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If you’re planning to take out student loans to help pay for college, you’re probably wondering: How long does it take to get student loans? and when should I submit my application?

Understanding the time involved can be critical, especially if your tuition will soon be due.

Getting a Student Loan: How Long Does it Take?

The timing for student loans can vary, depending on whether you’re taking out private or federal student loans. Also, the process itself takes time because you need to apply for the loan, get approved, and then wait for your loan funds to be disbursed. In total, it can take weeks or sometimes even longer.

Federal student loans are generally disbursed once per term. The process for private student loans may depend on the lender.

💡 Quick Tip: When shopping for a private student loan lender, look for benefits that help lower your monthly payment.

Does the Length of Time Vary Between Loan Types?

The wait time on receiving student loans depends on the type of loans and the loan source. The federal government is the most common source for student loans since it usually offers the lowest fixed interest rates and the most flexible repayment plans.

Additionally, there are also private lenders that offer private student loans. This student loans guide can be helpful for understanding how private student loans work and how they differ from federal loans.

You can also look into student loan and scholarship information to help cover the costs of college.

How Long Does It Take to Get a Federal Student Loan?

Applying for federal student loans is generally a straightforward process. You start by filling out a Free Application for Federal Student Aid (FAFSA®).

Even if you think you won’t qualify because of your household income or high school GPA, it doesn’t hurt to submit the FAFSA because it’s free. You may even discover that you’re eligible for federal aid like grants and work-study, and therefore you might not need as many loans as you thought. Along with your eligibility for federal aid, the FAFSA application will also let you know your federal student loan options.

But how long does it take to get a student loan? Depending on how the FAFSA is submitted, the wait time can range from about five days to over two weeks. Applications submitted online may be processed as soon as three to five days. Those submitted by mail may take up to 10 days.

Once the FAFSA is processed, students will receive a Student Aid Report (SAR), the expected family contribution and student eligibility for Pell Grants. Colleges listed on the FAFSA will receive a copy of the SAR and they’ll use this information to determine the exact type and amount of federal aid a student is eligible for.

Generally, the student’s college will disburse federal student loan funds at least once per term. Some colleges may be subject to a 30-day delay (past the first day of the payment period) when it comes time to disburse funds among first-time borrowers.

The FAFSA is available on October 1 for the next school year, and the deadline for submitting it is June 30th of the following year. However, colleges may have earlier deadlines for submission, so be sure to check.

💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

How Long Does It Take to Get a Private Student Loan?

Private loans, which can include graduate loans, come from private (aka non-government) lenders who don’t have the same set standards as federal loans. No private lender functions exactly the same as the next when it comes to interest rates and payment plans, which includes when you’re required to begin student loan repayment.

When applying for a private loan, it’s very important that you clearly read the contract and know when loan repayment is expected. Private loans may not have the six-month grace period that federal loans offer.

And they won’t necessarily offer fixed interest rates, which means your interest rates could increase over time if you opt for a variable-rate loan.

How long do student loans take to process? Because each lender will have different application requirements and payment processes, there is no specific timeline for receiving your funds. However, you can generally expect that your private lender will send your loan funds to your college or university anywhere from two to 10 weeks from the date your loan application is approved.

Private lenders may offer school-certified loans or direct-to-consumer loans. When borrowing a school-certified loan, the loan amount is disbursed directly to the school. Direct-to-consumer loans are disbursed directly to the borrower.

The Takeaway

When applying for a federal loan using the FAFSA, it may take anywhere from a few days to two weeks to find out what types of loans you’re eligible for. The loans will then be disbursed directly to your school, at least once per term. If you have questions, contact the financial aid office at the school.

The application process for private student loans varies from lender to lender. It can take anywhere from two to 10 weeks for the loan to be disbursed once the loan application has been processed.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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

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 Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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When the amount a student can borrow isn’t enough to cover the cost of attendance, parents may decide to take out additional loans. Parents of dependent undergraduate students can apply for a Direct PLUS Loan. PLUS Loans may also be offered to graduate and professional students, these are commonly referred to as grad PLUS Loans.

Parent borrowing has steadily increased in recent decades. There are about 3.7 million borrowers of the parent PLUS loan, according to the most recent federal data from the last quarter of 2022.

What Are Parent PLUS Loans?

A Parent PLUS Loan is a type of loan that is part of the Direct Loan program administered by the U.S. Department of Education. As mentioned, PLUS Loans can be borrowed by parents of undergraduate students. Graduate and professional students may also be eligible for PLUS Loans.

Parent PLUS Loans generally have higher interest rates than other Direct Loans. For Parent PLUS loans issued in the loan year starting July 1, 2023, the interest rate is 8.05%, while the interest rate for Direct Subsidized and Unsubsidized Loans to undergraduate students is 5.50%.

Interest rates for federal student loans are fixed, meaning they stay the same over the entire term of the loan. You generally can’t transfer a Parent PLUS Loan to your child down the line, but your child may be able to apply for student loan refinancing later on and, if they qualify and it makes sense to do so, use it to pay off the loan.

How Much Can You Borrow for a Parent PLUS Loan?

Congress established the Parent PLUS Loan program in 1980 with caps on how much parents could borrow. Those limits were eliminated in 1992. Parents are now able to borrow up to the full cost of attendance at their child’s institution (which the school determines), after any other financial aid the student receives.

Parent PLUS Loan Eligibility Requirements

Credit Score Requirements

While there is not a specific credit score requirement for borrowing a Parent PLUS Loan, borrowers with an adverse credit history may not qualify to borrow this type of loan. The U.S. Department of Education defines an adverse credit history as meeting any of the following criteria:

•   Having accounts with a total balance of more than $2,085 that are 90 or more days delinquent, or debts that have been placed in collections or have been charged off within two years of the date of the credit report

•   Having defaulted on a loan within five years of the credit report

•   Filed for bankruptcy within five years of the credit report

•   Experienced repossession or foreclosure within five years of the credit report

•   Having charged-off a federal student loan within five years of the credit report

•   Experienced wage garnishment or a tax lien within the five years prior to the credit report

Full details on PLUS Loan eligibility and adverse credit history can be found on the StudentAid website .

Parents with an adverse credit history who are denied a Parent PLUS Loan may be able to qualify for a Parent PLUS Loan if they add an endorser or provide supporting documentation to the U.S. Department of Education that indicates there are extenuating circumstances surrounding the adverse credit history.

Who Can Apply for a Parent PLUS Loan?

To apply for a Parent PLUS Loan, potential borrowers must be the biological, adoptive, or in certain situations the stepparent, of a dependent undergraduate student. The student must be enrolled in a participating school at least half-time.

Unless a grandparent has legally adopted the student, they are unable to borrow a Parent PLUS Loan.

Other Eligibility Criteria for Parent PLUS Loans

In addition to being the parent of the student and not having an adverse credit history, parent-borrowers also must meet the basic eligibility requirements for federal student aid , such as being a U.S. citizen or eligible non-citizen.

What If You Aren’t Eligible for a Parent PLUS Loan?

If you aren’t eligible for a Parent PLUS Loan, review the student loans, scholarships, and grants available to your undergraduate students. If these options are not enough to cover the cost of tuition and other expenses, you might consider borrowing a private parent student loan to help your child pay for their education.

Private student loans are awarded by private lenders based on personal financial factors such as income and credit score, among others.

Applying for a PLUS Loan

Before applying for a Parent PLUS Loan, ensure your child has completed their Free Application for Federal Student Aid (FAFSA®). Once this has been completed, you can apply for a Parent PLUS Loan. Typically, you’ll fill out an online application at StudentLoans.gov , though some schools have a different process and require you to request a loan through the institution’s financial aid office.

Recommended: When To Apply for a Parent Plus Loan

StudentLoans.gov has a list of all schools that allow you to apply through the website. If you have any questions, contact the financial aid office at your child’s school. When the loan is disbursed, you’ll have to pay a loan fee, which is 4.228% of the loan amount, if disbursed on or after October 1, 2020.

Pros and Cons of a Parent PLUS Loan

As with most financial decisions, there are pros and cons to Parent PLUS Loans.

Pros of a PLUS Loan

One of the biggest benefits of Parent PLUS Loans is that they allow parents to borrow up to the cost of attendance to help their child pay for college.

Another pro is that there are no minimum credit score requirements. While there is a credit check, so long as parents meet the adverse credit requirements, they stand a reasonably good chance of being approved for a parent PLUS Loan.

When repaying Parent PLUS Loans, borrowers have a few different repayment options available to them, which can offer flexibility. PLUS Loans are eligible for the standard, graduated, or extended repayment plans. And if Parent PLUS Loans are consolidated into a Direct Consolidation Loan, they can be enrolled in an income-contingent repayment plan, which is one of the income-driven repayment plans available for federal student loans.

Cons of a PLUS Loan

One negative is that Parent PLUS Loans cannot be transferred to the student borrower. They are the responsibility of the parents, and they are legally responsible for repaying the loan.

Parent PLUS Loans, as mentioned, have an origination fee.

Another con is that parents are expected to begin repayment as soon as the loan is disbursed. While it is possible to apply for a deferment, interest will continue to accrue during this time.

SoFi Private Student Loans

When evaluating private student loans vs. parent PLUS loans, generally, federal student loan options are a strong starting place for most borrowers. That’s because federal student loans come with many important protections and often with lower interest rates. Students and parents who have exhausted their federal aid options may want to consider taking out loans from a private lender.

Student loans with SoFi offer competitive interest rates to qualifying undergrads, graduate students, and parents. Student loans can be used to cover up to 100% of school-certified costs which typically include things like tuition, books, supplies, room and board, food, and other education expenses.

SoFi doesn’t charge any fees related to private loans, meaning no origination fees or application fees. There are no prepayment penalties, and typically the sooner you pay off your loan, the less you pay overall.

You can choose from several repayment options, and it’s quick and easy to apply online.

FAQ

Does everyone automatically get approved for Parent PLUS loans?

No, not everyone gets approved for a Parent PLUS Loan. In addition to being the parent of an undergraduate student and meeting basic eligibility requirements, the U.S. Department of Education requires that parent borrowers not have an adverse credit history in order to borrow a PLUS Loan.

Parents who are denied from borrowing a Parent PLUS Loan because of an adverse credit history may be able to add an endorser to their application or file paperwork with the Department of Education to prove there were or are extenuating circumstances related to their adverse credit history.

Are Parent PLUS loans based primarily on income?

There are no specific income requirements for borrowing a Parent PLUS Loan.

What is the maximum borrowable amount of Parent PLUS loans?

Parent borrowers can borrow up to the full cost of attendance as defined by your child’s school, less any other financial aid your child has received.

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 Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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

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Whether relocating down the block or across the country, there is a lot of work and planning that goes into moving. For current homeowners, there may be more logistics when simultaneously buying and selling houses.

If you’re figuring out how to sell and buy a house at the same time, there are some options to choose from based on your own budget, situation, and tolerance for risk.

Although this situation can be complex, it is not uncommon. In fact, 74% of home buyers owned their previous residence.

To help you navigate this juggling act, this guide will go over potential challenges and outline some alternative options and tips to close on both deals.

Evaluating the Local Housing Market

Taking stock of the local housing market can help inform how to sell and buy a house at the same time. Not only does the market influence home prices, it can also impact the length of closing on a sale or purchase.

You may be faced with a housing market that favors buyers over sellers or vice-versa. Researching your local housing market ahead of time can help guide your efforts in finding a new house.

When It’s a Buyer’s Market

A buyer’s market has more houses for sale than people actively looking to purchase a home. Generally, finding a new house in areas with a higher concentration of sellers can be easier than selling. At the same time, an accurate listing price and contingencies can factor into the equation.

Since there is less competition in the market, buyers can consider requesting an extended closing to allow time to sell their own house or include other contingencies in their offer. For instance, a home sale contingency can be included in a contract to coordinate a purchase with the sale of the buyer’s house.

A home sale contingency asks for the patience of a seller depending on their situation. Complications may arise in the event that all parties involved are simultaneously buying and selling homes.

On the flipside, sellers in a buyer’s market could benefit from setting a competitive asking price and getting ahead of inspection by buttoning up any lingering home maintenance issues.

💡 Quick Tip: SoFi’s new Lock and Look* feature allows you to lock in a low mortgage financing rate for up to 90 days while you search for the perfect place to call home.

When It’s a Seller’s Market

If there are more buyers in the housing market than there are homes for sale, it’s considered a seller’s market. Often, selling a house where there’s a high percentage of homebuyers takes less time and can fetch a higher price.

Sellers may be able to take advantage of the housing scarcity and go with a more ambitious asking price. If this pays off, the extra cash could be especially useful if you are shopping for houses in a seller’s market yourself. Making a competitive offer may be helpful if you are trying to beat out other bids and quickly secure a home.

It’s also not uncommon for houses to receive multiple offers in a seller’s market. If this is the case, sellers may have more success negotiating favorable terms that suit their sell and buy situation.

For example, a rent-back agreement allows sellers to lease their former house from the new owners for a set period of time. This gives them more time to find their new home, but may not be an acceptable condition for every prospective buyer.

Recommended: How Does Housing Inventory Affect Buyers & Sellers?

Calculating Home Equity

Getting your finances in order to buy and sell a home isn’t just about counting savings and building budgets. Home equity is another important consideration.

To calculate home equity, subtract the money owed on a mortgage loan from the current market value of a house. For example, if your home is worth $250,000 and you still owe $150,000 on your mortgage loan, you have $100,000 of equity in your home.

Depending on your financial situation, home equity may be necessary to buy a new home. Keep in mind that equity does not become available until the closing is complete. Typically, lenders will limit borrowers to 80% to 90% of their available equity, depending on factors such as credit history and income, among others.

Unless you’re selling a home shortly after buying it, the market value of a home could likely differ from the initial purchase price. These changes could either increase or decrease your home equity.

Generally speaking, the average home sale price in the United States increases year-to-year, barring notable exceptions like the 2008 financial crisis and subsequent recession. Yet, these trends don’t account for regional housing booms and busts.

Getting an official valuation from a real estate appraiser, which typically costs between $300 and $400, is one way to get a more accurate idea of your home equity and a feasible sale price. Researching comparable homes that recently sold in your community can give you a ballpark estimate, too.

💡 Quick Tip: You can use money you get with a cash-out refi for any purpose, including home renovations, consolidating other high-interest debts, funding a child’s education, or buying another property.

Prequalification vs Preapproval

Being aware of your own financial situation is useful for a variety of reasons, especially when buying a house. But if you’re among the majority of buyers who finance their home purchase, your mortgage lender will consider factors besides your own number crunching and goals when deciding their loan total.

For many prospective homebuyers, prequalifying is the first step to getting an estimate of how large a loan they would likely qualify for. Lenders generally evaluate factors like a buyer’s debt, assets, and income, which may take just a matter of days.

Becoming prequalified does not lock buyers into a set mortgage rate. Rather, it gives buyers a more accurate picture of their financing options and what houses are in their price range. Before making an offer, it is generally advisable that buyers are prequalified, which can be demonstrated with a letter from your lender. This can signal to the sellers that you are a serious buyer.

To ultimately obtain a mortgage loan, buyers still need to go through preapproval. In doing so, lenders perform a more thorough credit and financial background check to arrive at a specified preapproved loan amount.

Sellers may consider offers from preapproved buyers to be more favorable than those with just prequalification since there is less concern about a rejected mortgage application pending a deal. It may also get you to the closing table faster, which can be a big plus if you’re in a competitive market.

Selling Before Buying

Whether by intention or pure circumstance, you could face a choice of selling your house before buying your next home.

Selling first can potentially be beneficial for qualifying for a mortgage loan. After the sale closes, you may be able to use that money to finance a down payment on a new home, as well as having a lower debt-to-income ratio.

Yet, selling before buying may create complications for finding a place to stay until you purchase a new home. If the new buyers are not willing or able to do a rent-back agreement, you may end up having to find temporary housing in the meantime.

Apartments and rental properties may require signing up to a 12-month lease. For prospective homebuyers, a lengthy rental commitment with penalties for leaving early may be costly. Instead, finding a month-to-month rental option can grant more flexibility and sync up with a storage unit lease, if needed.

Buying Before Selling

When you find your dream home, you may want to pull the trigger and make an offer right away. But what does that mean if your house hasn’t sold yet?

If your budget allows you to buy a home with cash vs. a mortgage, you may be in a position to move forward with the offer.

For some, making a down payment or home purchase before selling with savings alone is not feasible. In other cases, your debt-to-income ratio and credit may prevent you from getting a second mortgage.

There are several options available if this is the case. A Home Equity Line of Credit (HELOC) can let prospective buyers borrow against the equity of their current home. A buyer’s credit and existing home equity are taken into account to qualify for a HELOC.

If approved, buyers can use the HELOC to access money for a down payment, which could then be paid off when their house sells. Take note of the repayment terms and interest rate on the HELOC, as these can vary from lender to lender.

Taking out a bridge loan is another possibility. These short-term loans are usually structured to cover a down payment and become due after several months. Bridge loans generally have high interest rates and may require an origination fee. Sellers who cannot unload their house in time may need to request an extension or begin repaying the loan while still paying their mortgage.

Choosing a Real Estate Agent

A savvy real estate agent can help reduce the stress and uncertainty of selling and buying a house at the same time. Their expertise can come in handy for setting an accurate listing price, scheduling showings, and staging a home.

If you had a positive experience with the agent you worked with to buy your home, their familiarity with your property could help expedite the process and give you peace of mind in case you have to move out of the area before selling.

There are benefits to using the same agent for buying and selling when geography allows. For instance, they can simplify the lines of communication and more easily coordinate the closing of both homes with your ideal timeline.

Sometimes it may not be possible to use the same realtor. The obvious case is when you’re moving a significant distance to a new area.

The need to use two realtors could arise if you’ve chosen a reputable realtor who exclusively works with buyers or sellers alone. If you decide to hire such a realtor, they may be able to recommend a trusted colleague in their agency to handle your other deal.

Timing Your Closing Dates

There is a lot to consider when selling and buying a house at the same time. The timing of both deals can impact financing options, having to find temporary housing, and figuring out how to store or move your belongings.

Setting a closing date is part of the negotiating process for any real estate deal, and coordinating closings for the same date can streamline the process.

Still, closings can be delayed due to reasons outside your control. Having a back-up plan, such as a rent-back agreement, can keep you in your home while you find a new house. Putting additional contingencies in a contract can help with rescheduling closings as needed or even walking away without much financial loss.

Obtaining a Mortgage

Buying and selling houses at once may not always be easy, but it is doable.

If you cannot purchase a house with cash or home equity, you’ll need to figure out how much you can borrow.

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.

*Terms and conditions apply. Applies to conventional purchase loans only. Rate will lock for 90 calendar days at the time of pre-approval subject to payment on 60th day of the fee below. If you submit a fully executed purchase contract within 30 days of the initial rate lock, SoFi will reduce the interest rate by an additional 0.125% at no cost. If current market pricing has improved by .75 percentage points or more from the original locked rate, you may qualify for an additional rate reduction. If you have not submitted a fully executed purchase contract within 60 days of your initial rate lock, you will be charged $250 to maintain the rate lock through the 90-day period. The $250 fee will be credited back to you at the time of closing. SoFi reserves the right to change or terminate this offer at any time with or without notice to you.
*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.

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

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

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

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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After months of searching, you’ve found your dream home. There’s just one problem: It’s marked as contingent. Can you still make an offer on a house that is contingent? In a word, yes.

Here’s what you need to know about contingent homes and what they mean for hopeful buyers.

What Does Contingent Mean On a House?

When scrolling through online real estate listings, you’re likely to come across a few different listing classifications. These tell you what stage of the real estate process a property is in.

A listing classified as “active” means the home is currently for sale and potential buyers are welcome to view the home and make an offer. A home listed as “pending” means a closing date has been set and all contingencies have been met. A home listed as “sold” is officially off the market.

In real estate, contingent means an offer has been accepted on a home, but before the sale can go through, certain criteria (specified in the contract) need to be met.

Many buyers don’t fully understand the contingent house meaning when it comes to their options. Unfortunately, this could mean buyers are throwing away real estate opportunities.

💡 Quick Tip: Thinking of using a mortgage broker? That person will try to help you save money by finding the best loan offers you are eligible for. But if you deal directly with an online mortgage lender, you won’t have to pay a mortgage broker’s commission, which is usually based on the mortgage amount.

Can a Contingent Home Fall Through?

Yes, it can.

In 2023, the National Association of Realtors® found that 5% of contracts over a three-month time period were terminated. Reasons for a contract falling through include job loss, unmet contingencies (such as the buyer not being able to sell their home), trouble with financing, home inspection issues, and more.

Financing Falls Through

According to a NAR® report, 87% of homebuyers financed their home. Home loans aren’t finalized until closing, so until a buyer signs on the dotted line on closing day, financing isn’t guaranteed.

Even though buyers may be pre-approved for financing, finalizing the process involves diving deeper into their financial matters. Sometimes unanswered debts come up or loan seekers have overestimated their assets.

Whatever the reason, financing can fall through at any time and push a home back on the market.

Appraisal Is Low

An appraisal must be completed when a home is being bought with a mortgage loan. A qualified appraiser determines the value of the home through a variety of measures, including condition and location.

An appraisal that comes in much lower than expected can push a home back on the market. Buyers might decide they are no longer interested, sellers might not agree to a lower price, or the financial institution providing funding could stop the transaction from taking place.

Surprises in the Home Inspection

A home inspection that turns up unexpected issues can void a contingent contract. Unless the buyer and seller can come to an agreement about who will absorb the cost of each necessary fix, it’s unlikely a new offer will be made or accepted.

A home inspection that finds a home to be in severe disrepair could make it difficult or impossible to secure funding, as well.

The Buyer Is Unable to Sell Their Home

One of the most common requirements written into a contingent offer is that the sale can’t go through until the buyer sells their home. Many homeowners can’t afford two mortgages at once, and this is the best way to prevent an overlap.

However, this leaves the seller in an uncomfortable position, not knowing if their home will officially sell in one week or three months. Unless specifics are written into the contingency contract, a seller may back out of the contract or accept another offer if they feel the sale is moving too slowly.

💡 Quick Tip: One answer to rising house prices is a jumbo loan. Apply for a jumbo loan online with SoFi, and you could finance up to $2.5 million with as little as 10% down. Get preapproved and you’ll be prepared to compete in a hot market.

How to Put in an Offer on a Contingent Home

In most cases, putting an offer in on a contingent home is an option to consider. Although it doesn’t guarantee you’ll close on the home, it does mean you could be first in line should the current contract fall through.

Putting an offer in on a contingent home is similar to the homebuying process of any active listing. Here are a few responses you could receive:

•   Crickets. In some cases, a seller and buyer may have already gone through the requirements and are approaching a closing date. If this is the case, you’re likely to hear crickets. Don’t take it personally.

•   We’ll get back to you. If your offer is appealing, you can expect the seller’s agent to want to speak with yours. A quick conversation between the professionals will likely reveal if the deal can take place or not. Keep in mind that if the sellers have accepted a contingent offer without a “kick-out clause,” they may not be able to back out of the contract.

•   Yes! If a motivated seller is not happy with the speed of the current buyer, your tantalizing offer could win them over quickly. If your offer is accepted, you’ll move forward with the process required by your lender. If you’ve offered cash, closing may happen rather quickly.

Buying a Contingent Home Is Possible, But Is It Worth It?

The answer to this question really depends on how much you want to own the home in question.

Making an offer on a contingent home can take you on a rollercoaster ride. Before you hop on, consider the benefits and potential pitfalls.

Pros

Fast closing. The sellers may be tired of their current contract and ready to move on. If you can put in a better offer, you could be closing sooner rather than later. Before you make an offer, make sure you’re really ready to buy a home.

Less competition. It may not be obvious on an online listing, but a contingent home’s contract could be dead in the water. And while other buyers scroll past the listing because they don’t realize they can still make an offer, you might be able to swoop in and get the home without worrying about competing bids.

Cons

Higher price. It’s less likely you’ll get a great deal when making an offer on a contingent home. In most cases, a contingent offer is high to encourage sellers to hold out if the closing process takes longer than anticipated. You may have to cough up a bit extra to get the home, which is why you should only put an offer on a contingent home that you absolutely love.

Wasted time. Think of putting an offer on a contingent home like asking someone out who is already in a committed relationship. Sure, there’s a chance they’ll say yes. But there’s no way to know if your efforts will be worth it.

The Takeaway

Can you still make an offer on a house that is contingent? Yes. But before you do, make sure the house is worth the added effort and be prepared to move forward quickly in the homebuying process.

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

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

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Unless you’ve slept through the last couple of years, you probably know that the housing market has heated up. Purchasing a home in a competitive real estate market can seem intimidating, but with patience and some smart strategies, you can succeed.

It can mean touring more homes than usual, putting in multiple offers, and making concessions that you might not undertake if the market were softer.

That doesn’t mean, however, that finding your dream home and getting a good deal can’t be done. Here’s how home shoppers can navigate a hot market and snag a great place to live.

What Exactly Is a Hot Market?

To put it in its simplest terms, a “hot market” is one when real estate inventory is low and demand is high, meaning many other buyers are looking to purchase a home as well.

It can often mean that homes enter the market and stay only briefly before selling at or above asking price. In general, if homes remain for sale for four to six months, it’s a balanced market of buyers and sellers.

However, if homes are selling faster than that, say in mere days or weeks, it’s typically considered a hot — or seller’s — market. If homes are sitting for longer than that, it’s regarded as a buyer’s market.

A hot market may sound tough to enter, but there are a few ways buyers can stand out from the pack and, with luck, win over a seller.

💡 Recommended: First Time Homebuyer Guide

Hot House Market Buying Tips

1. Hiring a Non-Tepid Agent

Hot market or not, a great agent can make all the difference in the homebuying process. An agent can help a buyer navigate choppy waters and will be the person buyers can turn to with questions about the market, the homes they are looking at, and much more.

A buyer’s agent is legally bound to help the buyer. A good agent will know what to look for in a home, may be able to recommend new neighborhoods buyers haven’t thought of, and can steer shoppers to good deals and away from bad ones.

2. Listing Musts and Wants

In a hot market, buyers may need to be more flexible about their ideal home and location. Before looking at homes, it might be wise to create a list of “must-haves” vs. “nice to have” items on your home-buying wish list.

If buyers know they can’t live without at least two bedrooms and two bathrooms, they should put that on their “must have” list. If they would like to have an in-home office but don’t need it, they can add that to the “nice to have” list.

It will probably help buyers to go through every item — garage, square footage, yard space, fireplace, schools — and draw their line in the sand. If a home doesn’t have everything on their “must” list, they can move on quickly. But if a property meets all the “musts,” perhaps it can have the “nice to have” items later via renovations.

3. Adding Sweeteners to an Offer

In a hot market, adding a few perks to a home offer can further tempt the seller because every little bit helps when there is the potential for multiple offers.

For example, sellers eager to move on could be enticed to go with buyers who can act quickly. To offer a quick close, buyers can ask their real estate agent to find out the standard closing time for the home and add to their offer that they are willing to close faster.

4. Offering All Cash

This most certainly isn’t an option for everyone, but if a buyer can offer all cash for a home, this may be the thing that tips the odds in their favor of winning a bid.

Sellers typically prefer all-cash offers because they present fewer hurdles than buyers who are going with a lender.

“Cash is king,” maybe you’ve heard. With a cash offer, there is no waiting for pre-approvals or approvals.

5. Waiving Contingencies

Looking to stand out further? Buyers could try waiving contingencies where they can.

There are lower risk contingencies people can waive, such as homeowner association contingencies, but there are also higher risk ones for buyers that could convince a seller to choose their offer.

For example, buyers can waive their right to an inspection. This means they will not require a professional inspector to check over the home for potential repairs. By waiving this contingency, though, buyers will be purchasing a home with many unknowns and taking on the full risk of a property that may need hidden and pricey home repairs.

Before waiving any contingency, it’s a good idea for buyers to have a long talk with their agent to ensure they are still protecting their rights and feel comfortable with any consequences.

Recommended: How to Rent in a Hot Housing Market

6. Giving It a ‘Best and Final’ Offer

In a hot market, odds are buyers won’t win any bids that are under asking price. If the house is right when it comes time for the best and final offer, buyers may want to consider trying to give it their all. That would mean coming in at asking price and often going over.

This is an important consideration when looking at homes in a hot market. Buyers may want to look at homes under their very top budget so they have room to negotiate up to, or over, asking.

Again, like contingencies, buyers should never go into a price range they are uncomfortable with or cannot afford in the long run. (Want to see how much a home could cost over the lifetime of a loan? Check out an online mortgage calculator to get an idea.)

7. Writing an Epic Letter

There is one more way to try to win a seller over (perhaps in a bidding war): by pulling on their heartstrings.

When putting in an offer, many real estate agents advise their clients to write a short letter to the seller on why they want to purchase the home.

Remember, selling a home can be emotional, and letting go of all the memories built in the space can be hard on the seller. But if they know that the next person to live in the home will love it as much as they do, they may be more willing to part with the property.

Buyers might want to express what they love about the home and how they plan to continue making happy memories there. As a bonus, buyers can try including a picture of their family with the letter so the seller thinks of them as people rather than just an offer.

8. Not Getting Discouraged

In a hot market, it’s important to stay patient. Going through the process could mean putting in multiple offers on multiple properties and losing out more than once.

Having Your Finances in Order

Before putting in an offer on a home in a hot market, it’s a good idea for buyers to have all their fiscal ducks in a row. That could mean shopping for the lender that’s right for them and/or getting a preapproval letter to show they are serious buyers.

Different lenders will likely offer different rates, terms, and perks, which buyers can weigh to decide which mortgage lender is right for them.

A SoFi Mortgage, with competitive rates, flexible terms, and low down payments, can be one smart option. Plus our online application process is quick and easy.

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.

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

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