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You’ve decided to buy a home. Luckily, you’ve found a real estate agent who can help you find homes to look at and assist with negotiations and inspections. But what if that agent also works for the seller? That is called dual agency, and there’s a lot to consider before agreeing to the arrangement.

Here’s what future homebuyers need to know about dual agency to help decide if it’s the right choice for them.

What Is Dual Agency?

A dual agent represents both the buyer and seller in the same real estate deal. Dual agents are also sometimes referred to as transaction brokers.

Dual agency can be controversial and is banned or severely limited in eight states: Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, Vermont, and Wyoming.

Other states do not explicitly make it illegal, but some do warn against using a dual agent.

For example, the New York Department of State issued a memo advising consumers to be extremely cautious when signing on with a dual agent because in doing so they forfeited their right to an agent’s loyalty.

However, in every state where dual agency is legal, the law requires agents to disclose their work with both the buyer and the seller. Both buyer and seller must agree to use a dual agent and sign a consent form indicating they understand what they are agreeing to.

Dual agency may also refer to deal-making of seller’s agents and buyer’s agents at the same real estate company.

For example, Keller Williams, one of the largest real estate firms in the nation, has both seller’s and buyer’s agents. If one of its seller’s agents puts a home on the market, there’s a decent chance that one of its buyer’s agents may have a client for the property.

This is less controversial and poses fewer issues as it is still two separate people overseeing the seller’s and the buyer’s interests.

Recommended: How to Buy a House Without a Realtor

What Are Agents’ Fiduciary Responsibilities?

Real estate agents are legally bound to represent the best interests of their clients. This means agents must disclose any information they have that may or may not help their clients in the negotiating phase.

The obligation to disclose could pertain to information on home inspection reports, defects with the house, or anything else that affects the property’s value.

While representing a buyer, an agent must also disclose any existing relationship with the seller.

Be sure to ask real estate agents important questions about how they work and what they’ll do for you so you’ll know whether they’re the right agent for your needs.

A seller’s agent must disclose any relationship with potential buyers and all offers made on the property—unless, in general, the seller has instructed his agent in writing to withhold certain kinds of offers.

Real estate agents are also expected to put their clients’ financial best interests above their own. This could mean putting in an offer below asking price, which would reduce their own commission.

With all of that in mind, it becomes clear that issues of loyalty and confidentiality become challenging in a dual agency situation.

💡Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.

Pros of Dual Agency

Smoother communication: Having one agent representing both the buyer and seller could help create a smoother communication path. Because the person represents both parties, they may be able to speed up any negotiations. In this case, the dual agent may also understand both the seller’s and the buyer’s timelines, their schedules, and any internal deadlines better than two separate parties could. Buyers wouldn’t have to wait for the seller’s agent to call back and sellers wouldn’t have to wait for a buyer’s agent to call back, because with dual agency they are the same person.

Potentially more information on the home: A dual agent may be able to obtain more information on the home than an agent just representing the potential buyer. In turn, they can relay any pertinent information, such as structural issues, inspection reports, and any updates made to the home, to the potential buyer.

Potentially more access to a larger pool of homes: Remember, dual agency also means a buyer’s agent and seller’s agent working for the same agency. That means, if one home doesn’t work out, the two agents could look internally to find more potential homes their agency represents for the would-be buyers. They may even be able to find a few homes that haven’t hit the market yet.

Possibility for a discount on commission: In a typical real estate transaction, the seller’s agent and buyer’s agent split the commission. A dual agent may be willing to negotiate down their commission since they are double-ending the deal.

Dual agents still have to do their job: In the end, even dual agents must present all offers, prepare all paperwork, present all disclosure agreements, and help to complete the deal.

Recommended: 10 First-Time Homebuyer Mistakes to Avoid

Cons of Dual Agency

Buyers (and sellers) won’t get special treatment: Agents only working for one side will likely be willing to go all out for their client to ensure that the client gets the best deal. An agent working for both sides may be more tempted to get the best deal for themselves to maximize the commission (hey, it’s just human nature to look out for No. 1). A buyer (and a seller) usually wants loyalty above all else when looking for a home. Homebuyers may want to seek out someone who knows what’s needed to buy a house and has their back.

Buyers (and sellers) may not get the price they want: Again, a dual agent’s allegiances are split down the middle during the deal-making process. A seller’s agent is meant to promote the home and get the seller the best price for the home with the fewest contingencies.

A buyer’s agent is on a mission to find every tiny thing that needs to be fixed with the home to get the buyer the best deal they can. If a person is representing both sides, how can they do both? It’s important to discern an agent’s allegiances before signing on the dotted line.

No pushback from the other agent: In a two-sided real estate deal, the two agents will typically go back and forth on the home’s price, any reductions the buyer may want in exchange for repairs, the home’s inspection report, and much more. This creates a system of checks and balances for both sides, which can be important when negotiating a fair deal. However, if one person is playing both sides, things may get muddled, hurting both the seller and the buyer.

The Takeaway

Dual agency is rare in the real estate world because most buyers and sellers want to find an agent who is loyal to them and has their best interests at heart. Still, if you find yourself in a dual agent situation, there is much to know.

There’s another important decision most homebuyers must make: getting the right home loan. Different lenders may offer different terms, rates, or perks that may fit a buyer best.

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

Is having a dual agent a good idea?

Dual agency isn’t necessarily a good idea and is banned or strictly limited in eight states. A dual agent’s allegiance may be split between the buyer and seller, and most buyers will prefer a dedicated agent. Real estate agents are fiduciaries and obligated to put their client’s interests before their own, but that may be difficult when they have clients on both sides of a transaction.

What is a common challenge with dual agency?

A common challenge with dual agency is that the agent’s allegiance is split since they represent both the buyer and the seller. While this can facilitate some communications, it may raise problems in terms of whose interests the dual agent is representing.

Do dual agents get double commission?

Typically, in a real estate deal, the agent representing the buyer and the agent representing the seller divide the commission between them. If there is a dual agent — someone who represents both parties s

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.

SOHL-Q225-163

Paying rent every month can feel akin to throwing money away. You don’t grow equity in a home, nor do you have a place to call your own or customize as you see fit (farmhouse kitchen sink, anyone?).

Perhaps you’re wondering if the time is right to buy a home or at least start saving for one. Maybe you’ve caught DIY fever and have ideas about what your dream home would look like and have been watching videos of how to redo a backsplash and plant some annuals. Or maybe you are planning on enlarging your family and think it’s time to become a homeowner, since a yard and playroom sure would be nice.

But there are other considerations, especially financial ones, to contemplate as well. The housing market has been hot, and pulling together a down payment plus affording a home loan may stretch your budget. Maybe renting is your best bet after all.

“Am I financially ready to buy?” is certainly one question you will likely want to answer. But it’s not the only issue. Here, learn the four signs that you may be ready to join the ranks of first-time homebuyers.

Renting a Home vs Owning a Home: Pros and Cons

One important way to know if you are ready to be a first-time homebuyer is to consider the pros and cons of owning vs. renting.

First, take a closer look at the benefits of owning:

•  You know what your housing payments will be in terms of your mortgage amount, especially if you opt for a fixed-rate mortgage.

•  Month by month, you will build equity in your home.

•  As your equity grows, you may be able to borrow against it for other financial goals.

•  Owning a home can be a step toward building your net worth.

•  You may qualify for tax deductions.

•  On-time payments can help build your credit history.

•  You can customize your home to reflect your particular needs and tastes.

Now, here are the cons of owning a home:

•  You often need to come up with a down payment, which can be hard to save for. There are also closing costs to be paid.

•  You need to qualify for a mortgage.

•  You also need to budget for property taxes and related expenses such as insurance.

•  It will be your responsibility to pay for home repairs and upgrades, which may make having a healthy emergency fund more important. If, say, the furnace conks out, there’s no landlord to call for help.

•  Your mortgage, as well as taxes and other expenses, could add up to more than rent.

•  You are making a long-term commitment to owning a home. While, of course, you can always sell a property, it’s in your best interest to stay put and recoup closing costs and other expenses vs. picking up and moving frequently.

Next, think over the pros of renting:

•  It could be cheaper than owning. Your rent could be less than the mortgage, and you won’t have property taxes to pay.

•  Repairs and maintenance will likely be your landlord’s responsibility.

•  You’ll have the flexibility to move more easily when you want to.

•  You don’t need to come up with a down payment or qualify for a mortgage loan.

Last of all, take a look at the cons of renting:

•  You won’t be building equity in a property as you make your monthly rental payment.

•  Your net worth will not grow with rising property values.

•  You won’t have the security of ownership and its relatively predictable costs. Your landlord could raise your rent or decide not to rent the property any longer.

•  Your payments typically don’t build your credit history.

•  While you can likely decorate as you please, you won’t be able to upgrade or renovate as you might with a home you own. For instance, even if your landlord did allow you to get a new smart fridge, you probably couldn’t take it with you when you move.

💡 Quick Tip: Buying a home shouldn’t be aggravating. Online mortgage loan forms can make applying quick and simple.

Renting a Home vs Owning a Home Differences

Deciding whether to buy or rent is a major decision that can involve your financial and personal needs and aspirations. Here are some specifics:

•  Renting a home offers you more flexibility in terms of when and where you move; you will likely feel less anchored in a property.

•  Renting may well be less expensive: You don’t need to come up with a down payment, and rent may cost less than a mortgage or a mortgage plus property taxes.

•  However, when you have a mortgage, you are likely building equity and wealth, which you may choose to borrow against in the future (say, with a cash-out refinance). You may not have that feeling of “throwing money away” every month on rent.

•  When you buy a home, you are on the hook for that monthly payment, but, if you have a fixed-rate loan, it is more predictable than rent, which may fluctuate with the housing market.

•  As a homeowner, you would be liable for paying taxes and insurance, as well as bankrolling any renovations and upgrades to your home.

•  When you own your own place, you can personalize it to suit you, whether that means putting in a spa bathroom, knocking down walls, or building a patio.

Buying a Home vs Renting an Apartment

When it comes to deciding whether to buy a property or rent a home (say, an apartment), there is no right or wrong answer.

•  Renting is often more affordable, allowing you to save money and perhaps meet other money goals like paying down debt.

•  Renting is more flexible in most cases. If you rent an apartment, you are able to move at the end of your lease (or possibly before) without a lot of hassle.

•  When you rent an apartment, your landlord is probably covering property taxes and will be responsible for repairs, such as HVAC upgrades or fixing a clogged sink.

That said, when you buy a home, you may find the following:

•  A bigger financial commitment may be required (down payment, closing costs, property taxes, home maintenance), but you are building equity and possibly growing your wealth.

•  You can make your place yours and renovate it to suit your taste.

•  Buying a home vs. renting an apartment can give you a sense of security: You won’t have a landlord who can raise your rent, and you can put down roots in a community.

4 Signs You May Be Ready to Buy

If you think owning a home vs. renting is right for you, here are four signals that you may be ready to move ahead.

1. Your Budget Is Big Enough to Cover the Expenses

Home ownership isn’t all gain, no pain. Expenses may include:

•  Down payment and closing costs

•  Mortgage payments, including property taxes, homeowners insurance, and, if applicable, private mortgage insurance

•  Repair and maintenance costs, including HOA dues, if applicable.

How can you budget for these upfront and ongoing expenses? One way is to take a look at the average amount each of these costs in the housing market where you plan to buy a home to get a sense of how home-related expenses may affect your finances in the larger picture.

Doing some number crunching with a home affordability calculator may be enlightening.

You may get excited about buying a fixer-upper when watching home improvement shows. A common mortgage for such homes is an FHA 203(k), backed by the federal government, which includes money for the purchase price and some repairs and renovations.

Buyers will need to get bids for all the repairs they hope to fund with the loan. For less extensive repairs/improvements, there’s a Limited 203(k).

If the desired renovation is on the smaller side and you acquire a traditional mortgage, cash or a personal loan are options.

You can get an idea of how much your chosen home repair or improvement costs will be with this home improvement cost calculator.

💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.

2. You Plan on Staying Put for a While

Buying a home signals more of a commitment to location than renting. If you’re likely to relocate in the coming couple of years, renting may be the right move.

Here’s why: If you buy a home and sell it soon after, there’s a chance you’ll barely break even. That’s because real-estate commissions and other factors will come into play. And the financial and emotional stress of selling again soon after buying can be significant. On the other hand, if you can see yourself staying put in your new home for a while, it might be a sign to start shopping.

3. You Have Good Credit

Your good or better credit profile may have been advantageous when applying for a place to rent.

The credit you’ve spent years building will likely pay off in a bigger way once you make the move to own, with improved lending terms such as a lower mortgage rate offer.

What credit score is needed to buy a house? The average American’s credit score remains in the range considered “good.” But applicants with “fair” and even “poor” credit scores can and do secure mortgages.

Here’s how credit scores are usually classified:

•  Excellent: 800–850

•  Very good: 740–799

•  Good: 670–739

•  Fair: 580–669

•  Poor: 300–579

If you’ve spent years building your credit and your number reflects that, then you might be financially ready to buy a home.

Credit score requirements for loan program eligibility and pricing can vary from lender to lender, so you may want to shop around.

4. Rents in Your Area Are High

In many markets, the rising price of rent could make buying more enticing than ever. It may be a smarter move to invest your money toward homeownership vs rent.

Two big factors to consider are:

•  How long you plan to stay in your home

•  The price-to-rent ratio, which compares the median home price and median annual rent in a given area.

Several websites (such as Zillow, Trulia, and Realtor.com®) have tools that allow you to assess the dollars and cents of renting vs. buying. Estimating your break-even point of renting vs. owning a home could be another useful way to answer the question of whether it’s a good time to buy a home.

It’s best to take the calculations with a grain of salt, though. These are general estimates, and no one can predict the future of housing prices, rents, and taxes.

The Takeaway

When considering whether to buy vs. rent, there’s not one right decision. It’s a matter of which scenario suits your life and your financial situation at a given time.

Signs that you may be ready to buy a home can include having an adequate budget for the costs involved and a good credit profile, a desire to put down roots, and an understanding of the price-to-rent ratio in your target area.

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 are the advantages of owning vs. renting a home?

There are several pros to owning vs. renting a home. You can build equity in your home and potentially grow your net worth. What’s more, you can personalize your home however you like. You’ll also have stability in terms of both knowing your housing costs every month (as opposed to a surprise rent hike) and putting down roots in a community.

What are 3 disadvantages to owning a home?

There are several cons to owning vs. renting a home. You may face higher costs (down payment, closing costs, mortgage, plus property taxes). In addition, you will be responsible for home maintenance, which can be pricey and require your time and energy. You’ll likely have less flexibility in terms of moving, too.

What is the main reason to avoid renting to own?

Renting to own can be problematic if you change your mind. You can wind up losing your down payment and other charges.

*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.

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

SOHL-Q225-169

You may not think about a door’s looks and functionality until something goes awry, like a crack or dent appearing or paint flaking off. Then, you realize what an important element of your living space doors can be, providing interior details as well as privacy and soundproofing. If you need to replace a door, either because it’s dated or damaged, you’ll likely have to spend at least a couple hundred dollars for a basic model. Some options, like a custom wood French door with frosted glass, could cost thousands.

Read on to learn more about the process and price of updating your interior doors.

What Are the Different Types of Interior Doors?

Interior doors come in many styles and price points. Here’s a look at some of the most popular options, plus current estimated costs (including materials, labor, and equipment) pulled from Angi and HomeGuide.

•   Traditional Standard doors, such as a bedroom door, swing in or out to open and close. This type of door can be either hollow core, solid composite, or solid wood.

   Cost to replace: $50 to $600.

•   Pocket These space-saving doors slide into the wall when they’re open. Pocket doors hang from the top and slide along a track mounted in a space inside the wall and across the top of the door opening.

•   French The door with a certain je ne sais quoi, French doors can be either single or paired, and can have either a full (single) glass pane or a number of divided panes. French doors are often used as exterior doors to porches or patios, but they can also be a great way to let light diffuse inside a home.

   Cost to replace: $200 to $4,000

•   Sliding A cousin to the pocket door, sliding doors save space by sliding in tracks at the top and bottom of the door frame. Unlike a pocket door, however, they don’t disappear into the wall. Glass sliding doors are typically used as exterior doors to a patio or deck, but can be used indoors to separate rooms while maintaining visibility between them.

   Cost to replace: $400 to $4,500

•   Bifold Also called folding doors or concertina doors, bifolds are made of panels that fold next to each other when opened, sliding on tracks both on top of and below the door. Single bifold doors are sometimes used as doors to your home’s closets, and a pair of bifold doors might divide a large room.

   Cost to replace: $35 to $70

•   Barn A sliding barn door in the home takes rustic farmhouse trends to the next level. These doors slide on a track mounted on the wall above the door. Barn doors have a low profile, as they do not swing out.

   Cost to replace: $150 to $4,000

•   Saloon Head straight to the wild west with these doors. Sometimes called cafe doors, saloon doors hang on a pivot hinge, meaning they can easily swing in and out with a nudge. Because they swing in both directions, they’re commonly used as kitchen doors or in cafes where traffic goes both in and out.

   Cost to replace: $100 to $500

•   Murphy You may have encountered a Murphy door before without even knowing it. Often custom made, Murphy doors are typically bookcases that swing out, turning a door into storage space.

   Cost to replace: $700 to $2,500

Recommended: How Do Home Improvement Loans Work?

Signs You May Need New Interior Doors

Interior doors in a home can take quite a beating. They’re slammed and scuffed. Paint can flake and chip; doorknobs and hinges can give out. Depending on their quality and age, there’s a chance your doors may simply have seen better days.

If these signs sound familiar, it may be time to buy some new doors for your home:

1.    The door is stuck and has trouble staying open or closed. The more someone struggles to open and close a door that doesn’t budge, the more damage they’ll do. If a door’s always sticking or never manages to stay closed, it may be time to replace it.

2.    The door is warped or cracked. Age will affect the quality of any door, and if the frame or hinges are visibly cracked or peeling, it’s time to think about replacing them.

3.    The door’s style is dated. If your kitchen’s classic saloon-style doors feel decidedly old school — not in a good way — it might be time to consider replacing them. Even if they still work, dated styles can negatively impact a home’s value at the time of sale.

Depending on the style of door and the complexity of the installation, swapping out an interior door can cost anywhere between $150 to $2,600. A good portion of the cost is professional labor.

While hanging a door might sound simple, doing it wrong can lead to improper closure or a door that just won’t close at all, which leaves you back at the drawing board. It could be worth asking for estimates from a few professional contractors if you decide to replace several interior doors at once.

A door can make an impression — good or bad — when someone enters a room. That first impression might become very important when considering home value. This kind of home improvement project could pay off when you eventually sell your home.

Recommended: Tips for Maintaining the Value of Your Home

DIY Ways to Update Your Interior Doors

Replacing interior doors altogether can be expensive and is not always necessary. If your door is in good shape, an inexpensive DIY can update your interior doors to look more modern or trendy.

Here are some interior door upgrades you might consider before ditching a door altogether.

•   Swapping out door knobs and hardware Sometimes dated brass or an ornate finish might make a standard swing door feel out of place. For between $75 and $150, you can update a door’s knobs and hinges.

•   Trying a new hue A fresh coat of paint might transform a door’s entire vibe. Instead of a standard white, you might opt for a neutral shade, make a statement with a black door, or choose a rich, deep tone that complements other colors in your home. You can even switch things up by painting the frame and the door different colors. Although you have to remove the door from its frame, this project is DIYable and can typically be done within a day or two.

•   Updating hollow core doors Hollow core doors are the standard type of door installed in many homes when they’re built. It’s a swing door with a flat surface. These are basic doors that can be a blank slate for your personal taste. For example, you might use molding and beadboard panels to create a paneled look on standard doors. This can make a builder-grade, hollow-core door look custom-made. This DIY project is a small investment for a big payoff.

If you don’t have enough cash on hand to cover the cost of upgrading your doors (or any other part of your home), you might consider using a home improvement loan for financing. This is an unsecured loan that can be used for virtually any purpose, including a home renovation or upgrade.

Once approved, you get a lump sum of cash up front you then pay back (plus interest) in monthly installments over time. For this kind of personal loan, rates are typically fixed and lower than credit cards.

Recommended: What Are the Most Common Home Repair Costs?

The Takeaway

Doors inside your home don’t just provide privacy, they’re a decorative feature of the property that can enhance its style. If your interior doors are in poor shape, replacing and updating them could help increase the value of your home, making the upgrade well worth the upfront outlay of money. Prices for this home upgrade can start at just a couple of hundred dollars and go into the thousands, depending on the details. If you need help financing this home improvement, a personal loan could be a good move.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Is updating interior doors worth it?

Each homeowner’s situation is unique, but it can be worthwhile to update interior doors. It can enhance soundproofing, improve the look of your home, and add to your property value.

What interior door styles are timeless?

When it comes to timelessness, simplicity is often best. Shaker-style doors can work well, and many people like the appeal of classic French doors.

How much does it cost to update interior doors?

There’s a wide range of costs to update an interior door. The door itself could cost from a couple of hundred dollars to a couple of thousand dollars (most basic models will be between $200 and $600), and installation can add $200 to $1,800.

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.

SOPL-Q225-056

Your home’s heating, ventilation, and air conditioning (HVAC) system plays an important role in regulating temperature and air quality and keeping your house comfortable. Maintaining or upgrading the ductwork involved can be a small or major expense, depending on the job’s specifics, with costs ranging from $200 to $12,000, typically, and an average price of $1,252.

This guide will give you the basics of how HVAC ductwork operates and key cost considerations.

What Is Ductwork?

In the broadest sense, ductwork can be defined as the channels used for transferring heated and/or cooled air through the rooms and zones of a home or building.

In many cases, HVAC systems need separate supply and return ducts to circulate, filter, and treat air continuously. Supply ducts bring air from the furnace, geothermal pump, or other type of system to blowers and vents to heat or cool an area. On the flipside, return ducts transport untreated air back to the HVAC system.

Some of the most common HVAC systems that need ductwork include:

•   Geothermal or ground source heating and cooling

•   Central air conditioning

•   Furnaces

•   Central gas heating

Between these different systems and a home’s unique characteristics, ductwork can be handled in a variety of ways.

Recommended: How to Winterize a House

Installing New Ductwork

Figuring out how to install ductwork varies in complexity and cost between new construction and finished and furnished homes.

Additional steps that may be necessary for a finished home, such as cutting holes in existing walls, ceilings, and floors, may likely drive up the price of labor and require more materials and time for installation. Depending on where the system is placed, ducts may be run through closets, attics, basements, or up stairwells.

Since different homes require different amounts of ductwork, it’s helpful to think of cost on a linear foot basis. New ductwork can cost about $40 to $65 per linear foot, with the variation coming down to costs for materials and labor.

On average, retrofitting an existing home without ducts can run $2,400 to $6,600.

If you’re building a new home, including plans for HVAC ductwork from the getgo could reduce the overall installation cost. For starters, it would bypass the need to retroactively cut holes throughout a home for ducts and vents.

Additionally, it may be easier to design systems that utilize fewer linear feet since ductwork can be installed before walls and floors are completed.

Replacing Ductwork

If your home is already fitted with ductwork, replacing a portion of it or the entire system might be necessary due to leaks, cracks, or reduced efficiency over time. Since ducts are usually kept out of sight behind walls and ceilings or in attics and basements, accessibility is a key factor in repairing a system.

The replacement process involves both removing the existing materials and installing new ductwork. Replacing ductwork can cost from $25 to $55 per linear foot depending on the location of the existing system and choice of materials for the new ductwork.

Replacing ductwork in a home between 2,000 and 2,500 square feet can run $2,800 to $5,600.

Exposed ductwork can be easier for you to reach and replace on your own, but a professional contractor may be necessary for more complicated repairs and getting to concealed HVAC systems.

Additionally, a skilled professional could likely complete the job in less time than a DIYer might, and time may be a more pressing factor than money in the middle of a cold snap or during a heatwave.

The U.S. Environmental Protection Agency’s EnergyStar program recommends getting quotes from contractors with North American Technical Excellence (NATE) or Building Performance Institute (BPI) certification to get the job done right on the first try.

Recommended: The Cost of Buying a Fixer-Upper

Ductwork Materials

There are several types of materials to consider when planning how to install ductwork in a home. Broadly speaking, ductwork can be categorized as flexible or rigid, with options for materials within each category. Each comes with tradeoffs in terms of price, lifespan, efficiency, and flexibility.

Flexible Ductwork

True to its name, flexible ductwork is characterized by its ability to bend, which can come in handy when installing inside tight and tricky spaces.

In most cases, aluminum or non-metallic materials like plastic, polyester, and PVC are used for flexible ductwork. Here’s how they compare.

Flexible Aluminum: Costs between $4 to $7 per linear foot (excluding labor).

Pros:

•   Ideal for installing in hard-to-reach places

•   Longer lifespan than non-metallic flexible ductwork

•   Generally cheaper than rigid ductwork

Cons:

•   Poor energy efficiency without added insulation and sealing

•   Needs to be reinforced to minimize kinks and bends to improve airflow and efficiency

Flexible Polyester: Costs between $1 to $4 per linear (excluding labor)

Pros:

•   Useful for compact spaces

•   Generally one of the cheapest options

•   Resistant to mold and rust

Cons:

•   Prone to tearing and less durable than flexible aluminum

•   Needs to be reinforced to minimize kinks and bends to preserve airflow and efficiency

Rigid Ductwork

Rigid ductwork can be made from several materials, such as fiberglass and galvanized steel or aluminum. These options can also vary in shape (e.g., cylindrical or rectangular) and size. Additionally, there are differences in cost and features for each type of rigid ductwork.

Sheet Metal Ductwork: Made from galvanized steel or aluminum, these materials usually cost anywhere from $7 to $13 per linear foot.

Pros:

•   Greater durability than other materials

•   Can produce less noise than flexible ductwork

•   Less susceptible to mold and mildew

Cons:

•   Difficult to install if there isn’t space for long, straight lines of ductwork

•   Adding insulation may be required for greater energy efficiency

•   More expensive than flexible ductwork

Fiberglass Duct Board: Consisting of metal ductwork lined with fiberglass, this option costs between $4 and $6 on average.

Pros:

•   Built-in insulation improves energy efficiency and temperature control

•   Easy to cut and seal

•   Well suited for installing between a building’s rafters or floor joists

Cons:

•   Over time, they can release fiberglass particles into the air and be susceptible to mold and mildew

•   Can be difficult to clean

•   Often the most expensive option per linear foot

Recommended: Guide to Unsecured Personal Loans

Sealing and Insulation

Depending on the structure of a home, the type of HVAC system, and other factors, sealing and insulating ductwork may be necessary for health and safety concerns. It might also improve the efficiency of a system, thus potentially lowering your energy use, and may help pay for itself through lower utility bills.

If combustion is involved in your HVAC system, which is generally the case for furnaces and central gas heating, harmful gases like carbon monoxide are generated in the process. Sealing ductwork can further safeguard that such gases are not circulated into the living space of home instead of being emitted outside.

While professional contractors are recommended for sophisticated ductwork insulation and sealing jobs, homeowners may choose to take a DIY approach to sealing near vents and other ductwork connection points with metal tape. These locations, especially vents, can be more accessible and are more common locations for leaks.

How Often Should Ductwork Be Replaced?

While we may immediately notice when the power goes out or the plumbing is backed up, it’s harder to tell if we’re getting the most out of a heating and cooling system.

Maintenance and cleaning can help extend the lifespan of ductwork and heating and cooling systems, but a time will come when replacement is a safer and more financially sound choice.

Erring on the side of caution, you may want to have a heat pump or air conditioner (including ductwork) replaced if it’s more than 10 years old. For a furnace, the estimated lifespan is around 15 years.

To keep your ductwork in tiptop shape, there are some maintenance tasks, like changing air filters monthly, that can be done on a DIY basis. More complex procedures, such as cleaning blowers, checking electrical connections, and lubricating mechanical parts, may be better handled by a professional contractor.

Having a maintenance checklist handy can be helpful for staying on top of your cleaning and maintenance schedule, as well as making sure a contractor checks all the boxes when inspecting your HVAC system.

Recommended: Guide to Buying, Selling, and Updating Your Home

How to Finance Ductwork

Whether you’ve saved in advance or are responding to a sudden home repair cost, there are options available for paying for HVAC ductwork.

Installing energy-efficient heating and air conditioning systems may qualify for a residential energy property tax credit. Additionally, some states and utilities offer incentives and rebates.

Although helpful, these incentives and tax credits still leave a portion of the cost to the homeowner. It can sometimes be difficult to save for potentially pricey repairs like these if a budget is already stretched thin.

One financing option you might consider is an unsecured home improvement loan. This is a personal loan designed to be used for home upgrades and repairs, and typically comes with a fixed interest rate, set term, and regular monthly payments. Unlike a home equity loan or line of credit, personal loans don’t require you to have equity in your home or use your home as collateral.

The Takeaway

Ductwork plays an important role in your home’s HVAC system and keeping your home healthy and comfortable. But, like all parts of a property, it can get old and/or damaged and need repair or replacement. Typically, a ductwork repair will cost $1,252, but the price tag can be considerably higher. If you need help financing ductwork, you might consider a home improvement loan, which is a kind of personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How much should new ductwork cost?

How much new ductwork will cost will vary with the size of the project, where it’s located, and whether it’s a repair or a replacement. Average costs stand at $1,252, but the range of costs can run from a couple of hundred dollars to over $10,000.

Does homeowners’ insurance usually cover ductwork?

While insurance policies differ, most homeowners’ insurance does not cover ductwork repair or replacement.

Can I replace my own ductwork?

While you could DIY a ductwork repair, experts in HVAC caution that it’s a complex job requiring a solid understanding of how the system works and building code specifics. It may be wiser to call in a pro.

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.

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An underwater mortgage, also known as an upside-down mortgage, occurs when your mortgage has a higher principal balance than the current fair market value of your home. In other words, you owe more on your loan than your home is actually worth. This can happen if housing prices in your area have dropped since you purchased your home.

Having a mortgage underwater can make it challenging to refinance your mortgage, take out a second mortgage, or sell your home. Fortunately, there are a number of ways you can manage the problem and get out from under an upside-down mortgage. Here’s what you need to know.

What Does it Mean to Have an Underwater Mortgage?

An underwater mortgage is defined as a mortgage in which the principal balance is higher than the home’s fair market value, resulting in negative equity. An underwater (or upside-down) mortgage can happen when property values fall but you still need to repay a large portion of your original loan balance.

Having a mortgage underwater can make refinancing difficult, since lenders generally won’t give you a loan for more than what the home is worth (in fact, they typically will only give you up to 80% of a home’s current value). It can also stand in the way of selling your home, since the proceeds from the sale likely won’t be enough to pay off your mortgage.

What Causes an Underwater Mortgage?

One of the most common reasons for an underwater mortgage is a decline in property value after the borrower purchases a home.

Homeowners who are most at risk of ending up underwater are those who bought their home recently with a very low down payment. Some lenders and types of mortgage allow you to put as little as 3% or even 0% down. If, for example, a home costs $300,000 and you put down 3%, you start with just $9,000 in equity in your home. If your home’s market value drops by $9,200, you’d be underwater by $200.

As you pay off your mortgage, you gradually chip away at the principal balance and end up with more and more equity. You also build equity as your home (ideally) grows in value over time. This helps protect you from becoming underwater due to any downward fluctuation in housing prices.

Missing payments on your mortgage also puts you at risk of going underwater. When you miss payments, your principal balance doesn’t decrease as fast as it should. As a result, you’re more likely to owe more than your home is worth.

💡 Quick Tip: Buying a home shouldn’t be aggravating. SoFi’s online mortgage application is quick and simple, with dedicated Mortgage Loan Officers to guide you from start to finish.

How Do I Know If I Have an Underwater House?

To find out if your home is underwater, you can follow a few simple steps:

1.   Check your loan balance. You can typically find your balance on a recent mortgage statement or by logging into your online account. If you can’t find it, you can always call the company that holds your loan and ask how much you still owe on your principal.

2.   Determine how much your home is worth. You can get a good estimate of your home’s current value using online tools from websites like Zillow and Redfin. For a more accurate valuation, you would need to get a professional home appraisal, which may not be worth it unless you absolutely need to know if you are underwater.

3.   See how the numbers compare. By subtracting how much you still owe on your principal from your home’s current value, you’ll end up with either a positive number (you’re not underwater) or a negative number (you are underwater).

What Are My Options If My Mortgage Is Underwater?

While you can’t control falling home prices, there are other things you can do to get an underwater mortgage back on dry land. Here are some to consider.

Stay and Keep Paying Down Your Principal

It’s not uncommon to be underwater on a mortgage if you haven’t owned your home for a very long time. If you don’t have an immediate need to sell (such as job relocation), your best bet may be to sit tight and keep on making your mortgage payments. Over time, your equity will increase and home prices may rebound.

If your budget allows, you might also want to make additional payments toward the principal balance in order to get back on track faster.

Explore Refinancing

Generally, you can’t refinance a mortgage that is underwater. However, there are some exceptions. If you have a government-backed loan (such as an FHA, USDA, or VA loan) and you qualify for a streamline refinance, you can refinance without a home appraisal. This allows you to get a new loan even if your current mortgage is underwater. It may be possible to use a streamline refinance to lower your interest rate or shorten your repayment term, which can help you pay down your principal (and get out from being underwater) faster.

In the past, Freddie Mac and Fannie Mae offered special refinancing programs for underwater mortgages, but they’ve temporarily stopped taking applications due to low volume.

Work With Your Lender

If you’re having trouble keeping up with your monthly payments, or you need to relocate and sell your home, it can be worth reaching out to your lender to discuss your options. You may be able to do one of the following:

Modify Your Loan

Your lender might agree to loan modification, which involves changing one or more terms of the loan. For example, you may be able to lower your monthly payment by extending your repayment term or reducing your interest rate. A lender might even agree to lower your principal balance. Just keep in mind that any amount of negative equity forgiven by your mortgage lender can count as income, so you’ll want to factor that in come tax time.

Short Sale

In a short sale, the lender agrees to accept a sales price that is less than the amount owed on the mortgage, effectively taking a loss. Typically, a lender will only consider a short sale as a final option before foreclosure. A short sale is typically preferable to a foreclosure for both parties involved — it costs less for the lender and is less damaging to the borrower’s credit history.

Deed in Lieu of Foreclosure

A deed in lieu allows you to forfeit ownership of your home to the lender, typically as a way to avoid the foreclosure process. If you go with this option, you’ll want to make sure you get all the details of the agreement in writing, so you are not liable for any remaining amount owed on the mortgage down the line.

Note: SoFi does not offer Deed in Lieu at this time. However, SoFi does offer mortgage refinance options.

File for Bankruptcy

A last resort option that you would only want to pursue if you’ve tried everything else, is to file for bankruptcy. There are two different types:

•  Chapter 13 With this type of bankruptcy, the court will put you on a plan to repay some or all of your debt. You won’t lose your home and will have time to work on getting your mortgage current. The court will monitor your budget, and your repayment plan will typically last for three to five years.

•  Chapter 7 This means all (or most) of your assets will be sold by the court to repay your debt. As a result, you could lose your home, car, or other assets. Any remaining debt is forgiven.

Filing for any type of bankruptcy is expensive, distressing, and can have serious and long-lasting consequences on your credit. However, it may provide much-needed relief if you’re deeply underwater on your mortgage.

Foreclose on Your Home

Foreclosure is another last resort option. In foreclosure, the lender will take control of your home, and, if you’re still living there, you’ll be evicted. The lender will typically then sell the house as quickly as possible to try to recoup as much money as they can. You’ll have your debt wiped away clean but your credit will be badly damaged and you’ll likely have to wait seven years before getting another mortgage. In addition, the canceled mortgage amount may count as taxable income.

The Takeaway

If you owe more on your home than it’s currently worth, you’re underwater (or upside down) on your mortgage. This can happen if property values drop and you don’t have a lot of equity built in your home. While it’s not an ideal situation to be in, there are options, including waiting it out, exploring possible refinancing options, and working with your lender to modify your loan.

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 to do if your mortgage is underwater?

If your mortgage is underwater, meaning your loan balance is more than the house is worth, there are still things you can do. You could opt to wait things out and keep making mortgage payments till you’re no longer underwater. Or you can consider refinancing your mortgage, working with your lender to modify your loan, or selling short.

Can a bank foreclose on an underwater mortgage?

Your lender can’t foreclose on you just because your property is underwater, as long as you’re making your payments on time. But you may be slightly more at risk of foreclosure, simply because you may have fewer options for refinancing or selling your home if you do start having trouble paying your mortgage.

Can you refinance a mortgage if you’re underwater?

Refinancing is likely to be more difficult if you have an underwater mortgage, but it may still be possible. If you have a government-backed loan – like an FHA loan, VA loan, or USDA loan – you may be able to refinance.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

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 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.

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