As a Homes writer and interior design obsessive, I love nothing more than spending my downtime decorating or sprucing up our family home. And whether you live in a cozy apartment or palatial house, we all want to create our ideal abode. Trouble is, when you don’t know where to start, it all can all seem rather overwhelming.
While pulling a room together may seem easy on Instagram or social media, there are some basic rules and tips I’ve learned over the years. These top tips will help you achieve the right balance of functionality yet still look stylish. What’s more, these clever design ideas will instantly transform your space, regardless of size, without having to spend a fortune on an expensive renovation!
I’m obsessed with home makeover shows — and these are the 3 mistakes people always make.
1. Go big with mirrors
Large mirror in bedroom (Image credit: Shutterstock)
One of my favorite tricks is the power of mirrors. I absolutely love using mirrors in my home, and the bigger the better. Mirrors are a great way to reflect the natural light across the room, make a small room look bigger, and feel airy and more open. For effective results, lean a large mirror against a wall opposite a window so the light will bounce off it. In small spaces, opt for mirrors that go from floor to ceiling to maximise the light.
In addition, if you want to brighten a dark room, a mirrored wall will also do the trick. Wall-mounted mirrors work well to reflect light, give the illusion of a bigger space, and instantly make your room feel open and airy. More importantly, it will give your blank wall a stylish and contemporary makeover.
While glass can often be problematic if you have children and pets running around, you can choose plexiglass acrylic mirror. Bendable acrylic wall mirrors much like this Shatterproof Wall Mirror ($29, Amazon), are designed to be safer and won’t get accidentally broken or damaged.
Alternatively, if you don’t have a mirror, any reflective surface such as stainless steel, glass and metallic accessories will do the job.
2. Buy the right-sized furniture for the space
Big sofa in small space (Image credit: Shutterstock)
Have you ever bought something for your home, only to find out that it’s way too big (or small) for the room? That’s why it’s important to always check the dimensions of furniture before buying, and find a style that’s in proportion to the room. So if your space is too compact for a conventional, rectangular dining table, a circular table will take up less room.
Getting the proportion right can be tricky if you’re buying furniture/decor online, and the reality is far different from the pictures! You may find it helpful to use an AR app such as IKEA Place to get a better idea of how an item of furniture will fit into the space you have.
Another top tip is to elevate your furniture. Instead of heavy-set pieces of furniture, and cumbersome sofas — especially in compact rooms, choose sofas and armchairs with narrow arms, and raised on taller legs. The trick here is when you see more floor underneath, it will give the illusion of a bigger room, and allow natural light to flow better.
In fact, buying the wrong-sized furniture is one of the top decor mistakes that are making your home look smaller than it is.
3. Make use of vertical space
Bathroom items in storage boxes (Image credit: Shutterstock)
Furniture doesn’t always have to be spread out. Another top tip is to utilize vertical space — especially if you lack floor space or have a compact room. Depending on how strong your walls are, you can easily wall mount floating wall shelves, vertical cabinets, or clever storage units to free up valuable floor space.
For home offices, hanging smaller things on wall-mounted rails can be handy, as you’ll have more desk space making it less cluttered. And for small bathrooms, wall-mounted storage is one of the things organized people keep in their bathrooms. Just don’t forget to check what’s behind the wall before you start drilling holes everywhere!
There are also plenty of stackable storage ideas to keep everything in order. For instance, if you want to keep children’s toys tidy, storage organizers like this Humble Crew Extra-Large Toy Organizer ($79, Amazon), will save you valuable space.
4. Layer your fabrics
Sofa with throws and cushions (Image credit: Shutterstock)
There’s nothing better than coming back to a warm and relaxing home to snuggle in. And layering up with chunky throws, soft blankets and plush cushions on sofas and beds work well to achieve that cozy factor.
In addition, it’s good to mix-and-match the textures and color scheme so that everything doesn’t look the same. You want to create an inviting feeling that is also aesthetically pleasing.
Interestingly, soft furnishings are one of the clever ways to reduce noise in your home. Plush furniture like an upholstered sofa, bench or even plump cushions work well to ‘soften’ an area — diffusing unwanted sounds. Thick rugs on hardwood floors can also help to block out some noise, and also prevents furniture from making much noise when it’s moved around. So it’s a win-win!
5. Conceal the clutter
Storage stool and basket in living room (Image credit: Shutterstock)
When designing a space, we often forget about functionality, and practical storage solutions. To avoid cluttered spaces, conceal the clutter with multi-purpose furniture such as ottoman benches, blanket boxes or woven baskets. These are clever ways of hiding clutter, as well as doubling up as extra seating or a handy footstool for your guests. Plus, if you have cluttered shoes piling up by the front door, here’s 7 space-saving ways to organize shoes in your entryway.
In addition, if you have unsightly cables or items lying around, there are plenty of creative ways to disguise ugly items in your home. These include things like cable management organizers or sleeves, soap dispensers, or attractive tissue box covers.
And if you have one of the best TVs for family entertainment, cozy movie nights or a decent gaming session, check out these clever ways to decorate around a TV.
6. Don’t overcrowd your walls
Gallery wall in living room (Image credit: Shutterstock)
Whether it’s family photographs, abstract wall art, or stylish posters, pictures on the walls can add a personal touch. However, there is a danger of going overboard with the gallery wall — making your walls look like an eyesore.
When learning ways to decorate a blank wall, it’s advisable to stick to the ‘odd number rule’ when displaying pictures. So rather than hanging in even numbers, stick to three or five on one wall, or even one large frame. This rule is considered to be more visually appealing, and looks less cluttered. If you want to hang two pictures side by side however, make sure the frames are identical, and hung at the same height. Although this should really be 57 inches, generally, pictures should be hung at eye-level.
Secondly, if you just want to hang one large wall art, position it so that the center of the artwork is approximately 48-56 inches from the floor. However, if it’s positioned above a sofa or table, the bottom of the frame should begin at least 6-12 inches above the back of the sofa or tabletop.
7. Don’t go overboard with trends
Peacock chair in room (Image credit: Shutterstock)
If you follow decor trends on social media or TV shows, it can be easy to get carried away with buying things on impulse. By definition, trends come and go, and just because everyone is doing wood panelling, doesn’t mean it will look good in your home!
Define your personal style, and keep your interior scheme simple and classy. After all, less is more! It’s always best to stick to neutral styles, tones or accessories, and incorporate bursts of bold color in soft furnishings, accessories or even lush houseplants. This way, you can change it up whenever you feel like it, or style your home according to the changing seasons.
What’s more, splurging on the latest trends and new furnishings just for the sake of it can make your home look cheap, according to interior designers.
If you’re getting ready to buy your first home, there are probably thousands of questions running through your mind. Questions about location, real estate services, expenses, and more — it’s a huge financial commitment and you probably want to make sure you have the best chance at getting exactly what you want. While it can be a difficult process to navigate, there is help for first-time homebuyers, from resources and advice to first-time homebuyer programs to help you finance a home.
If you’re worried you won’t ever be able to purchase a home, take a deep breath and a good look at your finances. You can start by reviewing your current financial situation and beginning to save for a down payment. (There are investment accounts and savings options that can help you reach your goal of buying a home, too.) Here are 12 helpful tips for first-time homebuyers.
1. Know Your Credit Score
Your credit score is typically very influential in determining what kind of interest rate you can get on a home mortgage loan. You can get one free credit report from each of the three major credit bureaus (Equifax®, Experian®, and TransUnion®) every 12 months, and may also be able to view free reports more frequently online. You can review your credit report to spotlight any errors that may affect what lenders are willing to offer you.
If you find any errors, you can report them and have them removed. This process can sometimes take a while, even if the mistakes are obvious, so consider starting a credit report review early on in your home-buying process.
2. Calculate What You Can Afford
Do you know how to figure out how much house you can afford? While the size of your mortgage is generally determined by an evaluation of your personal finances and debt, there are a few rules of thumb that may be relevant.
One general guideline is that your housing costs, including your mortgage payment, should, ideally, be no more than 28% of your gross monthly income.
If you are paying off student loans, credit card debt, or have a car payment, you may want to adjust your budget accordingly. Some people try to keep their debt to 36% of their gross monthly income, so that they can still prioritize financial goals like saving for retirement. (This is just another rule of thumb and everyone’s financial goals are different.)
And having less debt may make you more appealing to mortgage lenders. Understanding how much money you feel comfortable spending on a house can, in turn, impact the properties you consider. As you build your budget, you can also check out SoFi’s mortgage calculator.
3. Look into First-Time Homebuyers’ Programs
While you are evaluating your options and creating your budget, it could be worth looking into some first-time homebuyers’ programs. Some programs offer down payment and closing cost assistance, or loans with reduced interest rates.
There are a variety of options available for first-time homebuyers looking for assistance. For example, the Federal Housing Administration offers a mortgage insured by the FHA. These loans often come with competitive interest rates and allow for smaller down payments.
The USDA also helps first-time homebuyers with a program focused in rural areas. And the VA loan program provides assistance to active duty military members, veterans, and surviving spouses. There are even more first-time homebuyer programs and loans available from various states as well.
4. Understand the Expenses
There are plenty of other expenses that come with purchasing a home beyond your down payment and closing costs. For example, when you’re renting property, you don’t have to worry about property tax or general maintenance. When you own property, you do.
In addition to property tax, you’ll likely also need insurance to protect your new home. And you’ll be responsible for maintaining the property, of course, which can include painting, replacing windows, updating the roof, replacing appliances, and more regular maintenance and upkeep.
You may also need to factor in additional purchases like a lawn mower or professional landscaping if the property you are looking at has a yard. Will you need to buy a snowblower to clear the driveway during long winters? These are all factors that can come into consideration when figuring out the cost of your new home.
Check out our Home Affordability Calculator to estimate how much house you can afford.
💡 Quick Tip: Jumbo mortgage loans are the answer for borrowers who need to borrow more than the conforming loan limit values set by the Federal Housing Finance Agency ($726,200 in most places, or $1,089,300 in many high-cost areas). If you have your eye on a pricier property, a jumbo loan could be a good solution.
5. Remember that Location Matters
Location is, obviously, important to many buyers. In some cases, you may have to decide if being in the neighborhood you want is more important than having extra square footage or other, similar trade-offs.
If you have kids or are planning to, you will likely be considering the school district each potential property falls in. Even if you aren’t planning to have kids, it could be worth considering the school district since it can have an impact on the value of your property and could make it easier to sell the house down the line.
6. Plan for the Future
Zoning laws and development plans are another factor to consider when house-hunting. If there is undeveloped land nearby, it can’t hurt to do some digging and see if there are any plans for development.
It may also be worth looking into the property value of other homes in the area. Have they been declining in recent years? If so, this could impact the future value of a home you’re considering.
7. Use Your Imagination
When shopping around for houses, you can take the opportunity to look at a property’s potential, as well as its current value. It’s easy to be distracted by the current owner’s décor, paint, carpet, or other factors that are easy to change. You can easily repaint or update the appliances, but you won’t be able to adjust the location, floorplan, or add rooms to the home as easily. 💡 Quick Tip: Backed by the Federal Housing Administration (FHA), FHA loans provide those with a fair credit score the opportunity to buy a home. They’re a great option for first-time homebuyers.
8. Reserve Cash for Home Improvements
When you’re getting ready to put a down payment on a house, it may be tempting to clean out your savings account. And while that’s completely understandable, keeping your emergency fund close at hand may be a good idea when becoming a homeowner.
After closing costs have been sorted out and you’ve moved into your new home, you might find that unexpected repairs pop up. Having a reserve stash of cash can be helpful if the roof in your new home starts leaking, or you need to replace an appliance.
9. Get a Real Estate Agent
With all of the housing apps and free resources available on the internet, it may seem like a real estate agent is unnecessary. But in reality, navigating the housing market can be tricky and hiring an agent up front can save you time and help make your home-buying experience easier.
While you could spend your time going to open houses and scouring real estate listings, an agent can tailor the home search so that you spend less time looking at houses that don’t meet your criteria. They also can have access to new listings that aren’t yet on the market and may be willing to “preview” homes for you. A real estate agent can also help you navigate the intricacies of contract negotiations and paperwork. If you’re wondering how the real estate agent gets paid take heart: They are typically paid from the seller’s proceeds.
10. Know What to Expect from a Home Inspection
Having a home inspection completed is a critical step in buying a home. Inspection procedures vary from state to state, so it can be important to understand what is included in the home inspection in your state, since this is a great chance to truly examine the property and uncover any issues—before they become your issues.
Inspectors should have access to every part of the house including the roof and crawl spaces, and you should be able to attend the inspection yourself.
Don’t be afraid to ask the inspector questions; the more information you have, the better prepared you can be to decide if this is the right house for you.
11. Negotiate the Offer
You’ll have an opportunity to negotiate when you’re making an offer on a house. A lot of factors can influence an offer and negotiating terms in your favor could result in serious savings, especially if you are in a buyer’s market.
If you are working with a real estate agent, they can help give you a good idea of what is considered a reasonable purchase bid by providing comparable sales. A “comparable” is a home similar to the one you are considering (and in the same condition and location) that has sold in the last three months. An agent can help give you an estimated price range and manage your expectations.
12. Find the Right Mortgage
Before committing to a mortgage, it’s smart to shop around and see what various lenders are willing to offer you. A few things to consider include the interest rates, loan terms, application process (Is it lengthy? Online only?), and any hidden fees included in applying for or repaying the mortgage. Familiarize yourself with the different types of mortgage loans available during this shopping process.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
Photo credit: iStock/PeopleImages
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
A holographic will is a will that is handwritten and signed by the author (the testator). Holographic wills are not validated by witnesses or notary signatures
. They are not legally valid in every state, and some states only allow them in specific circumstances, such as active military duty.
Holographic wills are free to make and can be written in an emergency, though they’re typically not the most secure option for estate planning. A holographic will can be harder to verify during probate, which is the court-supervised process for validating a person’s will and distributing their assets after death.
You can make a will without a lawyer, for free or inexpensively, using an online template or will-writing software and by following your state’s requirements for validation.
How to create a holographic will
Each state has its own rules about what makes a holographic will, but most require that you follow these steps:
Write the entire will in your own handwriting, with no typed components or other features on the page. Write legibly to ensure that others can easily read the document.
State clearly that it is your will, such as by writing “This is my last will and testament” at the beginning.
Name your executor, who is the person who will administer your estate during probate and distribute your assets. For example, you can write, “I name Sarah Smith as the independent executor of my estate.” In some states, such as Texas, you may need to add that you want your executor to “serve without bond,” which may help avoid certain court fees
.
Include the same basic components as a standard will, such as naming the beneficiaries for your assets and naming a guardian for minor children.
Sign and date the document. Your own signature is the only verification for a holographic will.
What is the purpose of a holographic will?
A holographic will is the simplest way to designate where your property should go after you die. It’s a method to make sure your loved ones know your final wishes without a lawyer, witness or notary signature.
Holographic wills aren’t legally valid in all U.S. states, and they can be difficult to verify in probate. The court will need to verify your handwriting, for example, and without witness signatures, the probate court (or a family member, friend or stranger) might question the circumstances of the will, such as whether you wrote it with undue influence or whether it was your final version.
Price (one-time)
None
Price (one-time)
One-time fee of $159 per individual or $259 for couples.
Price (one-time)
$89 for Basic will plan, $99 for Comprehensive will plan, $249 for Estate Plan Bundle.
Price (annual)
$99 to $209 per year.
Price (annual)
$19 annual membership fee.
Price (annual)
None
Access to attorney support
No
Access to attorney support
No
Access to attorney support
Yes
Where is a holographic will valid?
Pros and cons of a holographic will
Advantages
Doesn’t require a lawyer.
Not legally recognized in some states.
Doesn’t require a witness or notary signature.
May be more likely to be contested during probate.
Can be the only option for estate planning in an emergency situation.
Must be handwritten, which can increase the likelihood of mistakes and make changes difficult.
Going to college or graduate school is a serious investment in your future — both professionally and financially. Naturally, you’ll want to know how much financial aid you’re eligible for, including student loans, grants, and work-study programs.
The amount of federal aid that prospective and current students receive is based on a variety of factors, and everyone’s financial situation is unique. But familiarizing yourself with the following requirements and questions can help paint a clearer picture of how much FAFSA money you will get.
What Are the Eligibility Requirements?
Many incoming and current college and graduate students are eligible for federal aid. Students must satisfy the following criteria to apply:
• Be a U.S. citizen, national, or eligible noncitizen
• Have a valid Social Security number, unless you’re from the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau
• Have a high school diploma or GED
• Promise to use awarded federal aid for education purposes only
• Do not owe refunds on any federal student grants
How Do I Begin the FAFSA?
The first step to completing the FAFSA is creating your FSA user ID and password. From there, you’ll answer a series of questions covering demographic information, schools you are interested in attending, financial details, and information from parents or guardians based on dependency status.
Filling out the FAFSA may feel intimidating, but a little preparation can save you from common FAFSA mistakes, like leaving important fields blank.
What Factors Affect FAFSA Money?
The application includes questions about demographics and finances for students and sometimes their families to answer. Collectively, this information will determine how much need-based and non-need-based aid students qualify for.
Applying for the FAFSA Every Year of School and on Time
Filling out the FAFSA is not a one-time deal. Students must file the FAFSA each year they are enrolled in college or graduate school. Yet approximately 40% of high school seniors do not fill out the FAFSA, and a quarter of college and graduate students do not renew their application after their first year of studies.
There are several important FAFSA deadlines to be aware of. The federal deadline for the 2023-2024 academic year (this includes students beginning school in winter or spring 2024) is June 30, 2024. For the 2024-2025 academic year, students can submit the FAFSA once it opens in December 2023.
State deadlines vary, and many precede the federal deadline by one or several months. Applying early can increase your chance of receiving additional financial aid from your home state in the form of grants or scholarships.
Dependency Status
An applicant’s dependency status is determined by 10 questions found at StudentAid.gov/dependency. Even if your parents claim you as a dependent for tax purposes, you may still qualify as an independent for federal financial aid. You most likely qualify for independent status if you meet any of the following requirements when filling out the FAFSA:
• At least 24 years old
• Married
• A graduate or professional student (law, medicine, etc.)
• A veteran or active member of the armed forces
• An orphan, ward of the court, or emancipated minor
• Claiming legal dependents other than a spouse
• Homeless or at risk of becoming homeless
Your dependency status affects how much financial aid you’re eligible to receive. In many cases, independent students can be eligible for more financial aid, as they are assumed to be paying their own tuition and living expenses.
Still, dependent students may be eligible for a variety of financial aid opportunities from federal or state governments and colleges through the FAFSA. Most incoming and current undergraduate students are considered dependent. This means that information from parents or guardians, such as tax returns, must be submitted and will affect whether financial aid is awarded and how much.
In special circumstances, students may file for a dependency override. These are awarded case by case, and are typically reserved for students facing exceptional family-related issues or whose parents are unwilling to provide information for the FAFSA.
Expected Family Contribution
Expected Family Contribution, or EFC, primarily applies to dependent students. The EFC calculates eligibility and aid based on several financial and demographic indicators, including:
• A family’s taxed and untaxed income
• A family’s assets and benefits (unemployment and Social Security, for example)
• Family size and number of dependents enrolled in or likely to attend college
This calculation determines need-based and non-need-based aid eligibility and amount, rather than a figure a family is expected to pay toward education. Typically, a lower EFC translates to greater financial aid eligibility as a result of higher need.
Starting with the 2024-2025 school year, the EFC will be replaced by the Student Aid Index, or SAI. It fulfills the same basic purpose but works a little differently. You can learn more about the upcoming Student Aid Index here.
Cost of Attendance
Education costs can vary considerably based on merit-based scholarships, in-state vs. out-of-state residency, and other factors. The amount of FAFSA money you receive will also depend on the cost of attendance for your chosen college or university.
The cost of attendance encompasses tuition, fees, room and board, books and school supplies, and expenses associated with child care or disabilities, if applicable. A lower cost of attendance usually translates to less aid, because the funding can be used only for education purposes.
Not sure where you want to apply? Our College Search tool can help.
How Much Money Will I Get From FAFSA?
The amount of FAFSA money you receive cannot exceed the cost of attendance for your chosen college or university.
Before applying, the Federal Student Aid Estimator is a useful tool to estimate the amount of federal student aid you may qualify for.
Assuming that you meet the eligibility criteria and are applying on time, you may receive some form of federal financial aid, especially if your EFC is less than your cost of attendance. Potential sources of federal student aid include the following programs:
Grants
Unlike loans, grants are free money to put toward your education that does not have to be paid back. After completing the FAFSA, students with proven financial need may receive aid in the form of a Federal Supplemental Educational Opportunity Grant or Pell Grant. Opportunity grants are allocated based on need, other aid awarded, and college budgets. Pell Grants change annually but can be as high as $7,395 for the 2023-2024 academic year.
Work-Study
Federal work-study programs typically involve a part-time job on or off campus. Wages are set by the college but must meet minimum-wage requirements. Work-study schedules are intended to be structured around students’ classes.
Federal Loans
Eligibility for federal student loans is generally broader than for grants and work-study programs. Federal loans are either subsidized or unsubsidized, with subsidized loans being need-based and including interest deferment and grace periods. On the other hand, unsubsidized loans begin accruing interest as soon as they are paid out to borrowers.
Different types of federal student loans exist, and each has a maximum award amount according to dependency status and year of study. Dependent undergraduate students have an aggregate loan limit of $31,000. Independent undergraduates can take out $57,500, and graduate students can borrow up to $138,500.
How Else Can I Pay for College?
If financial aid isn’t enough to cover your tuition and other education expenses, there are ways to make college more affordable.
Scholarships and Grants
Besides scholarships granted by your chosen college, there are opportunities offered by private foundations, community groups, and nonprofit organizations. Awards can be given based on academic merit, need, field of study, or participation in a specific sport or activity. Our Scholarship Search tool can help you unearth available awards filtered by school type, field of study, state, and more.
Try to stay on top of scholarship and grant applications and deadlines as they can come and go quickly. Winning a scholarship or a grant is basically finding free money, and you don’t want that money to go unclaimed.
Private Student Loans
Students who cannot pay for college with scholarships and federal aid alone can apply for private student loans from various financial institutions, including banks, credit unions, and online lenders. Interest rates, forbearance, and other terms and conditions can vary, so shop around to compare loan rates and terms.
SoFi’s no-fee private student loans are an option for students to help pay for college and graduate school. Flexible repayment plans can ease the search for a loan that works with a student’s budget and financial plan.
Learn how you can help pay for your education with private student loans from SoFi.
SoFi Private Student Loans Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
In her new book, “The Organized Home for New Parents,” Dallas home organizer and mom Ría Safford offers solutions for managing all the stuff that babies come with, so homes with little ones function better and look good, too. (Getty Images)
If necessity is the mother of invention, motherhood is the inventor of organization. Anyone who’s become a parent knows that if you thought keeping your house and life pulled together before kids was tough, lookout Baby! Here comes chaos.
Although nothing can prepare you for the upheaval, Ría Safford’s new book, “The Organized Home for New Parents: Create Routine-Ready Spaces for Your Baby’s First Years,” out this month from Blue Star Press, gives new parents a running start.
The Dallas mother of three left a corporate job when her first child was born and started her organizing company that year. “This did not come easy,” she said. “I’m a naturally messy person, but I couldn’t keep flying by the seat of my pants.”
Her experiences inspired this new, richly photographed book for parents with kids between newborn and two.
“Everything else about babies is really out of our control, but this book is about what you can control,” she said. “It’s (a) girlfriend guide. I took my mistakes and moments and wrote about them. If I’d had this book when I started having kids, my husband and I would have had a lot fewer arguments.”
Among the suggestions Safford offers to soften the baby blow:
Get ahead of the stuff: “Most expectant parents don’t realize their home’s inventory is going to triple,” Safford said. “These small humans come with so many things: bouncy chairs, sensory toys, cribs, car seats, strollers, diaper bags, clothes and incoming gifts.” Have a plan for where it all will go.
Don’t make the nursery a storage area: The nursery should have only what you need for the baby’s current stage. Separate infant wear from clothes the child will grow into. Put the larger items, washed and ready to wear, in bins labeled by age (12-18 months, 2T) in another room, the garage or on a high shelf in the nursery.
Master the change: The goal when setting up a changing table is to make those 2 a.m. diaper changes as easy as possible. Organize this hard-working surface so you can reach everything you need in the dark when you’re half asleep. Keep the top stocked only with essentials: diapers, wipes, a toy to amuse baby while you’re changing, a diaper disposal in easy reach. In the drawers below, store clean onesies, pajamas, swaddling blankets and crib sheets for those major blowouts.
Manage the inventory: Label drawers and shelves (0–3-month onesies, swaddle blankets, zip-up sleepers), so everyone who cares for the baby can easily find items and put them away. Keep a “too-small” bin in the baby’s closet. As clothes stop fitting, drop those still in good condition in the bin. When you reach the top, that’s your cue to store the items (if you plan on another child), give them to a friend or donate them.
Have a catchall basket: Outside the nursery, baby stuff has a way of taking over. The family living area may start the day in order, but by 4 p.m., it’s a hurricane of blankets, rattles, baby books, toys, teeny socks, teething rings, mini shoes and Goldfish crackers. To reclaim the space (and your sanity), keep a big basket in the main living area and drop all the randoms items in it to put away later (in their labeled places).
Rotate toys as they age out: Just as with outgrown clothes, when kids outgrow certain toys, store them for the next baby or give them away. Otherwise, trust me, they will take over your house. If the child is just bored with certain toys, but not ready to say good-bye, rotate them.
Entertainment centers: Anyone who has had a baby knows, accomplishing anything beyond baby care is a feat. The solution is having an area in every room to safely entertain the baby while you cook, get dressed, or do laundry. A low cupboard in the kitchen with toys, for instance, or a bin of toys under the bathroom sink can buy precious minutes.
Steve Bailey, Senior Managing Director of Loan Administration for Countrywide Financial, testified before the Senate yesterday, calling the recent allegations regarding its bankruptcy cases “unfounded” while claiming that the mortgage lender was committed to helping its borrowers avoid foreclosure.
He said the many recent allegations made in the media related to its bankruptcy systems and servicing practices were not based on fact, and stressed that the cases are legally complex.
At the same time, he was quick to note that Countrywide’s processes were the best in class, and resulted in a small number of errors.
A series of internal reviews conducted by Countrywide indicate an error rate below one percent for mistakes that “adversely impact a borrower.”
Bailey went on to say that Countrywide’s policies and practices are designed to avoid unnecessary fees, especially in bankruptcy cases, citing the fact that the lender doesn’t charge late fees on post-petition (after BK is filed) delinquencies or collect prepayment penalties on payoffs tied to a BK.
He added that Countrywide typically waits 45 to 60 days into a post-petition delinquency before referring the account to attorneys to file motions for relief from the bankruptcy stay (foreclose).
Additionally, Countrywide has or will in the near future implement changes to its bankruptcy servicing system to improve the transparency and accuracy of the process.
These changes include an independent review of a random sample of loans in bankruptcy by an outside auditor, the establishment of the Bankruptcy Ombudsman’s Office, and the adopting of best practices which are expected to be recommended shortly by the National Association of Chapter 13 Trustees.
He concluded that a successful bankruptcy was not only in the interest of the homeowners in question, but also the mortgage lender, investor, and servicer.
Countrywide is currently involved in tens of thousands of bankruptcy cases throughout the country.
Shares of the Calabasas, CA-based home loan lender were down 32 cents, or 5.99%, to $5.02 in afternoon trading on Wall Street.
A new report from Inside Mortgage Finance revealed that San Francisco-based bank and mortgage lender Wells Fargo snagged 33.9% of the mortgage market in the first quarter of 2012.
It was the biggest residential mortgage market share in recorded history, and comes thanks to a huge drop-off by its closest competitor, Bank of America, whose appetite for mortgages soured in recent months.
BofA stopped both reverse mortgage lending and accepting loan applications from correspondent lenders, which shrunk their presence in a hurry.
Instead of turning out to be the next Countrywide, they shifted their focus toward retail customers instead, focusing on quality over quantity it seems.
But with a waiting list of 90 days to refinance, Bank of America may be focused on other things, such as loss mitigation on all their existing mortgages.
Meanwhile, Wells’ market share increased from 30.1% in the fourth quarter of 2011 to 33.9% from the January to March period, which meant they originated roughly $130.5 billion of the $385 billion total.
No One Else Even Close
Amazingly, no other lender came even close to Wells Fargo. In fact, its closest competitor, Chase, claimed just 10.6% of the mortgage market during the first quarter.
And it dropped off quickly from there, with U.S. Bancorp coming in third with a paltry 5.2% of the market, followed by Bank of America with just 4.2%.
Even more astonishing, Wells Fargo’s market share bested the next seven largest mortgage lenders combined, and its first quarter numbers put it on track to crush last year’s already solid numbers.
The company originated $357 billion in mortgages last year, and if the first quarter is any indication, the numbers should reach somewhere close to $500 billion this year.
Wells also had an unclosed loan pipeline of $79 billion at the end of the first quarter, meaning many more mortgages are set to fund.
Is This Good or Bad for Homeowners?
I would say it’s a little of column “A,” and a little of column “B.”
Wells Fargo is probably the most conservative mortgage lender of its size out there, if not of any size.
Even during the crazy years, which led to the mortgage crisis, they stayed away from low credit score, high loan-to-value lending and no money down mortgages.
And they actually underwrote files, instead of approving everything under the sun.
So it’s probably a good thing that they’re leading the market as opposed to some other company.
Ideally, it means fewer mortgages will go bad, and that could help spur a housing market comeback.
At the same time, with Wells claiming more than one in every three mortgages, it means homeowners may not be shopping around as much as they should be.
As I always say, don’t be the guy or gal that gets a single mortgage rate quote. It’s one of the biggest mistakes you can make.
Their immense market share also means that if anything goes wrong, Wells could put that “too big to fail” mantra to the test.
If home prices slip and the markets crash, Wells would be in a bad position holding all those loans.
Inside: Do you want to claim your partner as a dependent on your taxes? This guide will explain the rules of claiming dependents whether girlfriend or boyfriend and help you take the necessary steps to do so.
Navigating the waters of tax credits can be tricky, especially when it involves claiming an unmarried partner as a dependent.
The Internal Revenue Service (IRS) does permit the declaration of a non-relative adult as a dependent, provided certain conditions are met.
And that is where it gets tricky for the tax novice.
That is where we are going to reference the IRS guidance, so you can determine whether or not you qualify for this deduction.
By pointing you in the right direction, you can understand the specific tests and requirements to avoid any tax-related complications.
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Understanding dependency in the context of taxes
The word “dependent” might remind you of a newborn baby or an elderly family member. But in tax terms, the meaning broadens.
In the IRS terms, a “dependent is a person, other than the taxpayer or spouse, who entitles the taxpayer to claim a dependency exemption.” 1
This might be a child, an adult family member, a significant other, or even a close friend. This term “qualifying relative” is crucial in IRS parlance for its implications on your tax dues.
Typically, any person can qualify as a dependent if more than half of their financial support, including living and medical expenses, is taken care of. Also, it’s an opportunity to boost one’s tax return by up to $500 with the Other Dependent Tax Credit.
What qualifies a person as a dependent?
The IRS bases dependents on two categories: “Qualifying children” and “Qualifying relatives.”2 You might think of a qualifying child as your son or daughter. Expanding the scope, a qualifying relative can be a sibling, a parent, or even a significant other.
The essence lies in their financial reliance on you and the nature of your relationship. They ought to:
Be related to you via blood, marriage, or adoption;
You provide over 50% of their financial support including housing, food, medical care, and other expenses
They are U.S. citizen.
The income of the possible dependent.
These nuanced rules might sound overwhelming, but IRS guidance and tax experts like TurboTax can help lighten the load.
Now, let’s address this sticking point: Can you actually claim your partner as a dependent? The following section unravels the mystique.
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Can I Claim My Partner as a Dependent?
You can claim your partner as a dependent on your tax return, provided they meet certain criteria explained by the IRS, including passing the non-qualifying child test, the citizen or resident test, the joint return test, the income test, and the dependent taxpayer test.
I know this is where it gets difficult to follow for the average person.
So, we are here, to break this terminology down into layman’s terms, as such you can then make the best decision for your tax situation.
If you are still confused, then consult with an online tax software like TurboTax or a tax professional for guidance on your personal taxes.
Basic requirements for claiming your partner as a dependent
This essentially means that your partner should be financially dependent on you, where you bear more than half of their living expenses.
In essence, claiming your partner as a dependent revolves around these fundamentals: 2
Residency: Your partner must have been living with you for the full tax year.
Income limit: Your partner’s gross income should not exceed $4,700 for the year 2023.
Support Requirement: You are the main pillar for your partner’s financial needs by covering over half of their total expenses.
Anyone Else Claiming Them: None else should claim your partner as their dependent.
Unmarried. Your partner must be unmarried legally.
All fulfillment of these criteria moves you a step closer to enjoying some tax relief.
Confirm with an accountant or tax expert as exceptions can exist, such as temporary absences due to illness, education, business, and others.
Common scenarios where you can claim your partner as a dependent
Claiming a partner as a dependent isn’t as fancy as it sounds, but it’s plausible. Here are common scenarios enabling you to do so:
Co-habiting Before Marriage: You and your partner share a home, and you pay more than half of your partner’s living costs. However, your living situation cannot violate local laws, as in some states, “cohabitation” by unmarried people is against the law.
Unemployed Partner: Your partner’s tie with working life is severed (e.g., due to health issues or being laid off), and you bear most of the living expenses.
Supporting Student Partner: Your partner pursues their education, and you shoulder the majority of their expenses.
Take this interactive IRS quiz to determine whom I may claim as a dependent.
How much will I get if I claim my girlfriend as a dependent?
Now the pivotal question: what’s the advantage in dollars and cents?
In essence, claiming your partner as a dependent will slash your taxable income by $500 with the Other Dependent Tax Credit. 3
If you already qualify for Head of Household status with another dependent, then it is possible your deduction may be more. 4
Remember, there’s no one-size-fits-all answer. When tax complexities strike, consult an expert!
Is it better to claim my girlfriend as a dependent?
Honestly, like most tax questions, the answer is: it depends.
If you’re covering your partner’s majority expenses and they’re fulfilling all IRS criteria, then claiming them can bring solid tax savings.
Yet, bear in mind:
If your partner earns substantial income (greater than $4,700), they might lose personal benefits by becoming your dependent.
By claiming your partner, their Social Security or medical benefits may take a hit.
So, assess your partner’s income, benefit entitlements, and your tax situation. Then, tread wisely.
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Important Rules to Keep in Mind When Claiming Your Partner
When filing taxes, it’s crucial to understand that both parties are responsible for the accuracy of each other’s tax reporting and liability.
It’s worth noting that tax advantages and disadvantages exist in the scenario of being married and filing jointly, such as potential reductions in your tax bracket and sharing of business losses. So, it may be something to consider.
Can I claim my girlfriend as a dependent if she has no income?
In a nutshell, yes! If your girlfriend had no income in the tax year, you might claim her as a dependent. Given you provide over half of her total support and she lived with you all year, you’re golden.
For 2023, your partner’s gross income should not exceed $4,700.
However, keep in mind that in cases where public assistance or Social Security benefits are her primary financial sources, claiming her could negatively impact those benefits.
Learn the answer to do you have to file taxes if you have no income.
Remember: tax waters are often murky. When in doubt, lean on a tax professional’s shoulder!
Support factors
Answering the support question plays a hefty role in determining who qualifies as a dependent.
You shouldn’t just share the living cost; you should pay more than half of it. Remember, it includes an array of expenses, like food, clothing, education, or medical expenses.
The implication of your partner being claimed by someone else
Here’s a key rule: if someone else is claiming your partner as a dependent, you’re out of the game. The IRS rules say a person can be claimed as a dependent by only one taxpayer in a single tax year.
This could happen if your partner perhaps lives part of the year with someone else like a parent.
Another possibility is if your partner is legally married still, then they would have to file a married, filing separately return.
So, if your partner qualifies as someone else’s dependent, even if they don’t claim them, you can’t claim your partner.
Frequent Situations Where You Can’t Claim Your Partner as a Dependent
Considerations for Non-resident or Non-citizen partners
If your partner isn’t a U.S. citizen, resident, or national, the dependent claiming game changes. Notably, nonresident aliens cannot be claimed as dependents.
However, if your partner is a resident of Canada or Mexico or a U.S. national, you may claim them. But they should be living with you full-time. 2
This rule extends to partners awaiting changes in their residency or citizenship status. In such cases, you must wait until their status changes before claiming them.
When your partner earns more than the stipulated income threshold
When your partner’s income level sails past the IRS limit ($4,700 in 2023), claiming them as a dependent slips off the table. 2
Any part-time job, seasonal work, or income source counts, even those seemingly negligible. As soon as they cross this threshold, regardless of how heavily they rely on you or where they reside, they can’t qualify as your dependent.
Make sure to stay updated on IRS rules. They adjust the income limit for inflation annually, which changes this income ceiling. Keep an eye peeled for those IRS updates!
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This is how I have filed my personal taxes for many years.
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How to Officially Claim Your Partner on Your Taxes
To officially claim your partner as a dependent on your tax return, you will do this when you file your taxes.
Thankfully, this is made easier with online software companies like TurboTax or H&R Block.
The same is true when you are trying to figure out how to file taxes without a W2.
Necessary steps to claim your partner on your taxes
You will first identify them as “other qualifying dependent” or “other qualifying relative”.
Gather the facts first: Confirm your partner’s income, residency, and who has been supporting them for more than half the year.
Document expenses: Keep track of all relevant bills and receipts to demonstrate your majority support.
Use tax software or a professional: Follow prompts about dependents in tax software like TurboTax. They could guide you through the process and specifics.
Complete relevant Tax Forms: Prepare the necessary forms such as Form 1040 and Schedule H and have proof of residency, financial support, gross income information, and certification of your domestic partnership to support your claim.
File your return: Don’t forget to include your partner’s details and tick the correct boxes.
Remember, the devil is in the details. So carefully evaluate your situation to avoid missteps, and consult with a tax professional when in doubt.
Pitfalls to avoid while filing tax returns
While preparing to file your tax returns, beware of these common pitfalls:
Incorrect income calculation: Ensure you tally your partner’s gross income accurately. Reminder: it should not eclipse $4,700 in 2023.
Overlooked Living Qualification: Your partner must have resided with you the entire year. Temporary absences (illness, education) can be exceptions.
Ignoring Other Claimants: If someone else is poised to claim your partner as a dependent – even if they don’t – you can’t claim them.
Emergency Funds Consideration: If your partner taps into their savings for a large expense, this could speak against you providing most of their support.
Forgotten Documents: Maintain a record of bills, receipts, and other expense documents.
The IRS overlooks no mistakes, so take care and stay informed. When in doubt, professional tax help is a button away.
Frequently Asked Questions (FAQ)
Intriguing question! Here’s the short answer: Your partner’s marital status may indeed affect your ability to claim them as a dependent.
For instance, if your partner is married and files a joint tax return with their spouse, you can’t claim them as a dependent.
Remember, tax rules are lock-key specific, and bending them can lead to penalties. Always seek advice from a tax professional.
While you might be able to claim your partner as a dependent, laying claim on their children as dependents is unlikely. IRS rules are clear: you can claim a dependent only if they’re your child or relative.
Since your partner’s children don’t fulfill this requirement, you can’t claim them unless they can be considered your qualifying relative AND you provide more than half of their support.
As always, it’s best to run this by a tax professional for clarity on your unique situation. All we tax-seers can do is guide; the decision falls on your shoulders.
Here’s the hard truth: if your partner didn’t live with you all year, you couldn’t claim them as a dependent. IRS rules are stringent about this: your partner must have the same home as you for the entire year. That is 365 days, no less.
However, IRS grants a green light to temporary separations due to special circumstances like illness, education, military service, or even a holiday. The key lies in their intent to return and, of course, their follow-through.
Stay wise and stay informed, and consult with a tax analyst to seal your decision with assurance.
Get Online Help
Navigating tax rules and regulations doesn’t need to be overwhelming. With the advent of online help, understanding whether you can claim your partner as a dependent becomes considerably more manageable. Here are a few benefits of seeking online help:
Convenience: With online help, you can access the information you need anywhere, anytime. No need to schedule appointments or deal with traffic to get to a tax office. You can get the updates and instructions right from the comfort of your own home.
Accessibility: Some great examples of accessible platforms are TurboTax, e-File, and H&R Block which provide 24/7 support and resources. They offer a wealth of information and experts at your fingertips.
Expertise: Apart from the convenience, these websites employ tax experts who deliver professional analysis and guidance tailored to your specific needs. Specifically, you can use TurboTax Live Full Service for someone to do your taxes from start to finish. Or you can ask questions with TurboTax Live Assisted.
File your own taxes with confidence using TurboTax. This can greatly simplify the process and minimize potential missteps.
Now, Can I Claim my Unmarried Partner as a Dependent is Up to You
As they say, “Ignorance of the law is no excuse”. The same holds true for tax rules.
Falsely claiming a dependent can lead to severe penalties, not just a dinging of your wallet. You’d be sailing the choppy waters of tax evasion, which can bring on hefty fines or even dark days behind bars.
In blatant cases, the IRS could impose a Civil Fraud Penalty. That means a penalty amounting to 75% of the unpaid tax amount resulting from fraud. 5
In short, play by the rules! Accurate and clear tax filing may seem tedious, yet it will steer clear of any legal trouble. Remember, it’s always safer to ask if you are unsure!
Now, are you wondering why do I owe taxes this year?
Source
Internal Revenue Service. “Tax Tutorial.” https://apps.irs.gov/app/understandingTaxes/hows/tax_tutorials/mod04/tt_mod04_glossary.jsp?backPage=tt_mod04_01.jsp#dependent. Accessed October 23, 2023.
Internal Revenue Service. “About Publication 501, Dependents, Standard Deduction, and Filing Information.” https://www.irs.gov/forms-pubs/about-publication-501. Accessed October 23, 2023.
Internal Revenue Service. “About Publication 501, Dependents, Standard DeductionUnderstanding the Credit for Other Dependents.” https://www.irs.gov/newsroom/understanding-the-credit-for-other-dependents. Accessed October 23, 2023.
Intuit TurboTax. “Guide to Filing Taxes as Head of Household.” https://turbotax.intuit.com/tax-tips/family/guide-to-filing-taxes-as-head-of-household/L4Nx6DYu9. Accessed October 23, 2023.
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More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Above is a collection of words that essentially illustrate (and sum up) what I’ve written about over the past six years on this blog.
I recently came across a website called Wordle that lets you create “beautiful word clouds,” which are indeed powerful.
I simply began writing down any words that came to mind, all of which you’ll find on this website in one post or another.
Some virtually unknown concepts have become household names, like short sale and underwater mortgage. Back in 2006, most homeowners could hardly imagine anything so terrible would happen to them.
But this is the new reality we face.
The last several years have been a roller coaster ride for homeowners in America, and while it looks like things appear to be getting better, we aren’t out of the woods yet.
And what has taken place over the past several years won’t soon be forgotten.
When all is said and done, millions of homeowners will have been displaced thanks to the ongoing mortgage crisis. And we have all been affected, whether we rent or own.
So take a moment to reflect and look back. This has definitely been a defining moment in history.
Hopefully we’ll learn from our past mistakes and make better decisions going forward to avoid another collapse, but history tends to have a habit of repeating itself…
Click on the photo above to see the larger, original version.
Many students take out loans to pay for college. While federal student loans don’t require a credit check, private student loans typically do. And, since students often don’t have much credit history, they typically require a cosigner. A cosigner can be a parent but it doesn’t have to be. You can ask other family members, friends, or even mentors to cosign your student loan.
Since a cosigner will be responsible for paying back your loan in the event you’re unable to, it’s important to choose someone you feel comfortable entering a financial agreement with. A cosigner with good credit and high income could result in lower interest rates on your loans.
Read on for a simple, step-by-step guide on how to get someone to cosign your student loan.
How to Ask Someone to Cosign Your Private Student Loan
You may have someone in mind who would make a good cosigner. The problem is, how do you ask someone to cosign a loan? It’s a big ask, and approaching the topic can be intimidating. Not to worry. What follows are some tips that can help ensure you come to the conversation prepared.
Recommended: Avoidable Mistakes for Choosing Student Loan Cosigners
1. Research Your Financial Aid Options First
Before you ask someone to cosign a private student loan, it’s a good idea to explore all of your college funding options. Around 85% of students receive some form of financial aid to pay for college.
Filling out the Free Application for Federal Student Aid, or FAFSA, will give you access to any federal student aid you may be eligible to receive. This might include grants, work-study, federal subsidized loans, federal unsubsidized student loans, and even private scholarships. Completing the FAFSA is free, and it’ll also show potential cosigners that you’ve done your due diligence and have tapped all your available options to finance your education before asking for help.
Recommended: 11 Strategies for Paying for College and Other Expenses
2. Explain Why You Need a Cosigner
Once you’ve decided who you want to ask to be your cosigner, it’s important to come to the table with a clear explanation of why you need a cosigner and what costs the loan will cover. You’ll want to be prepared to share details on your own savings, debts, and credit history. This shows a cosigner why you need help and what kind of risk they would be taking on.
Providing a clear picture of what you have and what you need demonstrates that you’re taking your education and financial goals seriously. Having followed tip #1, you’ll be in a position to show the funding gap between your own funds plus any aid you’ve received and the cost of attendance at your chosen college.
3. Outline Your Plan for Repaying the Loan
When asking someone to cosign a student loan, it’s a good idea to let them know that you have a plan for repayment and exactly what that plan is. Some private lenders allow you to defer making payments until after graduation, while others require you start making interest-only payments while still in school. Either way, you’ll want to have an idea for how you will make those payments on your own.
Failing to make payments on time each month will impact both you and your cosigner, so it’s a good idea to also make a backup plan in case something doesn’t work out. This might be getting a part-time job in any field if you find that it takes longer than expected to get hired in your chosen field.
Demonstrating your plan for repayment can help build your potential cosigner’s confidence and help them feel more comfortable about entering into a cosigner agreement with you.
Recommended: 6 Strategies to Pay Off Student Loans Quickly
4. Make Sure They Understand What They’re Agreeing To
Before moving forward to a written agreement, it’s a good idea to go over the requirements and responsibilities for being a cosigner. For starters, your cosigner must meet a minimum credit score and demonstrate a certain minimum monthly income. The exact requirements will depend on the lender.
You’ll also want to let them know that, as a cosigner, they have a legal obligation to make sure the loan is repaid, and that any late or missed payments on the loan can impact both your and their credit scores.
While these risks can feel intimidating to bring up, outlining your plan to avoid loan default can help address their concerns and show you’re taking the commitment seriously.
Recommended: Ca$h Course: A Student’s Guide to Money
5. Make a Plan for a Cosigner Release
A cosigner release effectively removes a cosigner from a loan, freeing them from any continued responsibility for repayment of your loan. Private lenders may offer the option for a cosigner release if you, at a certain point down the road, meet certain credit requirements and have a strong track record of on-time payments.
Discussing a plan or timeline for when your cosigner will be released from their responsibilities shows that you’re being considerate of the risks of being a cosigner and the impact it can have on their finances. While you may not have the strongest qualifications as a borrower today, your creditworthiness can build over time as you consistently make on-time loan payments.
You might also have the option of refinancing your student loan and, in the process, releasing your cosigner from the original loan agreement.
6. Give Them Time to Think
Cosigning a loan is a serious commitment and whomever you ask may need some time to think over the decision. For this reason, it’s a good idea to approach your potential cosigner early on so you have plenty of time to talk through the agreement and, if necessary, pursue another option.
Handling Potential Concerns and Objections
Cosigners will likely have questions and potential concerns about how the agreement could impact their finances, as well as your relationship. After you’ve made your pitch, it’s important to hear them out and be open to their input to reach an agreement that works for you both.
If a cosigner has objections that you can’t resolve, it may be time to seek out a different cosigner.
Formalizing the Cosigner Agreement
If the person you ask to cosign your loan says “yes,” it’s time to find the right private student loan for your needs. It’s generally a good idea to shop around and compare rates and terms from different lenders, including banks, credit unions, and online lenders. Some lenders allow you to pre-qualify for a student loan online, without impacting your (or your cosigner’s) credit score. This allows you to compare offers, go over rates and terms with your cosigner, and decide which loan is the best fit.
When you officially apply for the loan, you and your cosigner will need to provide a number of financial documents to the lender, so be sure to give your cosigner time to gather all their paperwork.
Repaying the Loan Responsibly
When you take out a private student loan, you’ll typically have a choice of several repayment plans. Which one you choose can have a significant impact on both your monthly payment and total cost of the loan. Options may include:
• Immediate repayment This means you make full monthly payments while still in school. Doing so will minimize the interest you pay, resulting in the greatest savings.
• Interest-only repayment Here, you’ll pay only the interest on your loan while you’re still in school. Payments will be lower than immediate repayment but you won’t chip away at your loan balance (or save as much on interest).
• Partial interest repayment This involves making a fixed monthly payment while still in school that only covers part of the interest you owe. Payments will be lower than interest-only plan but your loan balance will grow.
• Full deferment Here, you’ll pay nothing while you’re enrolled in school. During this time, though, your loan balance grows.
Once you choose a plan, you’ll want to create a budget for the minimum payment you owe each month. It’s also a good idea to enroll in autopay, to ensure you never miss a payment. Some lenders also offer a rate discount if you enroll in autopay.
After you’ve graduated and your finances allow, you may be able to make extra principal-only payments — this can help lower the total interest you pay over the life of the loan.
The Takeaway
If you need a cosigner on your student loan, you have options. Whether you choose a parent, other family member, friend, or mentor, it’s important to be transparent about the requirements and risks that go into being a cosigner.
Coming to the conversation prepared can build trust and confidence with potential cosigners and put you on the path to funding your education.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
How do you convince someone to cosign a loan?
You’ll want to be transparent, as well as fully prepared for the conversation. Explain how the loan will support your long-term educational and financial goals, how you plan to make future loan repayments, and why you are a trustworthy borrower.
Who can I ask to be my cosigner?
It’s common for students to use parents or family members as cosigners, but there are no rules stating that your cosigner must be a relative. You can also ask mentors or family friends who are invested in your success. Just keep in mind that a cosigner will need to meet the lender’s financial and credit requirements.
Can I hire someone to be a cosigner?
There are businesses that advertise online that they will cosign your student loans for a fee, but borrower beware. These are often scams in which the “cosigner” requests cash payment in advance, then disappears. Or, the business might be legitimate but will require you to give them a portion of the loan in exchange for cosigning. Generally, it’s not worth the risk or cost.
What percentage of student loans are cosigned?
Roughly 92% of undergraduate private loans are cosigned. About 66% of graduate school loans from private lenders require a cosigner.
How do I assess my creditworthiness before seeking a cosigner?
To assess your creditworthiness, you’ll want to check your credit score and take a look at your credit reports.
You can often access your credit score for free through your bank or credit card company (check your statements on log into your online account). You can access your credit reports from the three main consumer credit bureaus (Equifax, Experian, and TransUnion) for free at AnnualCreditReport.com.
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