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Large trees, even landmark ones, sometimes have to be removed when they’re dead, dying, or growing too close to other structures. How much it costs to cut down a tree varies depending on where you live, the tree’s height and diameter, how accessible it is, and other factors. On average, you can expect to pay $750 to remove a tree.

While tree removal is costly, it’s often better to spend the money up front rather than risk a tree falling and causing injury or damage to nearby property. Keep reading to find out what tree removal costs and the complications that may drive up your price.

Average Tree Removal Cost

Removing a tree can range anywhere from $150 to $2,000, with the average landing at $750, according to Angi. Shorter trees will come in on the low end of the range, while larger trees can run between $800 to $2,000. A tall, hard-to-access tree can cost even more — as much as $10,000.

If you have multiple trees to remove, the costs can really add up. While many people throw it on a credit card, that can be an expensive solution. If you need financing, you might consider getting a home equity line of credit (HELOC), which allows you to borrow against the equity in your home as you need it.

Another option is to take out a personal loan for home improvement. These loans don’t require equity in your home or collateral, and many lenders offer same- or next-day funding. However, rates can be higher than home equity options.

Cost of Tree Removal by Type

A tree’s size generally impacts cost more than type. However, some species of trees are not as dense or as compact as others, making them easier (and less expensive) to remove. Determining the type of tree you need to have removed can also give you an idea of its height at maturity and provide insight into potential costs. Here’s a look at costs based on tree type.

Recommended: Typical Landscaping Costs

Factors That Affect Tree Removal Cost

The cost of tree removal typically includes cutting down the tree, cutting it into pieces, and removing the debris. How complicated and time-consuming this process will be determines the price.

To find the right contractor, you may want to call multiple tree removal services and compare quotes on the project. Make sure to ask what exactly their price includes and what extra services or fees may come up.

Here’s a look at some key factors that can affect your tree removal quote.

Size of the Tree

Generally the larger the tree, the higher the cost. Price can make a particularly big jump when a tree exceeds 80 feet tall. At this point, the removal company will need a crane to access the highest branches, along with additional staff to work the machine. This can add as much as $500 to the job.

Here’s a look at tree removal price by tree size:

A Tree That Has Already Fallen

Generally, a fallen tree will cost considerably less to remove than one that’s still standing, since the team doesn’t need to do any climbing or careful cutting. It’s just a matter of cutting it up, then removing the debris. You can expect to pay just $75 to $150 to remove a fallen tree.

That said, you generally don’t want to let a dying tree get to the point of falling, as it can do damage to nearby property and/or harm someone standing nearby.

Accessibility

If the tree you need to have removed is in a hard-to-reach or unsafe area, it can make the job harder for the team. This can add 25% to 50% to the total cost of removal. For example, a tree that has heavy branches near your home or is close to the local power lines takes more time and care to remove. A tree that is hard to get to due to obstacles can also be more costly. If possible, consider taking down fences or other structures in the way to reduce costs.

Number of Trees Needing Removal

The more trees you need to have removed, generally the higher the cost. However, you’ll typically save on the cost per tree, since the workers and equipment are already on your property. When multiple trees need to come down, some companies will charge by the acre instead of by specific tree count. Depending on how many trees cover the area, this can cost anywhere from $500 to $6,000 per acre.

Emergency Tree Removal

If a storm has caused a tree to lean perilously close to your home, you’ll want to bring in a tree removal company as soon as possible. Emergency tree removal generally costs more than standard tree removal, particularly after a storm, when these services are in high demand. A particularly urgent tree situation could run as high as $5,000.

Your homeowners insurance may cover the cost of tree removal relating to storm damage, so it’s worth checking your policy or calling them to find out. If a tree has already landed on your home or car, you may want to reach out to your insurer before getting it removed, since they may need to send an agent to assess the situation.

Cleanup and Debris Removal

Another factor that can impact the cost of tree removal is how you choose to handle the debris and stump. Options for debris removal typically include hauling away the tree (which runs around $70), putting it through a chipper so you can use it as mulch (on average, $95), or splitting it into firewood for your home (around $70).

If you don’t want to be left with a stump, the company will typically grind it up using a specialized stump grinder. The cost is around $100 to $150 for the first stump, and $50 for each additional stump.

Recommended: Five Curb Appeal Ideas for Your House

How to Determine If a Tree Should Be Removed

The biggest danger unhealthy trees pose is falling — onto people, homes, cars, or power lines. But even a healthy tree may need to be removed if it’s growing too close to a house or electrical wires. If you’re considering putting your home on the market, removing a threatening tree can give potential buyers one less thing to worry about.

Here are some telltale signs you might have to remove a tree:

•   It’s no longer growing leaves

•   Branches drop randomly (not related to high winds or storms)

•   It’s been significantly damaged by a storm

•   It has dead or dying branches

•   It’s growing too close to your home or other structures

•   The trunk is rotten and hollow

Generally, the first step is to hire a professional arborist to give you an opinion on your tree’s health. Some conditions may look concerning but not necessarily be damaging to the tree. Also, many cities require an arborist’s evaluation before you’re allowed to remove a tree.

Recommended: Top Home Improvements That Increase Your Home’s Value

How Much Does DIY Tree Removal Cost?

Tree removal can be dangerous and is generally best left to the professionals. If you have the experience and skills to do a DIY tree removal, however, you may be able to save some money. You’ll need several items for safety, including gloves, protective goggles, steel-toed boots, a hard hat, chainsaw chaps, and earplugs, which can run $200 to $300. In addition, you’ll need a chainsaw (which can run $50 to $150) and felling wedges (around $20 for six).

If you don’t have the necessary gear, you can expect to invest anywhere from $260 to $470 for a DIY tree removal. However, the risk involved may not be worth the cost savings. Tree removal professionals have access to tools and equipment that make the job significantly safer, including tree-rigging ropes, blocks and pulleys, hooks, ladders, lowering devices, and specialized saws.

The Takeaway

On average, homeowners pay $750 for a single tree removal. Your price will vary depending on the size of the tree, its accessibility, how many trees you’re getting removed, and what you want to do with the debris and stump.

A good first step is to hire an arborist to evaluate your trees and make an informed recommendation about how to manage any risk. If you learn that one or more of your trees needs to come down, it’s a good idea to get quotes from at least three tree removal companies. Generally, attempting DIY tree removal is not a good idea.

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 Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

SOPL-Q324-037

A “secured” personal loan is backed by an asset, called collateral, such as a home or car. An unsecured loan, on the other hand, is not collateralized, which means that no underlying asset is necessary to qualify for financing. Whether someone should pursue a secured or unsecured loan depends on a number of factors, such as their credit score and whether they have assets to put up as collateral.

If you’re planning to take out a loan, it’s important to do your research and find one that best fits your needs and financial situation. Learn more about when someone can and should take out a collateral loan.

Why Secured Loans Require Collateral

With a secured personal loan, a lender is typically able to offer a larger amount, lower interest rate, and better terms. That’s because if the loan isn’t repaid as agreed, the lender can take possession of the collateral. This is not the case with an unsecured personal loan.

Collateral allows secured personal loans to be offered to a wider range of consumers, including those who are considered higher risk. The reason is that the lender’s risk is offset by the borrower’s assets.

Fixed Rate vs Variable Rate Loans

There are other types of personal loans beyond secured versus unsecured. One important distinction is whether a loan has a fixed or variable interest rate. A fixed rate is just as it sounds: The interest rate stays fixed throughout the duration of the loan’s payback period, which means that each payment will be the same.

The interest on a variable-rate loan, on the other hand, fluctuates over time. These loans are tied to a benchmark interest rate — often the prime rate — that changes periodically. Usually, variable rates start lower than fixed rates because they come with the long-term risk that rates could increase over time.

Installment Loans vs Revolving Credit

A personal loan is a type of installment loan. These loans are issued for a specific amount, to be repaid in equal installments over the duration of the loan. Installment loans are generally good for borrowers who need a one-time lump sum.

An installment loan can be either secured or unsecured. A mortgage — another type of installment loan — is typically a secured loan that uses your house as collateral.

Revolving credit, on the other hand, allows a borrower to spend up to a designated amount on an as-needed basis. Credit cards and lines of credit are both forms of revolving credit. If you have a $10,000 home equity line of credit (HELOC), for example, you can spend up to that limit using what is similar to a credit card.

Lines of credit are generally recommended for recurring expenses, such as medical bills or home improvements, and also come in secured and unsecured varieties. A HELOC is often secured, using your house as collateral.

What Can Be Used as Collateral on Personal Loans?

Lenders may accept a variety of assets as collateral on a secured personal loan. Some examples include:

House or Other Real Estate

For many people, their largest source of equity (or value) is the home they live in. Even if someone doesn’t own their home outright, it is possible to use their partial equity to obtain a collateral loan.

When a home is used as collateral on a personal loan, the lender can seize the home if the loan is not repaid. Another downside is that the homeowner must supply a lot of paperwork so that the bank can verify the asset. As a result, your approval can be delayed.

Bank or Investment Accounts

Sometimes, borrowers can obtain a secured personal loan by using investment accounts, CDs, or cash accounts as collateral. Every lender will have different collateral requirements for their loans. Using your personal bank account as collateral can be very risky, because it ties the money you use every day directly to your loan.

Recommended: Secured vs Unsecured Personal Loans — What’s the Difference?

Vehicle

A vehicle is typically used as collateral for an auto title loan, though some lenders may consider using a vehicle as backing for other types of secured personal loans. A loan backed by a vehicle can be a better option than a short-term loan, such as a payday loan. However, you run the risk of losing your vehicle if you can’t make your monthly loan payments.

Pros and Cons of Using Collateral on a Personal Loans

Using collateral to secure a personal loan has pros and cons. While it can make it easier to get your personal loan approved by a lender, it’s important to review the loan terms in full before making a borrowing decision. Here are some things to consider:

Pros of Using Collateral

•   It can help your chance of being approved for a personal loan.

•   It can help you get approved for a larger sum, because the lender’s risk is mitigated.

•   It can help you secure a lower interest rate than for an unsecured loan.

Cons of Using Collateral

•   The application process can be more complex and time-consuming, because the lender must verify the asset used as collateral.

•   If the borrower defaults on the loan, the asset being used as collateral can be seized by the lender.

•   Some lenders restrict how borrowers can use the money from a secured personal loan.

Qualifying for a Personal Loan

Common uses for personal loans include paying medical bills, unexpected home or car repairs, and consolidating high-interest credit card debt. With secured and unsecured personal loans, you’ll have to provide the lender with information on your financial standing, including your income, bank statements, and credit score. With most loans, the better your credit history, the better the rates and terms you’ll qualify for.

If you’re considering taking out a loan — any kind of loan — in the near future, it can be helpful to work on building your credit while making sure that your credit history is free from any errors.

Shop around for loans, checking out the offerings at multiple banks, credit unions, and online lenders. Each lender will offer different loan products that have different requirements and terms.

With each prospective loan and lender, make sure you understand all of the terms. This includes the interest rate, whether the rate is fixed or variable, and all additional fees (sometimes called “points”). Ask if there is any prepayment fee that will discourage you from paying back your loan faster than on the established timeline.

The loan that’s right for you will depend on how quickly you need the loan, what it’s for, and your desired payback terms. If you opt for an unsecured loan, it might allow you to expedite this process — and you have the added benefit of not putting your personal assets on the line.

Recommended: Is There a Minimum Credit Score for Getting a Personal Loan?

The Takeaway

Using collateral to secure a personal loan can help borrowers qualify for a lower interest rate, a larger sum of money, or a longer borrowing term. However, if there are any issues with repayment, the asset used as collateral can be seized by the lender.

The right choice for you will depend on your financial situation, including factors like your credit score and history, how much you want to borrow, and what assets you can use as collateral.

Looking for a personal loan that doesn’t require collateral? Check out SoFi Personal Loans, which have competitive rates and no-fee options. Apply for loans from $5K to $100K.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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 .

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.

SOPL-Q324-030

It’s an honor to be asked to be a member of a friend’s or family member’s wedding, but it also comes with a cost. Between buying/renting attire, attending pre-wedding events, and purchasing gifts, it can run around $1,650 to be a bridesmaid and $1,600 to be a groomsman.

Just one wedding can take a bite out of your budget, not to mention the familiar scenario of attending several weddings in one year. We’ll help you understand the expenses that go into being a part of the big day so you can prepare and budget well in advance.

How Much Does It Cost To Be a Bridesmaid?

While the average bridesmaid can spend $1,650 to be a part of the bridal party, costs vary significantly depending on location of the wedding, number of events, and dress code. Before you agree to participate as a bridesmaid (or maid of honor), it’s important to consider what costs you may be responsible for.

Recommended: What Are Personal Loans Used For?

The Dress

Etiquette dictates that bridesmaids cover the cost of their dress, shoes, and any accessories the bride has selected for them to wear. According to The Knot’s 2023 Real Weddings Study (which surveyed nearly 10,000 couples who wed in 2023), the average bridesmaid dress cost is $130 per person.

You’ll likely also be responsible for any alterations, which can run from $45 to $150, depending on what adjustments are needed. While there are ways you can save — such as renting a dress — that decision is often not up to the bridesmaid.

Recommended: 2024 Wedding Cost Calculator with Examples

Hair and Makeup

Traditionally, if the bride requests everyone in the party have their hair and makeup done in a certain style, she will cover the cost. If, on the other hand, bridesmaids are given the option to opt in or do their own thing, the bridesmaids generally cover the cost of getting glammed up for the big day. The average cost of wedding hair for bridesmaids is $95, tack on another $90 for makeup.

Bachelorette Party

Bachelorette parties have gotten more elaborate in recent years. Typically, every attendant pays for their own expenses, while also splitting the cost to cover most, or all, of the bride’s expenses.

According to The Knot, the average cost of a bachelorette party in 2023 was $1,300 per person. Of course, the cost of attending a bachelorette party varies significantly depending on the type, location, and length of the event. Celebrations that last between one to two days cost, on average, $1,135 per attendee, while those that go on for three to four days can run $1,630. Also, the farther you need to travel to the event, the more you’ll need to spend. Guests who travel to the bachelorette party locale by plane spend an average of $2,000, while those who travel by personal car spend an average of $900 to attend the event.

Wedding Travel and Accommodations

For the wedding itself, the bridal party is typically expected to cover the costs of travel and accommodations, which can vary significantly depending on the location of the event and length of stay (with members of the bridal party possibly needing to arrive early or stay late).

On average, wedding guests who need to travel outside of their town or city to attend a wedding spend around $456 on travel and accommodations. You could end up spending significantly more if you’re covering travel costs for yourself and other family members, or if the wedding involves long-distance travel. When the wedding is local, travel costs are likely to be minimal.

Recommended: Guide to Saving Money on Hotels for Your Next Vacation

Gifts

Bridesmaids traditionally give shower and wedding gifts, which add to the cost of being in someone’s wedding. According to The Knot, the average bridesmaid bridal shower gift cost between $50 and $75, while the average bridesmaid wedding gift lands at around $170. A group gift may allow you to spend less while giving something nicer than you could afford on your own.

What Does the Maid of Honor Pay For?

Being the maid of honor generally doesn’t cost more than being a bridesmaid, but it does come with additional duties and a greater commitment of time. Generally, the maid of honor is there to assist with any tasks she can take off the bride’s to-do list. They may be involved in planning pre-wedding events and generally take charge of communicating with other members of the wedding party.

In some cases, the maid of honor might plan the shower and help cover the costs. However, these days, the cost of a wedding shower is more commonly covered by family.

Recommended: How to Save for Your Dream Wedding

What Do Groomsmen Pay for?

Groomsmen typically pay for their wedding attire, the cost to attend a bachelor party (which may include sharing the cost for the groom’s attendance), the cost to attend the wedding (which might involve travel and accommodations), as well as a wedding gift. Here’s a look at what it all adds up to.

Formalwear or Tuxedo Rental

Just like bridesmaids generally pay for their dresses, groomsmen typically pay for their wedding day clothing. This might be a suit, tuxedo, shirt and slacks, or another type of attire selected by the groom or couple. Typically the groomsmen’s attire is purchased or rented, but in some cases, a groom will let their wedding party choose from their own wardrobe, which can be a more affordable option.

If you need to rent a tux for the event, costs vary depending on what style, design, brand, and accessories you’ll need to wear. On average, you can expect to pay between $100 and $250 to rent a tux for the standard period.

Bachelor Party

Groomsmen normally take part in planning the bachelor party and may cover their own costs and the groom’s. According to a recent survey by The Knot (which included roughly 500 respondents who attended, or plan to attend, a bach party in 2023), the average cost of a bachelor party is $1,400 per person. The survey also found that the average bachelor celebration lasts for two days, and roughly one-fifth of attendees are flying to the party destination. Indeed, 29% of those surveyed are actually spending $2,000 (or more) to celebrate in a major metro city.

For guests who drove or were planning to drive to the event’s location, spending was less — averaging $1,000 per attendee.

Wedding Gift

Groomsmen are generally expected to give the couple a wedding gift, though they are not expected to spend more on a gift than other guests do. According to The Knot’s 2023 Real Wedding Guest Study, wedding party members spend an average of $160 on their gifts. If you want to save money, consider chipping in for a group gift with other wedding party members.

The Takeaway

It’s not unusual for a bridesmaid to spend $1,650, including the dress, bachelorette party, and gifts. Groomsmen may spend just a little bit less ($1600) for a rental tux, bachelor party, and wedding gift. Keep in mind, however, that the cost to be in someone’s wedding can run much higher or lower, depending on the location and style of wedding.

If you haven’t saved up enough money to be in a friend’s or family member’s wedding in advance, there are better options than throwing it all on a credit card. Personal loans are designed to help cover life’s big events. SoFi Personal Loans offer low fixed rates, no-fee options, and a quick and easy online application process. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

SOPL-Q324-038

Buying a house is a major step, and planning to purchase a home can be a lot of fun. You get to figure out where you’d hang your favorite artwork, plant a vegetable garden, put the PlayStation — and maybe contemplate taking on some DIY projects yourself.

But there’s another, more nuts-and-bolts aspect to your pursuit of the American Dream: how to budget for a house. Most people in the U.S. are homeowners, with the latest Census data revealing that 65.6% had attained this status in the second quarter of 2024. So that’s a good indicator that buying your own home is within reach.

Doing so will likely require you to be smart about your finances, both as you save and then take on the responsibility of owning a home. To help you be successful in this pursuit, read on for the intel you need, such as:

•   How do I know how much house I can afford?

•   What are the costs/fees to consider?

•   What will my ongoing costs be?

•   How can I budget for a house?

Up-front Expenses

First, consider how much you would have to fork over if you find that perfect center-hall Colonial or loft-style condo. Once an offer on a new home is accepted, there are certain costs the buyer needs to pay right off the bat and, in most cases, out of their own pocket. These are called up-front expenses. Here are a few to prepare for as you consider how to budget for a house:

Down Payment

You may have heard of the traditional 20% down payment guideline, which helps you avoid paying private mortgage insurance (PMI) on applicable loan programs. Additionally, a higher down payment can sometimes result in better mortgage loan terms (such as a lower interest rate) which may translate into lower monthly mortgage payments.

Yep, it’s a lot of money to try to save, but if you can swing it, in the long run, applying a 20% down payment will likely save you from paying thousands of dollars in additional mortgage interest over the life of the loan. Can’t pull together that big a chunk of change? Look into your options for a mortgage lender with lower or no down payment. Some options:

•   The minimum down payment for a first-time homebuyer on a conventional loan can be as low as 3%. You may also need a certain credit score of, say, 620, to qualify for this kind of mortgage.

•   An FHA government loan that is open to everyone typically requires a down payment of at least 3.5%.

•   Veteran VA loans or government USDA loans may allow eligible borrowers to finance up to 100% of their home’s cost. In other words, no down payment is required.

It’s worth noting that, regardless of the size of your down payment, buying may still significantly reduce your overall monthly expenses, compared to your current rent and real-estate market conditions.

3% to 5% Closing Costs

You can likely expect to pay an estimated 3% to 5% of your home price for closing costs, and should save accordingly. For example, if you buy a home that costs $300,000, you may be required to pay between $9,000 and $15,000 in closing costs.

Worth noting: Some costs are fixed and not tied to the price. In these cases, the percentage can be higher for the lower range and lower for the higher purchase price range.

What exactly comprises closing costs? This can be bank charges like origination fees and any points you may have purchased to buy down your interest rate. There are also costs like the appraisal fee, a title search, and others.

Keep in mind that there are alternatives to paying the closing costs out-of-pocket, such as requesting a seller credit, requesting a lender credit, or tapping an applicable down payment assistance program. These can help you minimize this expense.

Moving Costs

Don’t forget when budgeting for buying a house that you will need funds to actually move in. Unless you’re lucky enough to have a generous pal with a van, you are probably going to have to hire a moving company when it’s time to get settled in your new home. The average cost of moving the contents of a three-bedroom home 1,000 miles is $4,800 according to research by U.S. News & World Report.

These costs can vary widely, of course. If you are moving with just a bedroom’s worth of furniture versus a whole house, your price tag will be lower. It’s wise to comparison-shop for moving companies and factor this expense into your own budgeting for a home move.

If you are moving for work reasons, check with your company to see if it offers a relocation package to help cover some or all of the moving costs.

New Furniture and Appliances

Your new house may not have the same dimensions and style of your old house. That could mean that you need to buy new furniture and appliances. When budgeting for buying a house, you might want to talk to friends or relatives who have moved recently and inquire about unexpected expenses as well. For example, it’s not uncommon when you move to have to purchase such items as new locks, shower rods, and window treatments. These can add up quickly.

You might want to start a savings account for these types of purchases — some of them may be unexpected and costlier than you imagined.

Recommended: First-Time Homebuyer Guide

Ongoing Expenses

Now that you’ve figured out the details related to the actual purchase, consider the expenses that will accrue once you are a homeowner. This is a very important step when budgeting for buying a house. These recurring charges are a vital part of the calculations of how much home you can afford.

Monthly Charges

First, consider how much you’ll be spending every month on your monthly mortgage payment and related costs. PITIA (principal, interest, property taxes, homeowners insurance, and other assessments) is an acronym describing all the components of a mortgage payment. Here’s how it breaks down:

•   P: The principal is the “meat” of the monthly payment amount — paying down the principal will reduce the loan balance.

•   I: Interest is what you are charged for borrowing the money.

•   T: Taxes refer to your property taxes.

•   I: This “I” refers to insurance. This includes both your homeowners and mortgage insurance, if applicable.

•   A: The other assessments refer to things that may be applicable to the home you purchase such as homeowners association dues, flood or earthquake insurance, and more.

HOA Dues

HOA stands for homeowners association. These dues usually apply to a condo, co-op, or property owned in a planned community.

The charge is usually monthly (but it could also be charged quarterly or annually), and it typically goes to maintaining the community (landscaping, garbage collection, repairs, and upgrades).

Before purchasing a property with HOA dues, it can be important to ask the Homeowners Association for a complete HOA questionnaire. With this in hand, you can view how healthy the association is, whether there is any outstanding litigation due to structural or other issues, etc. These could mean increased costs down the road.

Maintenance and Lawn Care

Your budgeting probably won’t stop once you’ve moved and settled into your new home. Expenses will likely continue to knock on your door — landscaping, roof repair, and water heater replacement are just a few items that might require ongoing financial consideration.

You may want to budget for 1% to 4% of the cost of your home in maintenance each year to pay for these expenses. However, deferred maintenance costs may require more funding, depending on the age, quality of construction, where you live, and more.

Pest Control, Security, Utilities

The cost of electricity, gas, water, and internet services differ from market to market. This is also true with pest control, and services that help ensure your home is secure and safe. You could find yourself paying more (or even less) for these services in your new home.

How Much House Can You Afford Quiz

Planning Ahead

So now that you understand the costs associated with homeownership, whether they are one-time or ongoing, you can get to work on how to budget for a house.

Ideally, you want to cover the homebuying costs and then be able to afford your monthly carrying costs without racking up debt. The standard advice is that your monthly housing expenses should account for up to 28% of your monthly pre-tax income. Given how expensive some housing markets can be, it’s not uncommon to find people spending more than that right now.

Here, some advice on figuring out what you can afford.

Target Mortgage Costs

Do your research on the different types of mortgage loan programs. Determine what your price range is given the current interest rates. Find the programs that may best suit you, so you’ll feel confident you can bid and afford a home once you have your down payment saved. Don’t forget to factor in those other PITIA expenses mentioned above as you think about your own monthly income and cash outflow when you’re a homeowner.

Build a Budget

Once you have these costs calculated, you can then start budgeting for buying a house. You’ll want to accumulate your down payment, while taking care of current bills and other financial obligations, of course.

•   Create a line item budget. You’ll want to note how much money you have coming in and how much goes out toward your needs (housing, food, medical expenses, debt repayment). Then you’ll see what’s left for your wants (think travel, dining out, clothes, entertainment) and start saving it, whether for your future home or retirement.

   Don’t skimp, though, on establishing an emergency fund. In a pinch, these funds can keep you from using your credit card and running up even more debt.

•   Assess where you can save more. To ramp up your savings for your house, look for ways to economize. Could you drop a subscription or two to streaming channels, or perhaps eat out less often?

   Also see what you can do to avoid high-interest credit card debt, which can take a bite out of anyone’s budget. You might want to take advantage of a zero-interest balance transfer credit card offer, or investigate whether a lower-interest personal loan could help you pay off your debt and save money.

•   Use automatic transfers. Help yourself hit your savings goals by automating payday transfers from checking to savings. That way, you won’t see the cash in your account and be tempted to spend more.

•   Bring in more moolah. If the numbers aren’t adding up to bring your homebuying plans within reach fast enough, consider using windfalls (a tax refund, a bonus at work, a birthday gift of cash from a relative) to plump up your savings. Also think about ways to bring in more income, whether by asking for a raise or pursuing a side hustle.

The Takeaway

Budgeting for buying a house requires thinking about both short-term costs, such as a down payment, closing costs, and moving expenses, as well as long-term costs such as homeowner’s insurance and maintenance expenses. It’s wise to look at both before you pursue a mortgage preapproval or make an offer on a home.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How much money should you save before buying a house?

If possible, you should save enough money for a down payment on a house in the price range you’re thinking about. But you don’t need to make a 20% down payment — many homebuyers put down less, and some government programs will allow you to buy with no down payment at all. You’ll also want to have closing costs on hand (3% to 6% of the home’s price). And it’s wise to always have an emergency fund in case of an unexpected setback.

How much do I need to earn to afford a house?

How much you need to earn to afford a house depends on the housing market you’re looking in and the area’s overall cost of living. The national average salary is $63,795 and at that salary you may be able to afford a home priced at $180,000. Use a home affordability calculator to explore the numbers for your specific situation.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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.

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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For both buyers and sellers, real estate inventory is a key factor to note. When inventory is abundant, buyers may have the upper hand. If the list of available properties is short, sellers may be able to command higher prices. This means that whether housing inventory is high or low can impact your strategy if you are hunting for a home or trying to get yours sold.

It pays to keep your eye on the market, as inventory can sometimes change swiftly. In recent memory, we’ve seen a pandemic-fueled buying frenzy that fueled bidding wars. As mortgage rates rose, some markets evolved into low-demand, high-availability scenarios.

Here’s a closer look at how to gauge the local real estate market and navigate high and low housing inventory through the perspective of buyers vs. sellers.

What Is Housing Inventory?

An area’s real estate inventory can be thought of as the current supply of properties for sale. The housing inventory will increase or decrease according to the difference between the rate of new listings on the market and the number of closed sales or houses taken off the market for other reasons.

Although this calculation can be done at any time, it’s common practice to assess the balance at the end of the month. Comparing monthly figures can show if housing inventory is trending up, down, or staying relatively stable.

If there appears to be a rapid trend in either direction, it may signal the need to take quick action on a purchase or sale (seeking preapproval for a home loan, for example), or take a wait-and-see position and hold off for a while.

Even within a town or city, real estate inventory can vary significantly. To better understand your local housing market trends, you can dig deeper into important indicators like average time on the market and average price of nearby homes or in your desired neighborhood. Next, we’ll delve into this in more depth.

High Housing Inventory

An area with a high housing inventory has more properties on the market than there are people looking to buy. This can also be referred to as a buyer’s market, since the larger selection of homes usually favors prospective buyers more than sellers.

These conditions may cause the price of homes to stagnate or, in more extreme cases, fall. Typically, the average property will also take longer to sell in this environment.

Still, there’s a huge variety of financial situations and unique property characteristics out there. Each case will be different, but here are some considerations if you’re buying or selling during a moment of high housing inventory.

If You’re a Buyer Amid High Housing Inventory

In many cases, shopping for a new home during high housing inventory can be a blessing.

•   Take it slow (or at least slower). You may be able to see multiple properties before making an offer and size up which home best suits you. High housing inventory means there are fewer buyers to compete with, so there’s less of a risk that homes will quickly get scooped up.

•   Shop around. Knowledge is power when it comes to making an offer. Having viewed comparable houses in the area firsthand could help when it’s your turn at the negotiating table.

•   Do your research. Other property details, such as price reductions and total days on the market, are potential indicators that sellers might be ready to accept an offer below asking price.

Although buyers can have a comparative edge when housing inventory is high, there is, of course, still a chance of multiple offers and bidding wars for well-priced homes. There are likely to be others who want to take advantage of what may be called a soft market in real estate terms.

Recommended: A Guide to Real Estate Counter Offers

If You’re a Seller Amid High Housing Inventory

Putting a property on the market in a location with high housing inventory may require investing more time to find the right buyer. After all, you’re not the only game in town. However, there are several strategies at a seller’s disposal to unload a house without financial loss.

•   Fix it up. To stand out in a crowded field, it can help to address any persisting issues and accentuate your home’s best assets. Parts of the property in need of common home repairs — the foundation, electrical system, HVAC system, and so on — could discourage potential buyers. Instead of accepting lower offers or other concessions, sellers may save more money by handling the repairs before putting the house on the market.

•   Improve it. Making improvements can be helpful, too. A kitchen reno may be out of reach in terms of time and money, but doing a thorough cleaning and tidying up landscaping are easy fixes that could make a better impression on prospective buyers.

•   Declutter. It’s another way to enhance a house for showings and listing photos. It could also indicate a shorter turnaround for buyers eager to move quickly.

•   Price it right. When all is said and done, setting an asking price that’s not too far above similar properties may be necessary to keep your property on buyers’ radar.

Low Housing Inventory

Also known as a seller’s market or a hot housing market, an area with low housing inventory has a surplus of interested homebuyers and a shortage of available listings.

Usually, sellers in an area with low housing inventory can get a higher price for their property. Thanks to the abundance of buyers, It’s not uncommon to see multiple offers and bidding wars for any type of housing stock.

Let’s take a closer look at how to make the most of low housing inventory for either side of the deal.

If You’re a Buyer Amid Low Housing Inventory

Although the odds may not favor buyers in a low housing inventory environment, they still have some options to increase their chances of finding a dream home.

•   Think beyond price. In a multiple-offer situation, the highest price may not be the most advantageous deal for the seller. Being flexible on the closing date and limiting contingencies can affect an offer’s competitiveness.

•   Get prequalified or preapproved. Doing the legwork, researching the different kinds of mortgages in advance, and getting prequalified can show that buyers are ready to go and financially eligible. Typically, lenders provide potential borrowers with a letter stating how much they can borrow, given some conditions.

◦   Preapproval, which involves analysis of at least two years of tax returns, months’ worth of income history and bank statements, and documents showing any additional sources of income, can carry more weight and speed up the mortgage application process.

•   Consider cash. If you can swing it, a cash offer is often seen as advantageous because there’s no risk of the deal falling through from a denied mortgage loan.

•   Opt for an escalation clause, a method for beating out competing bids. The clause means a buyer automatically will increase their initial bid up to a specified dollar amount. For example, a buyer with an escalation clause could offer $250,000 with an option to bump up to $255,000 if another offer exceeded theirs.

•   Know what a place is worth. Even in a seller’s market, house hunters would do best to keep appraised values in mind. If buyers pay thousands more than the appraised value of a house, their home equity could take a hit.

If You’re a Seller Amid Low Housing Inventory

When the forces of supply and demand favor sellers, they have a better chance of fielding multiple offers on a property. Still, getting a great deal is not a sure thing as many factors affect property value. Here, some advice to help you take advantage of this scenario.

•   Spruce it up. The same conventional wisdom applies for cleaning and touching up a house to get more foot traffic at showings or open houses.

•   Set a reasonable asking price just below the market value — a figure based in part on comps, or comparables, which reveal what similar homes in the same area have sold for recently. This can be a good way to capture buyer interest. In a multiple-offer situation, this gives buyers room to outbid each other, potentially increasing the purchase price above asking.

•   Look past price alone. If faced with more than one offer, it may be tempting to go for the highest bidder. It can be beneficial to review each buyer’s finances and contingencies to lower the risk of a deal falling through.

•   Recognize that cash is king. Cash offers are generally the most secure. These have risen significantly in the current hot market, according to a National Association of Realtors® report. They made up 32% of sales in February of 2024, the highest rate in a decade.

•   Check contingencies. If there are offers with contingencies like the house passing an inspection, they could allow a buyer to back out of a deal; an offer that waives such contingencies is likely preferable.

Recommended: What Is a Mortgage Contingency? How It Works Explained

Other Considerations When Buying a Home

Housing inventory can be an important factor when looking for a new home and may impact your experience in a positive or negative way. Knowing how to negotiate both scenarios, whether as a buyer or seller, can help you get the best deal with the least amount of stress.

You’ll also have other considerations to keep in mind as you shop for your home. These may include:

•   How much you can put down

•   What type of mortgage works best for you

•   How much your mortgage will cost

•   What your closing costs will be

•   How much you’ll need for any necessary renovations

•   What the property taxes are

The Takeaway

For both buyers and sellers, the amount of available housing inventory can have an impact on the home purchase process. Keeping tabs on the market you’re shopping or selling in and looking carefully at competing properties (buyers) or competing offers (sellers) can help you get the most from your real estate deal.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

What does inventory mean in real estate?

Inventory is the number of properties available for sale in a particular real estate market. It is often recorded once a month, so that trends can be observed.

Why is housing inventory so low?

Several factors have contributed to low housing inventory: During the Great Recession that began in late 2007, construction of new homes declined and took many years to recover. More recently, mortgage rates trended upward, causing many people who might have sold a starter home to stay put rather than put their home on the market. Finally, investors have been buying up available properties and renting them out, taking them out of the sale market.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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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