SoFi

As a homeowner, home window repair is a fact of life. Sometimes, you don’t have a choice—perhaps because of storm damage. Other times, you might replace the windows as part of a remodel to change the aesthetics of a space, or to reduce energy costs.

Sometimes, you’ll need to decide between window repair and replacement. Then, you’ll need to select options in materials and glass. When talking to an expert about repairing or replacing windows, you may hear new lingo. The person will likely want to discuss the window frame, as well as the following:

•  Sill: That’s the strip running horizontally across the frame’s bottom.

•  Jamb: Those are the sides of the frame, running vertically.

•  Head: That’s the strip running horizontally across the frame’s bottom.

•  Sash: Some windows have one or more panels that move; the material that forms the frame that

•  holds these individual panes is the sash.

•  Stiles: These are sections of the sash that run vertically.

•  Rails: These are sections of the sash that run horizontally.

Here’s what you need to know about window replacements, cost considerations, and tips for financing the project.

Repairing vs Replacing Windows

If you’re having issues with your windows, you may be wondering whether or not you actually need to replace the window. Here are a few things to consider when trying to decide if you are going to fully replace windows or simply do a few small repairs to make sure they are still functional.

First, if you have one or more windows with cracked or otherwise broken glass, but frames are still solid—and you’re satisfied with how they look—it probably makes sense to just replace the glass with a quality product.

If you have double-pane windows, ones where two panes of glass are separated by a space (gas- or vacuum-sealed) to reduce heat transfer and increase efficiency, know that the seals can also break. You can tell if seals are broken with this simple test: If the window fogs up, you should be able to wipe the condensation off of the window, either from the inside or outside.

If you can’t, the seal is most likely compromised. If this happens, it’s highly unlikely you can simply replace the glass. But, if the frames are solid, you could still replace the panes, sashes, and seals. And be aware that if you have triple-paned windows, this seal breakage could happen in even more places.

Do you actually feel air coming in through a window? If so, you can caulk or weather-strip the trouble spots and see if this solves the problem. Are there small spots of wood that are rotting? If so, you can try scraping away rotted areas, then making putty repairs and repainting. Did you fix the problem? If repairs for either issue (air leaks or rotting wood) don’t solve the problem, that window will likely need replaced.

Here’s another issue to consider. Is the window stuck? There are a few different troubleshooting things to try, including looking for broken hardware pieces and replacing them; or scraping away paint, sanding down the area, opening up the window and cleaning the tracks. If one of these solves the problem, great. If not, then you’ll either need to replace them.

Finally, here is a benchmark to consider: Perhaps you fixed the problem, but the window is warped or otherwise damaged. This is a sign of issues to come and, as with most maintenance, being proactive about window replacement usually makes the most sense.

Benefits of Replacing Windows

If you decide that it is time to replace some or all of the windows in your house, you will likely cut your energy costs once the project is completed. According to ENERGY STAR® , windows granted the ENERGY STAR seal of approval can lead to the following annual savings for a typical home:

•  $126 to $465 when replacing single-pane windows

•  $27 to $111 when replacing double-pane windows that are clear glass

When you replace windows, you are also adding to the sales potential of your home, partly thanks to the energy savings. They also add to the curb appeal of the house, because windows are one of the most obvious features of a home as people walk or drive by. If the windows look old or poorly maintained, then potential buyers may conclude that the entire home needs maintenance, which may not be true at all.

And if you’re installing new windows as a way to invest in your home, consider larger ones that let in more natural light. Using daylight to brighten up your home has been found to be beneficial to people, enhancing productivity and improving mood. Natural light can help fine-tune circadian rhythms, which can add to a better sense of well-being.

Types of Window Materials

In general, you’ll need to choose what type of glass you want and what type of frame/sash materials. There are numerous materials you can choose from for your windows, ranging from vinyl to wood, fiberglass to aluminum and more. Vinyl choices are typically the most affordable and are usually low maintenance and durable. They can last a long time, since this material doesn’t peel or fade, chip, or rot.

For a traditional look, you can choose wood. They provide an elegant appearance, but typically come with more maintenance because wood can warp and rot, and paint will eventually chip and peel. Wood is almost always more expensive than vinyl.

Fiberglass is a little more expensive than vinyl, but can offer more durability and provide more energy efficiency. Scratches and nicks are harder to see, which is good; and, because the material doesn’t expand or contract to any significant degree, you seldom have to worry about air leaks.

Aluminum frames and sashes are long lasting and durable, and you can choose from numerous colors and finishes. This material creates a more modern look than wooden ones. And, although this material can be less efficient because the metal conducts heat, you can select ones with thermal breaks to minimize the issue.

You can also choose clad windows that are wooden inside your home, to provide a beautiful appearance, but vinyl, aluminum, or fiberglass on the outside where durability is more important. These windows are typically more expensive, but they do provide a versatile approach.

If you’ve got an historic home and you want to return your home to its original integrity, you may need to work with a company that can customize windows for you. The wrong style of window and use of anachronistic materials can significantly mar restoration efforts.

After you’ve selected material for the frame, you’ll have to decide on the type of glass. There are a few different types of glass, and they all have different functions—so do your research or work with a professional to find the best option for your home. Types of window glass include the following:

•  Insulated glass: These windows have at least two panes apiece, hermetically-sealed ones divided by spacers.

•  Heat-absorbing tinted glass: Because these windows can absorb heat from the sun, they can keep your home or business cooler. Plus, they reduce glare.

•  Reflective-coated glass: This can also reduce glare and heat in the home.

•  Gas-filled glass: These are insulated, gas-filled units that provide more insulation than just air. Gases used are usually krypton or argon.

•  Low-emissivity-coated glass: These windows can provide significant savings in energy costs in colder climates.

•  Spectrally-selective-coated glass: These allow in light while filtering out significant amounts of heat.

Window Replacement Cost

Home Advisor provides guidance into typical window replacement costs in 2018. Replacing windows can be an expensive project, but it could ultimately improve the value of your home. While prices vary based on a few factors, like where in the country you live and the size of the windows, these general estimates could give you an idea of what replacing windows might cost you.

•  Single-hung windows: $175 to $350 per window

•  Double-hung windows: $300 to $800 per window

•  Sliding windows: $325 to $1,200 per window

•  Casement windows: $275 to $750 per window

Using a Personal Loan When Installing New Windows

Once you’ve decided how many windows you will replace and what the window replacement cost will be, consider taking out a home improvement loan to fund the repairs. You can use the SoFi personal loan calculator to determine what a personal loan with SoFi could look like.

At soFi, you can get a low-rate personal loan with no fees required when you’re ready to repair or replace your windows. You can quickly and easily find your rate and complete an application online. Live customer support is available seven days a week, and if you lose your job through no fault of your own, you can apply for Unemployment Protection—we can even assist you in your job search.

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.
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.
PL18221

Homeownership can be both rewarding and a great financial decision for your future. But as anyone who has dipped their toes into the home-buying process knows, the pressure to find and secure the “right” mortgage loan can feel overwhelming, especially if you’re a first-time home buyer.

During the early stages of the home-buying process—perhaps while you’re researching neighborhoods and schools, shopping around for properties, and nailing down the details of your budget—it would serve you well to do some research into the types of mortgages available. That way, you’ll feel prepared when the time comes to put down an offer on the perfect home.

As you’ve likely noticed, there are quite a few mortgage loan types available to borrowers. Brace yourself, because the process definitely requires you harness your best inner comparison shopper. You’ll need to consider the ins and outs of each option alongside your personal and financial needs. To help make the decision a bit easier, we’ve compared the advantages and disadvantages of each mortgage type below.

Fixed-Rate Versus Adjustable-Rate Home Loans

First, it’s helpful to know that most home loans come with a fixed or adjustable interest rate. A fixed-rate mortgage means that your interest rate will never change. In other words, your monthly mortgage payment is locked in. Fixed-rate mortgages generally come in 15 or 30-year loans.

A 30-year fixed-rate loan is the most common, though you can save a lot in interest if you opt for a 15-year loan. Monthly payments on a 15-year loan will be much higher than for a 30-year mortgage, so it’s best to commit only if you’re confident that it works in your budget—even in the event of a financial emergency.

An adjustable-rate mortgage, called an ARM, has a fixed, usually lower rate for an initial period and then increases to a more expensive, floating rate tied to the market interest rate index. ARMs are often expressed in two numbers (like 5/1 or 2/28), although those numbers don’t follow one particular formula (they could represent years, months, number of annual payments, etc.). For example, a 5/1 ARM has five years of fixed payments and one change to the interest rate in each year thereafter.

It’s easy to be drawn to the lower initial rate offered on an ARM, but it very well could end up costing more in interest than a fixed-rate loan over the lifespan of your mortgage. An ARM might work best for someone who plans to pay off their mortgage in five years or less, or is committed to refinancing prior to the ARM’s rate increase.

Rate increases in the future could be dramatic although there are limits to the annual and life-of-loan adjustments, often leaving adjustable-rate mortgage-holders with much higher monthly payments than if they had committed to a fixed-rate mortgage.

Types of Government Home Loans

The government does not actually lend money to home buyers. Instead, “government home loans” is a catchall for loans that are insured or guaranteed by various government agencies in the event the borrower defaults. This makes the loan less risky for lenders, and allows them to provide mortgages at reasonable rates.

Federal Housing Authority (FHA) Loans:

FHA loans are one of the most popular government loan types for first-time home buyers, because they have the more lenient credit score requirements and down payment requirements. With a 580 credit score, you might qualify with a 3.5% down payment. For more, check out the FHA’s lending limits in your state.

Pros: Because FHA loans are ubiquitous and have lower down payment and credit score requirements, they are one of the most accessible loans. FHA loans give potential homeowners a chance to buy without a big down payment. Additionally, FHA loans allow a non-occupant co-signer (as long as they’re a relative) to help borrowers qualify.

Cons: Historically, the requirements for FHA mortgage insurance have varied over the years. Currently, an FHA loan requires both an up-front mortgage insurance premium (which can be financed into your loan amount) and monthly mortgage insurance. The monthly mortgage insurance has to stay in place until your loan-to-value ratio reaches 78%.

USDA loans:

The U.S. Department of Agriculture provides home loans in rural areas to borrowers who meet certain income requirements. USDA loans offer 100% financing—so no down payment is necessary—and require lower monthly mortgage insurance (MI) payments than an FHA loan. This type of mortgage loan is offered to “rural residents who have a steady, low or moderate income, and yet are unable to obtain adequate housing through conventional financing.” To find out if you qualify, visit the USDA income and property eligibility site .

Pros: USDA loans come with low monthly MI, and they are accessible loans for low-moderate income borrowers in rural areas.

Cons: You need a credit score of at least 640 to qualify. These loans, like an FHA loan, also require an upfront fee which can be financed into your loan. If you are obtaining a loan with no down payment, this could result in a loan balance higher than your loan amount.

VA loans:

The U.S. Department of Veteran Affairs provides loan services to members and veterans of the U.S. military and their families. If you are eligible , you could qualify for a loan that requires no down payment or monthly mortgage insurance.

Pros: You don’t have to put any money down or deal with monthly MI payments, which could save borrowers thousands per year.

Cons: These loans are great to get people in homes, but are only available to veterans.

FHA 203k rehab loans:

FHA 203k loans are home renovation loans for “fixer upper” properties, helping homeowners finance both the purchase of a house and the cost of its rehabilitation through a single mortgage. Current homeowners can also qualify for an FHA 203k loan to finance the rehabilitation of their existing home.

Many of the rules that make an FHA loan relatively convenient for lower-income borrowers apply here. An FHA 203k loan does not require the space to be currently livable, but it does generally have stricter credit score requirements. Many types of renovations can be covered under an FHA 203k loan: structural repairs or alterations, modernization, elimination of health and safety hazards, replacing roofs and floors, and making energy conservation improvements, to name a few.

Pros: They can be used to buy a home and fund renovations on a property that wouldn’t qualify for a regular FHA loan. And they only require a 3.5% down payment.

Cons: These loans require you to qualify for the price of the home plus the costs of any planned renovations.

Conforming Home Loans

Conforming home loans are a type of mortgage offered by private lenders. They are not insured by the government, but meet standards set by Fannie Mae and Freddie Mac (government sponsored agencies). As of 2018, the conforming loan limit is $453,100 in most of the U.S. and goes up to $679,650 in certain higher-cost areas.

Conventional Home Loans:

Conventional loans are the single most popular type of mortgage used today. These are slightly more difficult to qualify for a conventional loan than a government-backed loan. However, borrowers can obtain conventional loans for a second home or investment property.

Conventional loans typically require a minimum of a 620 credit score and a down payment between 5% and 20%. Private Mortgage Insurance (PMI) ) if you put 20% down. If you put less than 20% down, PMI is required but you have options. PMI can be paid monthly or can be an upfront premium that can be paid by you or the lender. Monthly PMI needs to stay in place until your loan-to-value ratio reaches 78%.

Pros: Pretty much any property type you’re considering would qualify for a conventional mortgage. And you have greater flexibility with mortgage insurance if you are putting down less than 20%.

Cons: Conventional loans tend to have stricter requirements for qualification and require a higher down payment that government loans.

Conventional 97 Mortgage:

Fannie Mae and Freddie Mac’s conventional 97 loan was made to compete with FHA loans. It requires a 3% down payment or 97% loan-to-value ratio, besting the FHA’s 3.5% down payment requirement. A conventional 97 loan also requires that at least one borrower be a first-time homeowner, which they define as someone who hasn’t owned a property in the past three years. Participants in this program will need to have good credit scores and the standard 43% debt-to-income ratio.

Pros: You only need to put down 3%.

Cons: Only single-unit properties qualify, and one of the borrowers must be a “first-time buyer.”

Non-Conforming Loans

If you need a loan that exceeds the limits of both a conforming loan and a government-backed loan, you’ll need a non-conforming loan. A non-conforming loan exceeds the limits set forth by Fannie Mae and Freddie Mac.

Jumbo Loans:

Because of their size, jumbo loans tend to have even stricter requirements than regular, conforming loans. Most jumbo loans require a minimum credit score above 700 and a down payment of at least 15%.

Super Jumbo Loans:

For financing of $1 million or more, you are going to need to take out what is called a super jumbo loan. These loans require excellent credit and can provide up to $3 million in financing.

Those looking to fund an expensive property purchase will likely have little choice but to use a jumbo or super jumbo loan. If that’s you, it might require taking some time to get your credit score in good shape.

The process of finding and securing the right mortgage loan requires a little bit of investigation and a whole lot of patience. Happy hunting!

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Mortgages not available in all states. Products and terms may vary from those advertised on this site. See SoFi.com/eligibility-criteria#eligibility-mortgage for details.

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It goes a little bit like this: You’re on a much-needed vacation with your family, having daiquiris on the beach while the kids have the time of their lives playing in the surf. Everybody is happy— you want to come back here every summer.

Then, a timeshare salesman approaches you in the resort lobby and offers you a free three-course dinner at a top restaurant in exchange for hearing out his pitch: a timeshare on this very beach, a great investment opportunity, and a deal that’s on the table for one day only.

The high-pressure timeshare salesman has become a cliché of resort towns everywhere, and with good reason. The timeshare loans they sign vacationers up for often have a high rate of default. But timeshares are still a popular way to vacation, and there are savvy ways to finance a timeshare. In fact, according to the American Resort Development Association (ARDA), 9.2 million U.S households own a timeshare. And some even own several timeshares.

So, are timeshares a good idea? It depends on how you think about it. If you’re looking for a vacation spot you can use whenever you want, you are likely in for an expensive disappointment. But if you’re looking for a vacation spot you can come back to time and again in your favorite location, it might make financial sense.

Staying in resorts and eating out can get expensive. Buying a vacation home can be even more expensive. If you understand that you’re purchasing a timeshare not as an investment but as a vacation experience—to spend time in with family and friends, it may actually be less costly and less stressful than other vacation options.

While purchasing a timeshare comes with risks, there are ways to be smart about timeshare financing. In this article, we’ll walk you through some timeshare financing options, so you can understand how it works and make a decision that’s right for your budget.

How to Finance a Timeshare Responsibly

When you buy a home, you typically finance it with a mortgage. When you buy a car, you can finance it with an auto loan. But there’s no direct lending market for timeshares, and on top of that, they usually don’t increase in value over time.

So what are your timeshare financing options? First, let’s look at how not to finance a timeshare. The first option most interested buyers are faced with is developer financing. Typically, a timeshare resort developer works with a lender that offers high-interest personal loans, and they encourage you to make a decision right away while you’re at the presentations. According to ARDA, buyers pay an average of $20,000 for a timeshare interval, though prices can range from depending on the property.

Developer financing is often proposed as the only timeshare financing option, especially if you buy while you’re on vacation. Another option, however, is to plan ahead. If you’re ready to purchase a timeshare, secure financing beforehand so that you have the funds in hand when you negotiate the sale. This way you have time to shop around for a good financing deal—and possibly save up some money to put toward the purchase as well.

Choosing a Vacation Home

When you purchase a timeshare, you’re sharing the property with a number of other timeshare owners and typically have the right to use the property at the same time every year.

You can trade days with other owners and sometimes even try out other properties around the country (or around the world) in a trade. In addition to the initial purchase price, you’ll also be required to pay your share of the maintenance fees that cover the costs of property upkeep and cleaning. These maintenance fees often increase over time.

Once you’ve considered the financial responsibilities that come with the timeshare and your budget, choosing the right place often comes down to where you want to be, and what you need in terms of space and amenities.

Since selling a timeshare can be difficult and sometimes involve a financial loss, you’ll want to make sure you’re purchasing a timeshare in a place that your family will want to return to for a long time—and can easily get to. That way you don’t end up paying for a place you don’t use.

Preparing Financially for a Timeshare

A good financial scenario to be in when buying a timeshare is to have a steady income that will allow you to keep up with maintenance fees and travel to your timeshare each year. If you plan to finance the purchase, look over your financial profile and creditworthiness.

Your income, creditworthiness, the term of the loan and other factors, will determine the rates that lenders will offer you. Resolving any issues impacting your credit score may help improve your financial profile.

You’ll also want to consider your budget over the next few years. Are there any other major purchases you are planning to take on? Do you anticipate a new added cost like a new family member? Any type of financial shift in coming years should be accounted for before you finally sign on.

Smarter Ways to Finance a Timeshare

There are a few alternatives to financing a timeshare with financing offered by a developer. Of course, you can wait and save up the cash to purchase the timeshare outright. If you’re looking to finance the purchase, there are still several good options.

One option is to use a current credit card. This option often involves less paperwork, but does come with a high cost in terms of interest rates. This option should be used if you are putting most of the purchase price down in cash up front and just need to put the last little bit on a credit card. You should also only do this if you are certain you can pay off the remainder in a relatively short amount of time.

Taking out a home equity loan is another option. With a home equity loan, you are borrowing money against the value of your home. These loans can be relatively easy to secure from a lender, because your home is often used as collateral.

They also come with potentially much lower rates than other types of loans . There are a few drawbacks, however: There’s more red-tape and risk as you’re putting your home on the line. Home equity loans are typically used for expenses or investments that will improve the resale value of your primary residence.

Securing a personal loan at a competitive interest rate can be an even better solution for financing a timeshare. Depending on your financial profile, you may qualify for a much lower interest rate than financing from a developer or a high interest rate credit card would offer. A personal loan also allows you to choose terms that work for you. On top of that, a personal loan is relatively easy to secure.

Timeshares are often thought of as a way to guarantee vacation time in your favorite location each year without having to buy a second home. If you do your homework and weigh the risks, they can be a good way to vacation with family and friends and make a lot of memories along the way.

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 on credit.

PL18150

Thinking of buying a home this year? With interest rates, rents and housing prices all on the rise, this could be an opportune time to make it happen – and an interest-only mortgage loan might be the thing that makes it possible.

How Does it Work?

While not for everyone, an interest-only mortgage offers a host of advantages for some borrowers. As the name suggests, these loans allow you to pay only the accrued interest on the loan each month for a period ranging from 5 to 10 years.

Because you make lower monthly payments during this timeframe, you enjoy increased financial flexibility (meaning you can invest the difference or choose to pay principal in conjunction with a bonus or other cash influx).

After the interest-only period expires, the loan converts to a more standard structure where both principal and interest are paid on a monthly basis. At this point, you’ll see your mortgage payment go up – sometimes substantially.

Because of this, interest-only loans are typically better for borrowers who expect to be able to cover those higher payments in the future – for example, if you believe your income will increase before the interest-only period is up.

A Checkered Past

Interest-only mortgages have been around for decades, but for the most part they weren’t attractive to the masses. Typical borrowers were often affluent homeowners who viewed their homes as part of an investment portfolio: interest-only mortgages provided the opportunity to seek better returns with the capital that would otherwise have been used to make a higher mortgage payment.

Then came the housing bubble of 2004 – 2006, when lenders started approving interest-only loans for unqualified borrowers who wanted to keep mortgage payments low while trying to flip houses as quickly as possible.

After the bubble burst in 2008, the market for interest-only loans went dormant for several years – and these products were left with a less-than-favorable reputation.

The Opportunity Today

Between the current economic environment and the advent of new interest-only loan products, this type of loan is once again worth considering for some borrowers.

Again, the main stipulation is that you’re not biting off more than you can chew – meaning you expect to be able to handle the increase in payments once the interest-only period is up.

If you meet those criteria, here are a few advantages to consider:

1. Lower Upfront Monthly Payments

Because you only pay the interest that is accruing on the mortgage, initial monthly payments are substantially lower than if you were also paying the principal.

For example, on a $1 million, 30-year, 4% fixed mortgage, the initial monthly payment would be $4,774 – with about $1,440 of that going to principal. On an interest-only mortgage with the same criteria, the monthly payment would be $3,333.

2. Tax-Deductible Payments

Generally speaking, you can deduct 100 percent of your interest-only mortgage payments,as long as the total deduction is on debt less than $1 million.

On the other hand, mortgage payments that include payments on both principal and interest are only deductible for the amount of interest paid. In the example above, for each month’s payment of $4,774, only the interest portion ($3,333) would be deductible.

3. Rent vs. Own

As rents continue to skyrocket in metropolitan areas, many people would rather put that monthly check toward a home of their own. For example, the median monthly rent for a one-bedroom apartment in San Francisco is about $3,500.

With interest-only mortgage rates currently hovering around 4 percent, payments on a $1 million mortgage would be less than the cost of renting. Factor in the tax deduction benefit, and buying a home becomes even more attractive.

4. Seek Higher Returns

There are situations where paying down the balance of a mortgage may not be the most efficient use of capital, specifically when funds can be allocated to higher-yielding investments.

Much like the savvy borrowers in the early days of interest-only loans, you can take advantage of the flexibility afforded by lower mortgage payments to seek investments with higher returns. This advantage makes an interest-only mortgage a compelling choice for long-term wealth building.

The Takeaway

Forecasts for 2016 and beyond include rising interest rates, increasing housing prices and the continuing escalation of the cost to rent.

These factors make 2016 look like an opportune time to buy a home. If the structure of a traditional mortgage has prevented you from buying a home, an interest-only mortgage may provide a solution that helps make that happen in the near future.

Download the SoFi Guide to First Time Home Buying to get valuable tips on these topics and more. Our guide also demystifies modern mortgage myths around down payments, the pre-approval process, student loans, rising interest rates, and more.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Mortgages not available in all states. Products and terms may vary from those advertised on this site. See sofi.com/eligibility-criteria for details.

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