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Thinking about installing a new deck, replacing a front door, or even adding an extra bedroom to your home to help increase its resale value? Considering that your home is one of the biggest investments you’re likely to ever make, it makes sense that you’d be interested in increasing its value with some upgrades.

But as you probably guessed, not all remodeling projects provide the same return on investment (ROI).

Using Remodeling Magazine’s Cost vs. Value 2024 report, which compares the average cost of 23 remodeling projects in 150 housing markets, let’s look at some of the most popular home improvements based on estimated ROI, time commitment, and cost.

Things to Consider Before Starting a Home Improvement Project

It’s important to note that national averages only tell part of the story. Labor and supply costs, styles, and consumer preferences can vary by location. So before you dive into a project, you might want to consider hiring a contractor, real estate agent, or appraiser to come to your house and give an opinion on which upgrades might provide the most value based on where you live.

You may also want to factor in any immediate needs that a remodeling project can help satisfy. Let’s say, for instance, you’d like to add an extra bathroom. While you may only recoup part of your expenses, having an additional washroom may be worth the cost of a renovation.

Top Home Improvement Projects to Help Increase Your Home Value

Looking to prioritize your wish list? These remodeling projects earned top spots on the Cost vs. Value report.

Garage Door Replacement

Average Cost: $4,513

Resale Value: $8,751

Costs Recouped: 193.9%

General Time Commitment: A few days

Removing an old garage door and replacing it with an attractive, sturdy new one could return every dollar of your initial investment — and then some, according to the Cost vs. Value report. It’s an effective way to improve your home’s appearance from the outside while increasing your home’s functionality for years to come.

With an average cost of $4,513, which includes the door and the cost of labor, it’s also a relatively affordable renovation. While most homeowners would likely hire someone to help install the new garage door, it is something that you could potentially do on your own (with the help of a friend) over the course of a weekend.

If you hire someone to install the door for you, they will likely come to your home twice: first, to take measurements and give you a quote, and then again to install the door.

Entry Door Replacement (steel)

Average Cost: $2,355

Resale Value: $4,430

Cost Recouped: 188.1%

General Time Commitment: One week

A new, safe front door is an attractive quality to prospective homebuyers. Replacing your entry door and jambs with a steel door, “including clear dual-pane half-glass panel, jambs, and aluminum threshold with composite stop,” should get you a good bang for your buck, according to the Cost vs. Value report.

Even better, you and a friend can probably handle installation on your own, though you can certainly hire an installation expert. If you decide to go the pro route, they’ll likely need to come to your home to take initial measurements and then return for the installation. Another option is to measure and order the door yourself and just get help with the installation.

Recommended: 32 Inexpensive Ways to Refresh Your Home

Manufactured Stone Veneer

Average Cost: $11,287

Resale Value: $17,291

Cost Recouped: 153.2%

General Time Commitment: One month

Removing the vinyl siding and adding a stone veneer to the bottom third of your home’s street-facing façade is an effective way to help increase the value of your home, returning 102.3% of the cost of renovation. First impressions matter when it comes to selling a home, and stone veneer is a popular look right now.

Whether you tackle this project yourself or hire a handyperson to help with the installation, this project will take several days to complete. If you choose to hire someone, understand that the construction days might not be successive, so the exterior of your home could be under construction for several weeks to a month or longer.

Minor Kitchen Remodel (Midrange)

Average Cost: $27,492

Resale Value: $26,406

Cost Recouped: 96.1%

General Time Commitment: Four to eight months

When it comes to kitchen remodels, less may be more, at least when it comes to ROI. According to the Cost vs. Value report, major kitchen remodels recoup anywhere from 38% to 49.5% of costs. Meanwhile, a smaller upgrade recoups 96.1% of costs.

What does a minor remodel include? Think faster-turnaround jobs like installing a new sink and faucet or replacing items like cabinet fronts, cooktop, oven range, refrigerator with new models, countertops, or floors.

When creating your budget, you’ll probably want to factor in the cost of expert help, such as an electrician, plumber, and contractor. You’ll also want to be realistic about how long you can devote to the project — and be without a working kitchen. Expect several months at minimum for a remodel.

Wood Deck Addition

Average Cost: $17,615

Resale Value: $14,596

Cost Recouped: 82.9%

General Time Commitment: Three to six months

Nothing beats enjoying family and friends on a deck in your backyard on a sunny day. Potential buyers are typically rightfully happy to pay extra for a deck, and a wooden deck installation could recoup half of what you spend. And ideally, you’ll get the chance to enjoy the deck before you sell your home.

A deck installation is a pretty large project. It will likely need to pass an inspection and adhere to your city’s building codes, and it could increase your property taxes and home insurance costs. So it pays to get the job done right the first time, which may mean enlisting the help of a designer or architect. These pros can map out an initial plan, and a contractor can handle the building.

An online home renovation cost calculator can help provide you with a rough idea of how much a wooden deck — and any other home upgrade project — could cost.

HVAC Conversion/Electrification

Average Cost: $18,800

Resale Value: $12,422

Costs Recouped: 66.1%

General Time Commitment: Anywhere from 1-2 days up to several days, depending on whether your home requires structural changes

Replacing a fossil fuel-burning HVAC system with one that runs on electricity isn’t cheap. Nor is it one to try to DIY. But according to the Cost vs. Value report, you could stand to get back roughly two-thirds of what you put in. Homeowners who decide to make the conversion may also notice a savings in their heating and cooling bills. And there are environmental benefits to consider as well.

Unless you’re a licensed HVAC technician, this is a project best suited for the professionals. Consider speaking with a few different HVAC installation teams to compare potential systems and cost options.

Remodeling Projects With the Lowest Potential ROI

While these upgrades may not deliver the biggest returns, they could still be worth exploring if they fit your budget and lifestyle needs.

Primary Bedroom or Bathroom Addition

Average Cost: $164,649 for midrange; $339,513 for upscale

Resale Value: $58,484 for midrange; $81,042 for upscale

Cost Recouped: 35.5% for midrange; 23.9% for upscale

General Time Commitment: Four to eight months

Adding on a primary bedroom or bathroom may enhance your living experience, but it might not add much to your bottom line. Despite the project’s hefty financial and time commitment, it generally fails to deliver even one-third of the investment.

However, while not a great return, a home addition project of this size could change to the value of your home. For example, a $300,000 home that adds a primary suite for $164,649 could potentially return about $58,000 on the investment. A home that sells for $358,000 instead of $300,000 is a 19.3% increase in the home’s value. If you were to get enough use from the addition to justify the other cost you can’t recoup, it could still be a fine investment.

Again, these figures are purely hypothetical, and the value of expanding your home can depend on a multitude of factors. And if you decide to move ahead with a primary bedroom or bathroom addition, you’ll want to think through how you’ll finance the project. Some options include applying for a home improvement loan, using home equity, dipping into your savings, or using credit cards.

Recommended: Homebuyer’s Guide

Bathroom Addition

Average Cost: $58,586 for midrange; $107,477 for upscale

Resale Value: $20,334 for midrange; $34,997 for upscale

Cost Recouped: 34.7% for midrange; 32.6% for upscale

General Time Commitment: Four to eight months

A bathroom remodel tends to be cheaper than a primary bathroom addition, and it generally sees a slightly better potential ROI. But again, a bathroom addition or any large remodeling project should be considered in terms of both ROI and what you want to get out of your home while you are living in it. And that’s a calculation that only you and your family can make.

The Takeaway

Home renovation shows make upgrades look quick and easy. And while sometimes they can be, in many cases, renovations can be costly and time-consuming. As you consider which ones to make, you will likely want to factor in your return on investment (ROI).

Not all remodeling projects provide the same level of ROI. Projects such as replacing a garage door or adding a stone veneer to your home’s façade tend to see better ROI than adding an extra primary bedroom or bathroom. But ROI is only one consideration. You should also need to consider what you want to get out of your home and whether the time and cost of taking on a big project are worth it.

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

What home improvements offer the most value?

According to the Remodeling Magazine’s Cost vs. Value 2024 report, the top three home improvement projects that have the best ROI are: replacing the garage door (193.9% of costs recouped), replacing the entry door with a steel version (188.1% of costs recouped), and adding manufactured stone veneer to the home’s exterior (153.2% of costs recouped).

Which home improvement is least likely to increase the value of your home?

Wallpapering, built-in electronics, wall-to-wall carpeting, and a swimming pool are examples of projects that typically don’t increase the resale value of your home.

Does new flooring increase home value?

New flooring can potentially boost the value of your home, especially if your current flooring is worn or in poor condition. Hardwood flooring often provides significant ROI, though luxury vinyl plank and tile flooring can also add value.

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-Q225-016

Curb appeal should always be front of mind when you plan to sell your home and want to attract buyers or boost your resale value. But it can also help make your home a more appealing place to live.

If you’re thinking about upgrading your home’s exterior, consider these smart home remodel projects.

Ideas for Exterior Home Remodel Projects

No matter how beautifully you decorate the inside of your home, the outside offers up the first impression to visitors. These exterior home remodel ideas can be great investments for you as a homeowner, whether or not you’re planning to sell your house right now.

From adding texture to the exterior of your home to swapping out old windows for more contemporary ones to fixing up your front door, a home exterior makeover can be a smart way to make a lasting impact in a short amount of time.

Replace Your Front Door With an Inviting Style

Psychologists say that it takes just seven seconds to make a first impression. This means your front door is one of the first parts of your house that a guest or potential buyer will see and will help set the tone for how they feel about the home in general. Thus, the front door should be one of the first places you focus your energy when tackling exterior renovations of your property.

For an open, light-filled look, consider doors with glass panels. Want more privacy? Use mirrored glass in the side panels, which allows you to see outside but people walking by can’t see in. Frosted glass also offers privacy while diffusing natural light.

The overall cost of installing an exterior door depends on complexity, materials, and where you live; it could run you as little as $150 or as much as $13,800, according to the home services website Angi. But on average, installing an exterior door will cost between $546 to $2,375. Labor alone accounts for roughly one-third of the total cost of the project. So if you’re handy with tools, this could be where you save money.

Even if you choose not to replace the door itself, a fresh coat of paint, updated knob and hinge hardware, and a new doorbell to match can go far in improving the curb appeal of your home’s exterior.

Mix Textures on Your Home’s Exterior

Mixing textures is one way to breathe new life into the exterior of your home. Alternating visual patterns between wood, metal, concrete, and stucco requires some experimentation, but the results can be dramatic.

For a contemporary look, consider mixing multiple textures, which could range from different widths of siding or choosing different types of siding like combining cedar shingles and shiplap in the same color. You can also mix and match levels of gloss, or shapes and lengths of bricks and stone.

For a baseline cost, installed vinyl siding can range in price from $6,370 and $17,615, with the average cost being $11,676. Your costs will depend on the thickness of the siding, how much added style you want as you mix and match textures, the size of your house, how standard the shape of your house is or isn’t, and any added details like moldings, trim, soffits, corners, or vents. If there’s old siding that needs to be removed first, you’ll also want to factor in the additional cost of labor (or consider doing it yourself).

Recommended: How to Track Home Improvement Costs — and Why You Should

Upgrade the Windows

Changing the style of your windows will not only give your home’s exterior a brand-new look, but potentially be more energy-efficient than your current windows. This could end up helping you save money on electric bills, which may be attractive to buyers down the line.

Material selection will dictate the overall cost of new windows. Vinyl, for example, is on the lower end of the price scale, whereas solid wood windows will cost much more.

The cost of new windows also is dependent on the size of each unit, as there are hundreds of common window sizes available. On average, a single window unit runs $150 to $800 with installation costing an additional $60 to $300 per unit. The complexity of the windows also affects pricing, and if you plan to add shutters or new blinds, factor in those costs, too.

Recommended: How Much Does It Cost to Remodel or Renovate a House?

How Much Could Your Home Exterior Makeover Boost Value?

At a minimum, your home exterior makeover can make your house more appealing to the eye, but it also can help give potential buyers assurance that you have maintained the home’s upkeep.

Projects like fixing up the front door are a great place to start, and while you’re replacing your door, you could consider adding a portico or awning as a design element or to protect visitors from the weather. Also, make sure your doorbell is attractive, dovetails with the house’s overall style, and — most importantly — works.

Similar comparative data shows that an upscale window replacement using vinyl can increase a home’s value by an average of 67.1% of its cost. And vinyl siding replacement, on average, boosts home value by 80.2% of the cost.

Funding Your Exterior Home Remodel

Once you have created a plan for exterior improvements, priced out materials, and mapped out a budget, the next item on your agenda should be figuring out the best way to pay for your improvements. If you’ve got the money in savings, then that isn’t an issue. Or, if you plan to use your credit cards but can pay them off in full when the bills arrive, again, you’re squared away.

But using your credit cards when you can’t pay them off relatively quickly can be problematic, as credit card debt can be tricky to pay off. That’s because most credit card companies charge compound interest, which means you’re paying interest on the accrued interest, with the interest continually calculated and added to your balance. What’s more, the interest may typically be compounded daily.

Even if you make minimum payments, the interest just keeps compounding. In fact, it keeps doing so until the balance is paid off completely. If you miss a payment, the situation gets worse, with late fees and penalties often added on.

If you’d like to calculate what you’d actually pay on your remodeling debt, use our credit card interest calculator.

If you decide that it won’t make sense to use a credit card to pay for your remodeling, then consider comparing and contrasting home equity lines of credit versus home improvement loans, which is a kind of lump-sum personal loan. Under certain circumstances, a home equity line of credit (HELOC) may make sense; for example, if you have significant equity in your home, plan to borrow a large amount of money and/or want the potential tax benefits.

Benefits of choosing a home improvement loan include:

•   You won’t tie up any equity in your home.

•   Fees are likely to be less, and maybe you won’t have to pay any fees at all

•   Application and approval processes are typically faster than with a HELOC

Recommended: How Much Does It Cost to Remodel or Renovate a House?

What Bedroom Style Is Right For You Quiz

The Takeaway

Exterior home remodel projects can be a way to increase your house’s curb appeal while also adding value. They also are often the quickest way to turn a real estate investment into long-term value. Exterior home projects can be as simple as adding a fresh coat of paint to your existing front door or as complex as replacing all the windows in your house to be both contemporary and more energy efficient. At the very least, tackling these smart exterior home remodel ideas should help you down the line when you decide to sell your house.

Of course, the more involved a project is, the more expensive it can be. If you need help financing an exterior home remodeling project, you have options, including using cash, using a credit card and paying off the balance quickly, or taking out a 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

Which exterior renovation adds the most value to a house?

In general, one upgrade that provides the best ROI is replacing your roof. It’s a pricey project — homeowners can expect to pay an average of $9,513. But according to the home services website Angi, you could see an ROI of 20% to 50%. Other renovations that often add the most value to a house include adding a new garage door, adding new vinyl siding, or replacing older windows with new ones made of vinyl.

Which home improvements are least likely to increase the value of your home?

Planning to make some changes before you sell your home? According to Zillow, certain projects might not be worth the investment. Examples include adding a walk-in closet, adding a deck, turning a garage into a bedroom, and installing an in-ground swimming pool.

Which room is the most expensive to renovate?

In many cases, the kitchen is the most expensive room in the house to renovate. The average kitchen remodel costs between $14,567 and $41,962 or higher, according to HomeAdvisor. Plumbing, electrical, and choice of appliances and materials are all factors that can impact your overall cost.

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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-Q225-025

A home inspection can give homebuyers important information about the condition of a home they’re purchasing, and it may help alert them to any major repairs and expenses down the road.

When the housing market is competitive, some buyers skip all contingencies, including the home inspection, which can be risky. But others are still opting to have an inspection done before making an offer.

In a seller’s market, many properties are sold “as is,” which means sellers won’t negotiate for repairs even after an inspection.

Even so, a home inspection, and a home inspection checklist, could help you avoid buying a home at the top of your budget that will soon need big fixes.

What’s on a House Inspection Checklist?

Here are the common items evaluated in a general professional inspection, according to the American Society of Home Inspectors.

The average cost of a home inspector ranges from $296 to $424, though they can go higher or lower depending on location and house size. What’s more, the inspector might suggest a separate inspection by a specialist if they spot a potential problem but think an expert should evaluate it further.

It’s a good idea to make sure you can accommodate these types of costs in your home-buying budget.

Heating and Air System

Depending on your geographical location and the weather there, a finely tuned heating, ventilation, and air conditioning (HVAC) system might be a top priority on your home inspections list.

Does the house you’re considering have an HVAC system? An older property might not, in which case you may want to research and price the purchase and installation of a system.

If the property does have HVAC, does the system work and how old is it? If it doesn’t work, or work well, you’ll want to find out what it will cost to repair or replace it.

If the system is practically vintage, the Department of Energy says it might be worthwhile to replace it, as newer models are more efficient and likely to lower your energy costs.

Recommended: What Are the Most Common Home Repair Costs?

Plumbing System

It’s easy to forget about pipes when you’re walking through a home. You can’t see them, but they greatly affect daily life and are not always simple to repair.

Ask your home inspector to check all plumbing work for possible leakage. A leaky pipe can lead to water damage and additional repair work. Once you know if there’s a problem and how significant it is, you can determine the cost of fixing a leaky pipe.

An inspector could also check drainage throughout the home, the condition of the garbage disposal and water heater, and overall water pressure. If the home is older and has a septic tank, that could be inspected, too.

Electrical System

A professional home inspection will likely include an evaluation of a property’s entire electrical system, ensuring that it is up to safety standards outlined by the National Electrical Code.

The functioning of the electrical box, outlets, switches, and lighting will be checked, as well as the state of the wiring throughout the home. If major work needs to be done, you can get a quote for the cost of rewiring.

If the house has solar panels, you might want to make sure they’re in working order and ask for the maintenance history.

Roof

No matter the type of roof, the home inspector will check its condition and age.

A roof in good shape helps ensure against leaks and provides some level of insulation. It’s also important to know if you’re buying a home with a roof at the end of its lifespan, so you can set aside money to replace it when needed.

Replacing a roof can run from about $5,867 to $13,209, HomeAdvisor notes.

Floors, Walls, Ceilings

Put the bones of the house on your house inspection checklist.

Structural components like these will likely be looked at in your home inspection. You’ll want to be sure the floors are level. And consider the floors cosmetically. Is the carpeting new? Are there wooden floors that need refinishing?

Look for cracks in the drywall or plaster that make up the walls and ceiling as well. Sometimes cracks are a natural change as walls expand and contract with weather changes. But it’s good to know if all you’ll need is spackle and paint or if repairs will require a lot more time and money. A home improvement calculator could help you figure out the potential cost.

Foundation, Attic, Basement

A home inspector will crawl through a foundation space, checking for stability and that it is up to national safety codes. This is just one of the reasons why failing to get a home inspection is a homebuyer’s mistake to avoid.

A basement will be checked for dampness and good ventilation for moisture control.

And if the home has an attic, your inspector will check to see that the beams and rafters (which support the roof) look secure and distress-free.

Insulation

Homes generally lose heat through the windows, walls, roof, and attic. Proper sealing and insulation can be a good way to prevent this, lowering energy costs.

If your prospective home is quite old, it’s possible it has no insulation, and you might want to consider the cost of adding it. If the home has been insulated, the home inspector will check its condition and look for gaps.

Exterior

Exterior walls will be evaluated, with an eye toward any damaged bricks, shingles, or siding or bubbling paint. Other important exterior components are chimneys, gutters and downspouts, doors, and windows. You might also want to check for moisture.

If water collects and stands anywhere on the property—because of poorly hung gutters or a leaking sprinkler, for example—you may want to nip it in the bud to avoid mold growth and/or water damage. Check for pests like termites or cockroaches as well.

Appliances

If a refrigerator, stove, and washer and dryer are part of the deal, have your inspector make sure they are in good working order.

If the home comes with few to no appliances, determine how much adding them will cost.

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

Choosing a Home Inspector

If you’re using a real estate agent, chances are your agent can recommend a few home inspectors they’ve worked with previously.

Then again, a home inspector your agent referred may feel obligated to go easy on the inspection.

Whether you’re using a buyer’s agent or not, some consumer advocates say it’s a good idea to find your own inspector. You can ask for references if you know someone else who’s bought a home in the area recently. Or you can search a referrals site like Ang or HomeAdvisor for a recommendation. The National Association of Home Inspectors also offers a tool to help you find a home inspector near you.

Other things to put on your house-hunting checklist: Know your credit score and get prequalified and preapproved for a home loan.

The Takeaway

A home inspection checklist can unearth problems that can be a dealbreaker, possibly a negotiating tool, or something a buyer is willing to accept and deal with. The curb appeal may be great, the staging superb, but house inspection lists offer a probing look at what lies beneath.

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’s the biggest red flag in a home inspection?

There are a number of red flags that a home inspection may turn up. Among the top concerns are roof and foundation issues, signs of mold and/or mildew, indications of water damage, and termite or other infestations. All of these can be difficult and expensive to remedy.

How many buyers back out after inspection?

It’s hard to know exactly why buyers decide not to go through with a home purchase, but the number who back out after the home inspection is about 10% to 15%, though it can fluctuate.

How often do homes fail an inspection?

Of homebuyers who get their new homes inspected before buying, 24% report that the properties failed the inspection.The majority (32%) say the inspector found minor issues, while 30% say the house passed the first inspection.

*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.

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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.

SOHL-Q225-062

FHA loans, which are backed by the Federal Housing Administration, are popular with first-time homebuyers for their more flexible qualifications and lower down payment requirements. Though FHA loans are more accessible, there’s still potential for mortgage denial during the underwriting process.

Here’s a look at how often FHA loans are denied in underwriting, plus some of the leading reasons for mortgage denial — plus strategies to improve your chances of loan approval.

Understanding FHA Loan Underwriting

When you apply for an FHA loan to finance the purchase of a home, the lender will evaluate your ability to repay the loan to decide whether to approve or deny the application. This is known as the mortgage underwriting process, which involves reviewing a borrower’s financial information, such as credit history, income, debts, and the mortgage amount.

Getting preapproved for a home loan is an initial step in the FHA loan process that can give prospective homebuyers an indication of how much they can potentially borrow with the loan. After receiving preapproval, buyers get a letter from the lender that they can include when making an offer on a home.

If an offer is accepted, buyers can apply for an FHA loan, prompting another review of a borrower’s credit, employment, income, debts, and assets by the underwriter to reach a final decision: conditionally approved, suspended, or denied. This process may take a few days or more than a week to complete.

Common FHA Loan Denial Statistics

How common is it to have a mortgage loan denied in underwriting? In short, it depends on the type of mortgage loan. Below are some key statistics to keep in mind as you prepare to apply for an FHA loan.

Denial Rates Compared to Conventional Loans

When comparing FHA vs. conventional mortgages, the latter have a lower rate of denial. In 2023, the most recent year for which full data is available, 7.9% of conventional home loan applications were denied, which is the lowest among all types of home loans.

Meanwhile, applications for FHA loans, which accounted for 17% of mortgages in 2023, had a 13.6% denial rate for applications to purchase a home in the same year. The denial rate for FHA refinance loans was 41.7% for 2023.

Trends in FHA Loan Approvals

In 2023, 86.7% of applicants were approved for FHA loans. To better understand how you compare to typical borrowers, here are some key trends on FHA loan approvals. The median credit score was 673 for borrowers taking out FHA loans in 2023. And the median loan amount was $294,000 for FHA mortgages approved in 2023.

Keep in mind that getting approved for an FHA loan depends on multiple factors, including economic conditions and individual lender practices — not just a borrower’s qualifications.

Recommended: A Guide to FHA Loans

Top Reasons FHA Loans Get Denied in Underwriting

Here are a few of the main reasons for having an FHA mortgage loan denied in underwriting.

Credit Score Issues

Lenders look at a borrower’s credit history to help determine their ability to repay debt. Having a high credit utilization, a history of late payments, or recent bankruptcies could lead to an FHA loan getting denied.

The credit score needed to buy a house varies by loan type, with FHA loans being more lenient. Borrowers with credit scores of at least 500 could qualify for an FHA loan. However, a credit score below 580 requires a 10% down payment versus a 3.5% down payment for borrowers who can hit the 580 number.

If you meet the credit score requirements for an FHA loan, it’s important to ensure you stay on top of monthly payments and avoid opening new lines of credit to maintain your credit score.

Debt-to-Income Ratio Problems

When applying for an FHA loan, lenders also consider your existing debt. Having a debt-to-income (DTI) ratio over 50% could be a problem for getting approved. Note that lenders typically prefer a DTI ratio of 43% or less when applying for home mortgage loans. To assess your DTI, add up all your monthly debts and divide by your gross monthly income; multiply the result by 100.

Lenders evaluate your DTI ratio when you apply for mortgage preapproval. But a change in your DTI could arise between then and the underwriting process if there are issues with any cosigned debt or you take on new debt.

Recommended: Why Your Debt-to-Income Ratio Matters

Property Appraisal Challenges

Unless you’re a cash buyer, an appraisal is a necessary step to determine the home’s value. So it’s important to understand how FHA appraisals work. Underwriters could deny an FHA loan application if the appraised value falls short of the purchase price. This can be remedied if the seller agrees to lower the price or the buyer can make up the difference in cash.

FHA appraisals also assess whether a home meets the minimum health and safety standards set by the U.S. Department of Housing and Urban Development (HUD). If any health and safety hazards are identified, such as a broken HVAC system or leaky roof, these could result in an FHA loan being denied unless it’s resolved before closing.

How to Improve Your Chances of FHA Loan Approval

Borrowers can plan ahead to improve their chances of getting approved for an FHA loan.

Having enough money saved for a down payment and closing costs prior to applying is key, as lenders typically ask for two or more months of bank statements. As noted above, the minimum down payment on FHA loans depends on your credit score. Borrowers with credit scores of 580 or above can put just 3.5% down, while those with credit scores between 500 and 579 need to put 10% down.

Paying off debt to improve your credit and DTI ratio is another strategy to consider, especially if your credit score is hovering near 580.

When it comes time to submit the mortgage application, taking the time to review all your information for accuracy can help reduce the likelihood of getting denied due to an error.

What to Do If Your FHA Loan Is Denied

Having your FHA loan denied in underwriting can be unwelcome news, but it’s not the end of the road for buying a home. First, you can talk to your lender to determine if there were any application errors and what other options are available. Adding a cosigner to your mortgage could help secure approval, though this would mean finding someone who agrees to be financially responsible if you are unable to make loan payments.

There are also other types of mortgage loans to consider. Homebuyers who meet income limits and are buying in areas designated as eligible by the United States Department of Agriculture could qualify for a USDA loan, a type of mortgage with no down payment requirement. Alternatively, VA loans, which are available to eligible veterans, active-duty military, reservists, and surviving spouses, have no minimum credit score or down payment requirements. (Note: SoFi does not offer USDA loans at this time, but we do offer FHA and VA loans.)

Working with the Right Lender for FHA Loans

As a first-time homebuyer, you likely have questions. For instance, “which mortgage products do you recommend?” and “should I be worried about underwriting?.” Working with the right lender for FHA loans can help answer questions and address concerns to streamline the homebuying process.

Many banks and mortgage companies offer FHA loans, and HUD maintains a database of FHA-approved lenders. Comparing offers from multiple lenders is recommended to find more favorable loan terms.

The Takeaway

How often are FHA loans denied in underwriting? In 2023, just under 14% of FHA loans were denied, which is a higher rate than conventional home loans. Some of the main reasons for FHA loan denial stem from a borrower’s credit history, their debt-to-income ratio, and the appraisal. An FHA loan can be a good solution for many borrowers, however.

SoFi offers a wide range of FHA loan options that are easier to qualify for and may have a lower interest rate than a conventional mortgage. You can down as little as 3.5%. Plus, the Biden-Harris Administration has reduced monthly mortgage insurance premiums for new homebuyers to help offset higher interest rates.

FAQ

What is the current denial rate for FHA loans in underwriting?

The denial rate for FHA loans in underwriting was 13.6% in 2023. This is nearly double the denial rate for conventional mortgages for the same year.

What minimum credit score is needed to avoid FHA loan denial?

Having a credit score of 500 meets the minimum requirements and can help avoid FHA loan denial. Note that borrowers with a credit score of 580 or more can make a 3.5% down payment instead of 10%.

Can I reapply for an FHA loan after being denied?

Yes, you can reapply, but it’s important to understand the reasons for mortgage denial and address those issues before submitting a second FHA loan application.

How long should I wait to apply again after an FHA loan denial?

How long you should wait depends on your reason for FHA loan denial, as there isn’t a mandatory waiting period for reapplying. For example, it may take several months for your credit score to improve before you can then reapply.

Are certain property types more likely to cause FHA loan denials?

Certain property types, such as manufactured homes and condos, have stricter requirements, making them more likely to cause FHA loan denials.

Photo credit: iStock/Milan Markovic

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-Q225-041

The cost of turning your house into a “smart home” could range from about $100 to $4,500 or more, depending on what type of upgrades you might be considering.

According to 2025 data from the home improvement site Angi.com, the typical cost of a smart home ranges from $204 to $1,653. But several factors could affect how much you end up paying, including the size of your home and whether you DIY the install or hire a professional to take charge.

As you’re thinking about how to upgrade your home to a smart home, read on for a look at what it might cost, whether the return on investment could be worth the price, and how you might choose to pay for those cool new devices.

Understanding Smart Home Technology in 2025

Way back in 1962, the animated TV show The Jetsons and other sci-fi classics gave viewers an aspirational look at what life might be like 100 years in the future — when a home filled with computerized gadgets would make life so much easier for moms, dads, the kids, and even the family dog.

Who knew, even as you watched those old shows as reruns decades later, that so much of what they predicted would come true? OK, maybe we don’t have flying cars yet. But in 2025, smart home technology, or home automation, is a reality … and getting smarter all the time.

You can see who’s at your door from 1,000 miles away. Or program your robot vacuum to clean your floors when and where you want. You can use your smartphone, tablet, laptop, or a smart home assistant like Google or Alexa to turn lights on and off, turn the thermostat up or down, open and close the blinds, and more. Many of today’s devices can be operated separately or linked together to act as a cohesive network. And besides the obvious convenience, smart tech can also help reduce some costs and your carbon footprint.

Recommended: 4 Ways to Upgrade Your Home

Smart Home Cost Breakdown by Category

The cost of turning your house into a smart home will depend on which devices you choose to install or upgrade, and how connected you want those various devices to be. If you install one or two gadgets yourself — like a new smart thermostat or a doorbell camera — you can probably keep the cost to a minimum. But if you have a professional come in and connect your whole home, the price could be much higher.
Here’s a breakdown of what a few of the more popular smart devices could run you:

Smart Home Cost: Security Systems

Because they can allow you to better monitor your property when you’re away, home safety systems are among the most popular automated setups offered. And there’s a wide range of options available. You can choose between a wired or wireless (Bluetooth or Wi-Fi) system, for example, or between a professionally installed and monitored system and one that you set up and monitor yourself using your phone. Depending on your choice, and how elaborate the setup of sensors and cameras is, you could spend anywhere from $300 to $5,000 or more on installation, with an additional charge for external monitoring for some systems.

Smart Home Cost: Automated Lighting and Electrical

We’ve come a long way since clapping to turn a lamp on and off was considered high-tech. Today’s smart lighting can be controlled remotely or set up to go on and off automatically, so you can keep your home safer and use your electricity more efficiently. You also may be able to adjust the brightness and color of your lights. Fully outfitting your home with smart lighting could cost from $1,000 to $5,000. Or you can start out a little smaller and buy smart bulbs (about $15 each or less) that wirelessly connect to your home’s hub (think Alexa or Google Nest) or your smartphone.

Smart Home Cost: HVAC and Climate Control

A smart thermostat offers another way to control your home environment from afar and potentially lower your power bills. You can program it to turn on or turn up the air conditioner or heater before you get home so the temp is just the way you like it. Or you can make adjustments any time remotely using your smartphone. Some smart thermostats also can “learn” your temperature preferences and automatically create a heating and cooling schedule based on your habits. The price of a smart thermostat can range from about $70 to $280. A fully automated HVAC system, on the other hand, could cost from $800 to $2,000 or more.

Recommended: What Does an HVAC Replacement Cost?

Entry-Level vs. Premium Smart Home Setups

There are smart home options to fit just about any budget. But when you compare entry-level vs. premium smart home setups, you’ll likely find differences in performance, design, functionality, and support.
Professional installation, customization, and the brand you buy can all factor into the price you’ll ultimately pay to transition to a smart home. (Of course, you could also buy a new home that’s already outfitted with a state-of-the-art smart system.)

If your budget is a factor, you may want to start small, with a few essentials that you can install yourself. You might have to invest quite a bit more (thousands of dollars vs. hundreds) to get a top-tier whole-house system that seamlessly integrates all the electronics inside and outside your home.

Hidden Costs of Smart Home Implementation

When you’re budgeting for any smart home upgrade, it can be a good idea to prepare for extra costs, including:

Subscription Costs

Some smart devices come with monthly fees that can add to your overall cost. If you want 24/7 security system monitoring, for example, you could pay $30 to $60 or more each month for that service. (Some self-monitored video doorbells also require a subscription — especially if you want to customize your setup.) Your smart home system may also charge a monthly subscription ($10 to $50 or more, depending on the level of service) to cover ongoing maintenance, software and equipment updates, and general support.

Stronger Wi-Fi Requirements

If your smart home system requires a stronger signal than you currently have, you may have to get an upgrade and pay more each month to your wireless company.

Repairs and Replacements

If your smart appliance (refrigerator, dishwasher, microwave, etc.) breaks down, the cost of repairing or replacing it will likely be higher than what you’d pay for basic appliances. And you may not be able to take certain larger appliances or your security system with you if you move.

Packages vs. Individual Pieces

Depending on how big you think you might want to go with your smart home tech, you may want to compare the cost of buying a comprehensive system of integrated smart components vs. buying one device at a time. You might be able to save some money by purchasing a package that includes professional installation, service, and other features. (If you’re considering a renovation or remodel, it may make sense to include the costs of a smart home upgrade in your budget.)

Financing Your Smart Home Upgrade

While some smart home devices can be relatively low in cost, others may require a more significant investment. So besides researching the various costs, it can also make sense to consider how you might pay for any smart tech improvements.

If you have some equity built up in your home, you may want to look into the pros and cons of using a home equity loan vs. a home equity line of credit (HELOC) to help finance your project. Both allow those who qualify to borrow a large sum of money at a relatively low interest rate and with lower fees than a mortgage refinance. But each works a bit differently.

•   A home equity loan is disbursed in a lump sum that you’ll begin repaying immediately, with interest, usually at a fixed rate. This might be a good solution if outfitting your home with smart technology is part of a larger renovation project that you undertake with a contractor who can give you a bid for the total costs to remodel or renovate a home in advance, so you know, roughly, what your total spend will be.

•   A HELOC is a revolving line of credit that works more like a credit card. You can take out money as you need it, up to your approved limit, during the draw period, which typically lasts 10 years. Usually, you’ll be required to make interest-only payments on the amount you borrow during that time. When the draw period ends, you’ll enter the repayment period, which is usually 20 years; and at that time, you must begin repaying the principal balance with interest, usually at a variable rate. A HELOC could be a good solution if you aren’t sure exactly how large a project you’re taking on and what it might cost — if it’s a few rolling renovations vs. a big remodel, for example.

It might be tempting to go to the lender that provided your home mortgage loan for financing, but it’s always a good idea to look around and check rates with several lenders before making a commitment.

If you don’t have enough equity in your home, or if you prefer not to use your home as collateral, another possibility might be an unsecured home improvement loan. With this type of personal loan, the funding may be faster (there’s no appraisal required), and your home isn’t on the line if you fall behind on your payments. As for a fixed interest rate for easier budgeting.

Any of these borrowing options can be used to cover the costs of upgrading to a smart home, so it’s really about finding the right fit for your needs.

ROI of Smart Home Investments

Is a smart home worth the cost? Even if your focus is primarily on comfort and convenience when you invest in smart home technology, you’ll likely notice other benefits as well.

You can use devices that control your home’s temperature, appliances, and lights, for example, to help you reduce your monthly energy bills. And installing a security system may help you reduce your insurance costs.

Adding smart home components or a whole system can also help you increase or maintain the value of your home. Is a smart home worth it? According to Forbes.com, most sellers of smart homes realize a 50% return on their investment. And because buyers are increasingly looking for smart home features, the right upgrades also may help you sell your home faster.

The Takeaway

Technology that can make your home life simpler, safer, and more comfortable is no longer a fantasy. Upgrading your home to a smart home isn’t even really considered a luxury anymore.
How much is a smart home? These days, there are devices and packages designed to fit just about any budget, from individual components that may cost less than $100, to whole-home systems that can run into the thousands. If you’re spending big on smart tech or wrapping smart home technology into a larger renovation, a home equity line of credit could help you cover the bills.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

What’s the average cost of a basic smart home setup in 2025?

The typical cost of a smart home can range from about $200 to $2,000 or more. But several factors can affect how much you end up paying, including the size of the upgrade and whether you DIY the job or hire a professional to take charge.

Which smart home features offer the best return on investment?

Smart thermostats, lighting, and security systems are currently in high demand and generally offer the best return on investment.

Can I finance smart home upgrades through SoFi?

Absolutely. SoFi offers several financing options for homeowners who want to upgrade their tech, including a home equity loan, a home equity line of credit (HELOC), and an unsecured home improvement loan.

How much should I budget for ongoing smart home maintenance and subscriptions?

Depending on the type of system you plan to purchase, it may make sense to budget at least $50 a month for maintenance and subscriptions.

Are there tax incentives or rebates available for energy-efficient smart home implementations?

Tax laws that apply to energy-efficient upgrades are complicated and can change from year to year. Keep your receipts (documenting your costs is key), and talk to your tax preparer about potential tax breaks, but don’t count on them when you’re planning your project.

Photo credit: iStock/Srdjanns74

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.

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