Washington
Location Quotient: 1.22
Average Salary: $73,140
With a GSP of $577.2 billion, the value of the construction sector in the state was $21.28 billion in 2023. The five-year annual growth rate for the construction sector in the state was 3.7%. Meanwhile, the average annual employment growth rate for the state was 1%.
13. Colorado
Location Quotient: 1.24
Average Salary: $57,430
The contribution of the construction sector to Colorado’s economy was $17.41 billion, while the total GSP was $371.3 billion in 2023. This was an increase of 0.9% year on year. Over the past five years, the average annual employment growth rate in the state was 1.4%.
12. Maine
Location Quotient: 1.26
Average Salary: $52,350
Maine is at the twelfth position on our list of the 20 best states for construction jobs in the US. The average annual salary for a construction worker in the state is $52,350. Maine’s GSP in 2023 was recorded at $65.5 billion.
11. South Dakota
Location Quotient: 1.33
Average Salary: $47,170
In 2023, South Dakota’s GSP amounted to $50.5 billion. The construction sector contributed $1.43 billion to the GSP, experiencing a negative growth rate of -3.1% for the year. Over the past five years, South Dakota had an average annual employment growth of 1.0%.
10. Nevada
Location Quotient: 1.34
Average Salary: $61,570
Nevada is among the top 10 best states for construction jobs in the US. The value of total construction in Nevada was $9.08 billion during 2023, with an annualized 5-year growth rate of 0.4%. The GSP for the same period was $170.1 billion.
9. Louisiana
Location Quotient: 1.43
Average Salary: $50,350
Louisiana’s GSP was recorded at $219.1 billion for 2023. The construction sector contributed $7.08 billion to the GSP. The state experienced a five-year average annual employment growth of -0.4%.
8. West Virginia
Location Quotient: 1.47
Average Salary: $52,740
The GSP of West Virginia for 2023 was recorded at $71.7 billion, with an annualized 5-year growth rate of 0.1%. The contribution of the construction sector to the GSP was $2.28 billion. The state experienced a five-year average annual employment growth of -0.4%. The major employment sectors in West Virginia include mining, healthcare and social assistance, and manufacturing.
7. Idaho
Location Quotient: 1.48
Average Salary: $49,620
Idaho is amongst the fastest-growing US states in terms of population. Idaho’s gross state product for 2023 was $85.7 billion, with an annualized 5-year growth rate of 15.3%. The contribution of the construction sector to the GSP was $3.71 billion in 2023. The five-year growth rate for the construction sector in the state is 4.1%.
6. Utah
Location Quotient: 1.52
Average Salary: $52,380
Utah is the fastest-growing US state in terms of GSP and the second in terms of population growth. Its GSP for 2023 was $185.2 billion, with an annualized 5-year growth rate of 3.7%. The contribution of the construction sector to the GSP was $11.83 billion during 2023. Over the five-year period, the construction sector achieved a growth rate of 5.9%.
Lennar Corp. (NYSE:LEN), DR Horton (NYSE:DHI), and PulteGroup (NYSE:PHM) are some of the popular builder stocks contributing to the growth of the construction industry.
Click to continue reading and see the 5 Best States for Construction Jobs in the US.
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Disclosure: None. 20 Best States for Construction Jobs in the USis originally published on Insider Monkey.
Most people in the US have at least one credit card. These cards are a popular, convenient way to pay for items as you go about your day, tapping and swiping. They can also allow you to buy items that you can’t afford to pay for in one fell swoop, such as airfare to Hawaii or a new laptop.
But they have downsides, too; perhaps most notably, their high interest rates. At the end of 2023, one analysis found that the average interest rate was nudging close to 25%; two years earlier, the rate was hovering around 15%. That’s a considerable increase.
Here, you’ll learn more about how and why credit card payments can balloon as interest rates rise. You’ll also read advice on keeping your credit card in check, which can benefit your financial wellness.
How Interest Is Calculated
If you’re confused by all of the fine print that accompanies a credit card offer or the thought of an annual percentage rate (APR) calculation makes you wince, you probably aren’t the only one. To understand how rising rates can affect your credit card payment, it helps to understand a bit about how credit card interest is calculated.
• First, there are two types of consumer loans: installment loans and revolving credit. A mortgage, student loan, or car loan are all examples of installment loans. With an installment loan, the borrower is loaned an amount of money (called the principal), plus interest to be paid back over a designated amount of time.
• Revolving credit, on the other hand, is not a loan disbursed in one lump sum, but is a certain amount of credit to be used by the borrower continuously, up to a designated limit. A credit card is revolving credit. A borrower’s monthly payment is determined by how much of the available credit they are using at any given time; therefore, minimum payments may change from month to month.
Installment credit is sometimes easier than revolving credit to understand and calculate. First, installment loans often come with fixed rates, which means that the interest rate doesn’t change (unless you miss payments). For example, the rate on a federal student loan or a 30-year fixed mortgage won’t change, even if government-set interest rates shoot to the sun.
Revolving credit almost often has a variable rate, which means that the interest rate applied to the credit balance fluctuates.
The average rate on credit cards is quoted as an annual percentage rate, or an APR. The APR is the approximate interest rate that a borrower will pay in one year. Why approximate? The prime rate could fluctuate based on when the Fed changes the federal fund target rate. 💡 Quick Tip: Need help covering the cost of a wedding, honeymoon, or new baby? A SoFi personal loan can help you fund major life events — without the high interest rates of credit cards.
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How Credit Card Interest Rates Change
Generally, when the Fed raises the federal funds rate, it can slow economic growth because it dissuades banks from lending money — and discourages consumers from borrowing at a subsequently higher interest rate. Raising rates is also used as a technique to combat rising inflation.
While this may be a normal and natural part of an economic cycle, rising rates can be frustrating for anyone who is currently carrying a credit card balance.
Credit card interest rates have risen as a result of 11 rate hikes enacted by the Federal Reserve (the Fed) since March 2022. Although the Fed does not control interest rates on credit cards directly, credit card interest rates are often pegged against the prime rate, which changes with the federal funds rate.
What Does a Rising Prime Rate Mean for Credit Card Holders?
A change in interest rates is likely to impact anyone with a variable rate on their credit card balance. When the Fed raises federal funds interest rates, it can be expected that credit card interest rates may follow.
How much would your credit card interest rate increase? It depends on your credit card. Generally, credit cards move in sync with rate hikes, which usually happen in quarter-percent increments.
However, the Fed has said, as of the end of 2023, that they don’t plan to raise rates further in the immediate future.
How to Combat a High Credit Card Bill
Here are some ideas for battling a high credit card bill and potentially paying less in interest over time:
1. Pay More Than the Minimum Payment
If at all possible, pay off as much of your credit card balance as you can each month. Making payments greater than the minimum amount due can help reduce your balance. The faster you can work on reducing the actual principal balance on your credit card, the less interest you’ll likely pay. If you only pay your credit card’s minimum payment, you may wind up in debt longer and paying more interest in the long run.
2. Switch to a Balance Transfer Card
Balance transfer credit cards typically have 0% APR introductory offers lasting for several months to a couple of years. If you’re serious about getting rid of your debt, you could transfer your debt over to one of these cards and then actively work on paying off the debt while you’re not paying interest.
If you do this, make sure to look for a card that has no transfer fee. Beware: If the root of the problem is actually overspending, this will not be a good long-term solution. Sometimes, 0% APR cards have interest rates that jump up dramatically after the trial period is over. And the 0% APR may no longer apply if you make a new purchase on the card.
3. Negotiate a Lower Rate
You might be surprised to find out that a credit card rate can be negotiable. It may be worth giving your credit card company a call and seeing whether they can reduce your rate.
When talking to the person on the other end of the line, explain your situation, be kind to them, and see what happens. Again, this isn’t a permanent solution or a guaranteed outcome, but it could help give you a leg-up on the payback journey.
4. Sign up for Credit Counseling
You might benefit from professional credit counseling to help with your credit card debt. The National Foundation for Credit Counseling (NFCC) is a nonprofit organization that offers free and affordable advice for people who are struggling to manage debt on their own. If you’re unable to envision a path to paying down debt, it could be a good idea to ask for assistance.
5. Consider a Personal Loan
One tactic to consider in an environment where prime interest rates are rising is paying off credit card balances with a fixed-rate unsecured personal loan.
These are sometimes referred to as “debt consolidation loans” and allow a qualified borrower to pay off high-interest debt, such as credit cards, with this lower-rate personal loan. With a fixed-rate personal loan, the rate never changes (as long as payments are made on time), and it helps provide the borrower with a defined plan to pay off the debt.
If you decide to go this route, it’s a good idea to shop around to ensure that you’re getting a fair rate. You can get a personal or debt consolidation loan from banks, credit unions, and online lenders.
To compare estimated personal loan interest charges to credit card interest charges, you can use a tool like a personal loan calculator.
Shopping for a Personal Loan
Each lender sets its own terms for making these types of loans, so be sure to ask lots of questions about rates, terms, and fees.
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.
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Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
If you’re exploring career options, pharmacy might have popped up on your radar — and for good reason. Not only can pharmacists command a good salary, they also have job security, as the pharmaceutical industry is one that won’t vanish any time soon.
That said, how much does a pharmacist make? Is it worth all the trouble of going through pharmacy school to become one? Let’s find out.
What Are Pharmacists?
You’ve likely picked up a prescription or two at a pharmacy, but maybe you didn’t give any thought to the person behind the counter. This individual is your local pharmacist, and it’s their job to prepare and dispense prescription medications.
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Pharmacist Job Responsibility Examples
In addition to doling out prescription drugs, pharmacists also consult with patients, provide instructions for how to take medications, and help patients find low-cost medications. Some also give health screenings and immunizations.
Keep in mind, a pharmacist often needs to be outgoing, since their work involves speaking with patients throughout the day. If that’s not your personality, you may want to look into jobs for introverts. 💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. An online budget planner can give you the same insight into your budgeting and spending at a glance, without the extra effort.
How Much Is a Starting Pharmacist Salary?
As with most professions, pharmacists tend to earn more money as they gain more experience. But what is a good entry-level salary for pharmacists?
Pharmacists with less than a year of experience generally earn, on average, about $54 per hour. That’s $112,320 per year.
Of course, how much you actually can earn depends on where you live, what your duties are, and whether you work for an independent pharmacy or a chain. It can also help to research the highest-paying jobs by state.
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What Is the Average Salary for a Pharmacist?
Now that you see what starting salaries are for pharmacists, let’s address the next question: How much money does a more experienced pharmacist make?
Generally speaking, pharmacists are usually paid by the hour. A pharmacist with 10 years of experience earns an average of $67.05 per hour. That adds up to $139,464 per year.
What Is the Average Pharmacist Salary by State for 2023?
The amount you make will depend on where you live, among other factors. Here’s a look at the average pharmacist salaries by state, from highest to lowest.
State
Salary
California
$161,597
Oregon
$155,710
Washington
$149,466
New Hampshire
$141,041
Nevada
$140,869
Maine
$139,517
Vermont
$137,658
Delaware
$136,276
Maryland
$135,894
Connecticut
$134,175
Alaska
$134,044
Massachusetts
$131,978
Rhode Island
$131,960
New Jersey
$131,698
New York
$131,594
Pennsylvania
$129,724
New Mexico
$129,145
Wisconsin
$128,918
Minnesota
$128,502
Virginia
$128,380
Hawaii
$128,245
Arizona
$126,174
Idaho
$125,760
North Carolina
$125,068
Michigan
$124,768
Colorado
$120,986
Illinois
$120,887
Kansas
$118,122
Ohio
$117,573
Kentucky
$117,448
Indiana
$117,338
Missouri
$116,513
Nebraska
$116,366
Utah
$116,009
South Carolina
$115,570
West Virginia
$115,339
Texas
$115,089
North Dakota
$114,359
Georgia
$114,118
Tennessee
$112,879
Wyoming
$112,326
Montana
$111,924
Iowa
$110,405
Florida
$109,106
Alabama
$106,271
Mississippi
$105,677
Louisiana
$102,542
South Dakota
$100,246
Oklahoma
$98,951
Arkansas
$89,660
Source: Zippia
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Pharmacist Job Considerations for Pay & Benefits
Where you live is one factor that can determine how much you earn as a pharmacist. Your on-the-job responsibilities may also play a role. For example, there are different job titles, and each has its own set of responsibilities, requirements, and salary ranges. Examples include:
• Staff pharmacist
• Pharmacy specialist
• Clinical pharmacist
• Pharmacy manager
• Director of pharmacy
Some pharmacists may have roles and responsibilities beyond filling prescriptions, such as offering immunizations and health screenings. Some may be in charge of hiring and managing other employees. Some may work in traditional pharmacies, while others may work for companies focusing on chemotherapy, nuclear pharmacy, or long-term care.
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Pros and Cons of Pharmacist Salary
While being a pharmacist can be a rewarding job, there are potential drawbacks to keep in mind. Let’s look at some pros and cons.
Pros of Being a Pharmacist
Naturally, the high salary pharmacists tend to command may be one reason to consider this career path. Because many pharmacists get paid by the hour, they’ll be compensated fairly for their time even if they work more than 40 hours a week.
Another perk is that you may have a flexible schedule that allows you to work part-time or during certain hours. There could even be opportunities to work remotely, which may be useful if you’re working in a rural area.
You might also be able to open your own pharmacy instead of working for someone else. This brings freedom and flexibility to you as a business owner.
Finally, you’ll be a valuable member of your community, since it’s your job to help people on their path to wellness.
Cons of Becoming a Pharmacist
If becoming a pharmacist was easy, everyone would do it! For starters, you’ll need to have about six years of education after high school. And the cost of pharmacy school can range anywhere from $5,000 to $30,000 a year for an in-state public college, or $20,000 to $95,000 a year for a private school.
Depending on your financial situation, this could require you to tap into savings or take out student loans. (Creating a budget while you’re in school or just starting out can help you keep track of where your money is going. A money tracker app can help make the job easier.)
Another possible drawback? Some pharmacies may not guarantee a certain number of hours a week, and in that case, being paid hourly may not come with the big paycheck you’d expect.
Also keep in mind that some pharmacists work long hours, which can have a negative impact on your health and mental wellbeing. 💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
The Takeaway
If you’re looking for a rewarding and potentially lucrative job, becoming a pharmacist might fit the bill. You’ll help your local community get healthier, and depending on where you live and your level of experience, you could earn competitive pay, too.
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FAQ
What is the highest pharmacist salary?
The state where pharmacists tend to earn the most is California. The average annual income of a pharmacist there is $161,597.
Is it hard to be hired as a pharmacist?
Becoming a pharmacist requires six years of education after high school. The workload is challenging, and pharmacies looking to hire generally have high expectations of applicants.
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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.