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A trust can simplify the transfer of what is often a person’s most valuable asset: their real estate. It can keep a home out of the probate process and allow it to become the property of loved ones or a charity upon your death.

For many households, home equity represents their largest financial asset, and it has burgeoned. U.S. homeowners with mortgages saw their equity increase by $1 trillion at the end of 2022 compared with a year before, according to CoreLogic, a provider of property insights.

Here, a closer look at protecting one’s assets by putting a house into a trust.

Why Put a House in a Trust?

There are two main reasons: avoiding the probate process and protecting your property if you become incapacitated.
Put simply, probate is a court review of a deceased person’s will and assets. This involves resolving any claims against the estate, paying remaining debts, and distributing the decedent’s assets to their designated heirs.

Probate can be a lengthy and costly process. In the absence of a will, the probate court divides the estate according to the state’s succession laws. These proceedings often require hearings and a variety of legal and court fees, which can significantly chip away at the estate before it reaches the heirs.

Even with a will in place, probate is often necessary for your heirs to have the right to carry out your will. Things can become further complicated if the estate includes property in multiple states or the will is contested.

Putting property in trust can avoid probate altogether. A trust designates a successor trustee to manage the estate, as well as beneficiaries to receive assets, after your death. The trust can include clear instructions and conditions for allocating assets. This can help reduce the time and cost to pass your home to your heirs.

It’s also worth noting that trusts can safeguard assets if you become incapacitated and are unable to care for yourself. A trust can be created to take effect in this situation, thus allowing a family member or loved one to manage your estate and assets in your best interests. If you recover, you can resume the role of trustee for the estate.

Recommended: What Is a Trust Fund?

Do You Need a Trust If You Have a Will?

Only one in three U.S. adults has a will, according to one recent report. And even if you have created one, you may wonder whether you are handling your assets properly. For instance, you may ask yourself, “Should I put my house in a trust?” The answer will depend on your own financial goals and the needs of your heirs.

Who you intend to inherit your house is an important factor to consider. Federal estate and gift tax law permits the transfer of a house and other wealth to a spouse without tax liabilities. However, passing on a house to children or relatives of a subsequent generation can be more complex.

A trust goes into effect once you sign it and is generally more difficult to challenge than to contest a will. Placing a house in a trust also avoids the probate process — it’s not uncommon for the courts to take months or a year to settle a will, especially for larger estates.

Wills and trusts can be complementary tools for estate planning. For instance, a will can take care of smaller assets like family heirlooms that aren’t covered by the trust. Also, wills can be structured to move assets into a trust when you die.

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Types of Trusts for Estate Planning

There are multiple options available for putting your house in a trust. It’s important to consider financial goals, your beneficiaries’ needs, and creditor concerns when creating a trust.

Here’s an overview of common types of trusts, including how they work for passing on a house or other property. The basic kinds are revocable and irrevocable and they are typically part of an estate planning checklist.

Revocable Trust

Also known as a living trust, a revocable trust gives grantors more control in the management of their assets while alive. They’re still responsible for tax payments and reporting on investment returns.

If desired, a grantor can make changes or dissolve a revocable trust after it’s created. Getting remarried or buying a home could be possible reasons for altering a revocable trust.

Usually, the grantor (establisher) serves as the trustee (manager for beneficiaries), and a named successor only takes control if that person dies or becomes incapacitated.

A revocable trust becomes irrevocable upon the grantor’s death. A revocable trust does not protect a house and other assets from creditors while the grantor is alive.

Irrevocable Trust

An irrevocable trust differs in that it can’t be modified by the grantor without the approval of all beneficiaries. You effectively give up control and ownership of any assets placed in an irrevocable trust.

So why put your house in a trust with such rigid conditions? Irrevocable trusts can offer greater security for beneficiaries and render assets untouchable to creditors. Plus, you’re not subject to estate taxes because the assets are no longer yours.

Before permanently forfeiting assets to an irrevocable trust, it could be beneficial to consult a lawyer or find a financial planner.

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Other Types of Trusts

Aside from the two broad categories of trusts, there are more specialized options to address specific needs. Here are some additional types of trusts to consider.

• Charitable Trust: This type of trust transfers assets to a designated nonprofit organization or charity upon the grantor’s death. A charitable trust can be housed within a standard trust to allocate a portion of assets to a nonprofit while leaving the rest for family members or other heirs.

• Testamentary Trust: A trust can be created within a will, often for minors, with defined terms that take effect after your death. This is a type of revocable trust, as changes can be made up until death. It’s worth noting that a testamentary trust does not avoid probate court. The executor will probate the will and then create the trust.

• Generation-Skipping Trust: Instead of passing on a house to your children, you can use a generation-skipping trust to transfer assets to your grandchildren. This is more common for estates that exceed the federal estate tax threshold ($12.92 million in 2023) to avoid some estate tax payments down the line.

• Spendthrift Trust: If you’re concerned about how your beneficiaries will manage their inheritance, you can use a spendthrift trust to set stricter terms. For example, you could define a date or age when beneficiaries gain access to certain assets.

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Should I Put My House in a Trust?

It’s important to understand the implications of having a house in trust before making a binding decision. Here, the main advantages and drawbacks.

Benefits of a Trust

Bypassing the hassle, delays, and costs associated with probate is a leading reason for using a trust.

Probate expenses can vary by location and the size of the estate but traditionally include legal fees, executor fees, appraisal fees, and other administrative costs. While probate costs will vary depending on the size of the estate and the state you live in, they can often be 4% to 7% of the estate or more.

You may also want to avoid probate to keep the details of your estate private. Probate is a public process that can reveal your estate’s worth and chosen beneficiaries.

Trusts are also useful tools for providing a financial safety net for children in the unexpected event that both parents die. A trustee manages the assets on behalf of any minor beneficiaries. Terms can be set to transfer control of assets held in the trust to children when they reach a certain age.

Putting certain assets in a trust could help some seniors qualify for Medicaid. If you’re 65 or older, your home and furnishings are usually exempt from the asset limit to qualify, but the threshold is low: around $2,000 in most states.

Disadvantages of a Trust

Setting up a trust can be complex. There are usually more costs in creating a trust than a will.

With a revocable trust, you need to track income from assets held in the trust to report on your personal tax returns. If you designate a third-party trustee to manage the trust, maintenance costs could add up over time.

And if you put just your home in a trust, your other assets will still be subject to the probate process.

When a house is the only large asset, buying a house from a family member is a possible alternative. Though this can be contentious among relatives, it’s another option to pass on a valuable asset to the family while providing some financial security.

The Takeaway

Estate planning isn’t always easy. Putting your house in a trust is one strategy to reduce the time and costs associated with inheritance. Probate costs can eat up 4% to 7% of an estate, and putting assets into a trust can help avoid that. Even if you put a house in a trust, however, you are still liable for any mortgage payments due, which you may be able to lower via refinancing.

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Photo credit: iStock/BrianAJackson

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USDA loans are available for certain properties with no down payment required and possibly a lower interest rate than conventional loans. However, eligibility for USDA loans largely depends on borrower income and home location.

While those four letters, namely USDA, may conjure up images of prime beef or grain crops, this particular usage refers to a program that can encourage homeownership for those with lower incomes in rural and some suburban areas. These mortgages may also help people buy and repair homes in need of updating.

Here, you’ll learn more about what these loans offer, how they work, and who qualifies for them.

What Is a USDA Loan?

USDA loans offer a loan option with no down payment for certain qualifying buyers who plan to purchase property in rural or some suburban areas. These mortgages are guaranteed by a division of the USDA known as the USDA Rural Development Guaranteed Housing Loan Program.

While partner lenders typically issue the loans themselves, the fact that the government is taking on some of the risk of lending funds has a big benefit. It allows these loans to often offer a considerably lower rate than you’d find at a commercial lender.

To qualify for a USDA loan, you may have to earn below a specific income limit and buy in certain areas. You may also purchase a property in need of repair.

If you are eligible, another perk of these mortgages is that private mortgage insurance (PMI) is not required, which is another way they present an affordable option for some buyers.

How USDA Loan Programs Work

USDA Rural Development’s housing programs give individuals and families the opportunity to buy or build a rural single-family home with no money down, repair their existing home, or refinance their mortgage under certain circumstances.

The USDA promotes homeownership for low-income households and economic development in rural areas.

USDA loans are available to eligible first-time homebuyers and repeat buyers for primary residences.

USDA Loan Requirements

Here are more details on who qualifies for a USDA loan.

Single Family Housing Guaranteed Loan Program

This program is the one that most people think of when they hear about USDA loans.

The USDA guarantees 30-year fixed-rate loans originated by approved lenders so that people in households with low to moderate incomes can buy homes in eligible rural areas. (You’ll need to search with an exact address.)

The income threshold is defined as no more than 115% of area median household income. In other words, your household income can’t exceed the area median income by more than 15%.

Buyers can finance 100% of a home purchase, get access to better-than-average mortgage rates, and pay a lower mortgage insurance rate.

That means no down payment, but borrowers still might want to look into down-payment assistance programs that also may help with closing costs.

A USDA loan can be used to purchase, renovate, or build a primary single-family home (no duplexes).

Single Family Housing Direct Home Loans

These subsidized loans, issued directly by the USDA, are available for homes in certain rural areas and for applicants with low and very low incomes.

The amount of the subsidy depends on the adjusted income of the family, and it reduces the family’s mortgage payment for a certain amount of time.

Adjusted income must be at or below what’s required for the geographical area where the house is located, and applicants must currently be without housing that’s considered safe, sanitary, and decent.

In addition, they must be unable to qualify for loans elsewhere; meet citizenship requirements (or eligible noncitizen ones); legally be allowed to take on a loan; and not be suspended from participating in federal programs.

The home itself must meet certain requirements for USDA loan eligibility. It must:

•   Typically have no more than 2,000 square feet

•   Not have an in-ground swimming pool

•   Not have a market value that exceeds the loan limit for the area

•   Not be used to earn income from the home.

Typically no down payment is required, although borrowers who have more assets than are allowed may need to use part of them toward the purchase. The rate is fixed and, when taking payment assistance into account, could be as low as 1%. The repayment term can be up to 33 years, or 38 years for applicants with very low income.

Funds can be used to purchase, build, repair, or renovate a single-family home. Once the title is out of the borrowers’ names or they no longer live in the house, they must repay part or all of the subsidies received.

Apply directly with your state Rural Development office .

This online eligibility tool can help potential borrowers see if they might qualify.

Single Family Housing Repair Loans and Grants

This program, also called the Section 504 Home Repair Program, is for homeowners with very low incomes who need a loan to improve, repair, or modernize their homes.

The program also offers grants if the applicants are 62 or older with very low incomes, and the money will be used to remove hazards to health and safety. The borrower must own the home and live in it. Prospective homeowners must not be able to find affordable credit through other venues.

Current limits on both the loans and the grants are as follows:

•   Maximum loan amount: $40,000

•   Maximum grant amount: $10,000

•   Maximum per person: $50,000, if they qualify for both the loan and grant.

Loan terms can be up to 20 years, with a fixed 1% interest rate.

For details about how to apply, applicants may contact their state Rural Development office.

Homeowners of higher income levels who need to finance home repairs may want to look into home improvement loans.

Note: SoFi does not offer USDA loans at this time. However, SoFi does offer FHA, VA, and conventional loan options.

What Is the Minimum Credit Score for a USDA Loan?

The USDA does not set a firm credit score requirement. However, you are most likely to be approved if your score is in the 640 and higher range.

Even with a lower score, however, you may qualify for a loan.

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Pros and Cons of USDA Loans

This section will focus on the USDA guaranteed loan program.

USDA Loans Pros

•   Typically no down payment is required.

•   Lower rates than FHA and conventional loans on average.

•   There isn’t a minimum FICO® score to qualify, so a less-than-ideal credit history may not prevent the loan from going through, though lenders like to see a credit score of at least 640.

•   Lenders may also require a debt-to-income ratio (DTI) of 41% or under. Depending on other factors, a slightly higher DTI might be possible.

•   No private mortgage insurance (PMI).

USDA Loans Cons

•   Homes must be in eligible rural areas.

•   Applicants must meet income limits.

•   Only certain lenders offer the program.

•   USDA loans require a 1% upfront guarantee fee and a 0.35% annual guarantee fee, based on the remaining principal balance each year.

Other Types of Mortgage Loans

In general, if your household income is more than 115% of the area median income, you can’t qualify for a USDA loan. The income of the entire household is considered, even if someone isn’t going to be on the mortgage note. That’s just one reason you might need to seek another type of mortgage.

Three broad types are:

Conventional loans: These are provided by banks and other private lenders and are not government-backed loans. This is the most common type of mortgage today. Borrowers typically need to have a down payment of 3% to 20%, and the lender will look at the debt-to-income ratio and credit scores when deciding whether to grant the mortgage loan.

FHA loans: Lenders that issue these loans are insured by the Federal Housing Administration, and it can be easier to qualify for this type of loan than a conventional mortgage. Lending standards can be more flexible and, with a credit score of 580 or higher, the borrower might qualify for a down payment of 3.5%. Note that mortgage insurance for an FHA loan can be high.

VA loans: Veterans, active military members, and some surviving spouses may receive VA loans provided by banks and other lenders but guaranteed by the VA. Eligible borrowers can benefit from a loan with no down payment and no monthly mortgage insurance. Most borrowers will pay a one-time funding fee, though.

Different types of mortgage loans have benefits and disadvantages. As a homebuyer, it is beneficial to understand what is applicable to your situation.

First-Time Homebuyer Programs

Borrowers who qualify as first-time homebuyers can receive benefits. Loan programs include:

•   Freddie Mac’s Home Possible® program and Fannie Mae’s 97% LTV. The programs offer down payments as low as 3% for buyers who have low to moderate incomes.

•   The Fannie Mae HomeReady® mortgage program. Borrowers who undergo educational counseling can get help with closing costs.

•   Mortgages for qualifying first-time buyers, who can put as little as 3% down.

It can make sense for low- and moderate-income borrowers to contact their state housing agency to see what programs are available for first-time homebuyers.

Recommended: Find First Time Home Buyer Programs in Your State

The Takeaway

USDA loans support rural homebuyers and homeowners who meet income limits and whose properties qualify. Others shopping for a mortgage will need to research home loans and find a choice that suits them.

FAQ

What are the basics of how a USDA loan works?

USDA loans are available with no down payment and potentially a lower interest rate to borrowers who are buying certain properties in qualifying rural areas and who meet income limits.

What’s the difference between an FHA loan and a USDA loan?

These loans address different types of properties and have different qualifying requirements. With a USDA loan, there is no down payment requirement, there is no PMI, but borrowers must meet income guidelines and be purchasing properties in a rural or suburban area. With an FHA loan, there is a 3.5% down payment and a DTI requirement, but there is not the regional guideline for the property. However, PMI is assessed.

Is FHA better than USDA?

When comparing FHA vs. USDA loans, it’s not really a matter of one being better than another but of which one suits your needs and which one you qualify for. An example: If you are buying in a rural area, you might get a USDA loan requiring no down payment. If you are buying in a metropolitan area, you might instead qualify for an FHA loan with 3.5% down.

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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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Human resources and benefits managers have perhaps never been more put to the test than during the height of the Covid-19 pandemic.

The pandemic forced employers to quickly learn how to manage a remote workforce while trying to fill immediate needs for short-term benefits, such as emergency savings and child and elderly care support. At the same time, economic instability and the racial justice crisis added to employees’ concerns and stresses.

Now, you may still be in the sorting-out stage, trying to figure out how best to take what you learned in the crisis and apply it to long-term policies and tactics that will continue to support employees moving forward.

Here’s a look at three key strategies HR pros may want to consider, as workers continue to face uncertainties in the economy and the world, and in the event of any future crises.

1. Make Sure Communications Are Honest and Accurate — and That They Reach Everyone

You’ve likely hit some obstacles as you tried to communicate Covid-oriented policies and protocols among your far-flung workers. In the process, you may have found strategies that work for you and others that don’t. Add to those lessons the following tips to help you move forward.

Be Honest

Research shows employees engage more if they think company communications are honest. That means it’s OK to tell employees management is still looking into a change or isn’t sure exactly when a new policy will be implemented. In uncertain times, it’s better to keep in touch. Employees are looking to you for leadership, but they also want to be in on the process when changes are taking place. What’s more, giving employees honest updates can avoid the need for damage control later.

Be the Voice of Reason and Compassion

Your employees are likely overloaded with news and information, some of which may be contradictory and confusing. It’s important that your communications stay on top of breaking news and add a clear, helpful, and understanding voice to the discussion when events impact the company, the employees, and benefits.

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Take a Multi-Channel Approach

While email is generally still the most common way to communicate with employees, you also want to use mobile and social media to help ensure that all employees see vital communications no matter where they are or what their work situation may be. This will be, literally, reaching out to your employees where they are.

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2. Review Your Voluntary Benefits

In times of uncertainty, employees may look to their employer for a shoulder to lean on. Many HR professionals have recognized this through the Covid-19 crisis by offering a variety of flexible benefits that can help employees solve their short-term financial challenges today and assist them in building a stronger future.

Research shows that more employers are offering voluntary benefits across a wide spectrum of needs. According to a 2022 survey by the professional services firm Aon, the number of employers offering new or additional voluntary benefits increased 41% from 2021 through 2022.

The fastest-growing benefits employees are offering include supplemental health insurance policies (e.g., critical illness, accident, and hospital indemnity), life insurance, student loan assistance programs, identity theft protection, legal benefits, pet care, and auto/home protections.

Whatever combination of flexible or voluntary benefits you may be considering, you’ll want to be sure it fits your workers’ demographics and pressing needs. A variety of well-chosen benefits can help your employees face their specific challenges while also reducing stress and calming nerves during any period of uncertainty.

Recommended: 4 Ways HR Pros Can Better Support Financial Wellness

3. Help Employees Balance Short-Term and Long-Term Financial Well-Being

In uncertain times a flexible financial well-being approach that includes the short-term benefits employees need to make it through is more important than ever. That’s why so many employers have introduced the types of benefits that employees feel are most relevant to their current financial concerns. Those may include emergency savings programs, homeownership benefits, and student loan repayment programs, to name just a few.

But this doesn’t mean that the importance of retirement savings and other long-term benefits should be diminished. Far from it. The security of knowing long-term retirement savings is in place can help add to employees’ overall financial well-being, especially during tumultuous times. Through effective communication and education programs, HR professionals can help employees balance short-term and long-term financial needs and goals.

It’s essential in times like these to try to help employees feel — and be — secure. These strategies may help you and your company continue to improve financial well-being during both calm and more tumultuous times.

Products available from SoFi on the Dashboard may vary depending on your employer preferences.

Advisory tools and services are offered through SoFi Wealth LLC, an SEC-registered investment adviser. 234 1st Street San Francisco, CA 94105.

SoFi Student Loan Refinance Loans, Personal Loans, Private Student Loans, and Mortgage Loans are originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org ). The 529 Savings and Selection Tool is provided by SoFi Wealth LLC, an SEC-registered investment adviser. For additional product-specific legal and licensing information, see SoFi.com/legal. 2750 E. Cottonwood Parkway #300 Cottonwood Heights, UT 84121. ©2024 Social Finance, LLC. All rights reserved. Information as of November 2024 and is subject to change.


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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Modular homes are increasingly capturing interest as a fast and affordable housing option. The global market for modular homes is forecast to grow from $82 billion in 2022 to $139 billion in 2029. These houses are built from factory-made components and are then constructed on a permanent foundation on a building site. They must meet the Department of Housing and Urban Development standards, as well as local guidelines.

Not to be confused with manufactured homes (previously called mobile homes), which can be moved from location to location, a modular home can be a good option to what are known as stick-built or traditionally constructed homes.

Could one be right for you? Here are the pros and cons of these structures, to help you decide if this might be your next home sweet home.

What Are Modular Homes?

Modular homes are constructed in a way that differs from a traditionally built home. Many of the components are made in a factory and then shipped to the property, where they are assembled on a permanent foundation.

The process is typically less expensive and faster than a stick-built home (meaning ones that are assembled piece by piece at the site).

As briefly noted above, modular homes are permanent structures and are subject to local and federal standards.

Recommended: Mobile vs. Modular vs. Manufactured Homes

How Are Modular Homes Constructed?

One of the biggest differences from a traditional home is the way modular homes are constructed. The house’s components are assembled in a factory and delivered to the homesite in one or more trips. The modules may be akin to three-dimensional boxes that are connected to one another and the foundation at the job site.

The benefit of constructing modular home components in a factory is the controlled environment. Because the parts are assembled under ideal conditions (perfect temperature, humidity, etc.), buyers can usually expect a consistent, high-quality build.

In addition, the actual build can move more quickly. Estimates of the time to build a modular home range from 16 to 32 weeks, depending on how customized the plans are and other variables.


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The Pros and Cons of Modular Homes

As with most things in life, there are pluses and minuses to modular homes. Consider these points to decide if one could be right for you. First, the upsides:

•  Modular homes are typically 10% to 20% less expensive than traditionally built homes.

•  They can be built up to 30% to 60% faster than stick-built homes.

•  Depending on the builder, they may be customized to suit your needs, both in terms of layout/square footage and finishes. You can get a very basic home or a truly luxe, mansion-like one.

•  They can be more energy-efficient than traditionally built houses, and the materials and building process may be more environmentally friendly as well.

•  They are considered better able to withstand environmental threats (flooding, hurricanes) than traditionally built homes.

That said, there are some disadvantages to modular homes to consider:

•  You need to add in some costs to your home-buying budget: the cost of the land, the foundation, and other related expenses. Yes, you are paying for those things when you buy a stick-built house, but it’s already rolled into the price.

•  You will need to investigate how to finance your home. If it’s an already built home, then a home loan will work. But if you are building from the ground up? Rather than getting a mortgage (since you aren’t buying an existing home from a seller), you may want to look into construction loans. Some modular home companies offer their own financing and lending programs.

•  Depending on the modular home company, you may not be able to get every last detail you want. Shopping around can help you find the top features you want in your home.

Modular Home Risks

There are a couple of considerations prospective modular homeowners should be aware of:

•  Finding land can be difficult in some areas. If you love modular homes but want to live in a suburb that has a hot housing market, you may be hard pressed to find a lot that works for you.
(You also may need a land loan to purchase your property if you do find a lot you love.)

•  It may be difficult to make changes once construction has started because so much of the home is pre-built.

•  Bias exists. Some people confuse modular homes with manufactured or mobile homes, which don’t have a foundation, and may therefore avoid them. This could mean a real estate agent might not show buyers a modular home that’s for sale, for example, due to this misperception.

How to Find Modular Homes for Sale

You can shop for pre-existing modular homes on major real estate websites like Realtor.com and also on specialized sites that list this type of home.

To construct a modular home, you can look at such sites as modularhome.org and modularhomeowners.com. Also, with the growing popularity of modular homes, you may well be able to get a word-of-mouth referral from someone in your circle.

How to Choose a Modular Home

When considering a modular home builder, much will depend on the following factors:

•  Do you like the style of the houses they build? The floorplans?

•  Are their prices lining up with your budget? Do they offer financing, if you need it?

•  Where are they located? If their factory is somewhat close to you, which can help reduce transportation expenses?

•  Are you impressed with the quality of their work? Their customer service?

•  Which brands do they partner with? Many manufacturers work with certain vendors for windows, doors, appliances, etc.

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How to Finance a Modular Home

Financing a modular home will take different paths depending on whether the house is already constructed or you’re building it.

•  For already built homes, you may look into conventional mortgage loans, FHA, USDA, and VA loans, just as you would for any other property you are interested in.

•  If you are building your own modular home, then you will probably need to apply for a construction loan to have the funds to get your house over the finish line.

•  Some modular home companies offer financing options.

•  You might also see if a personal loan could help you afford a modular home. Some lenders will allow you to buy a property with the funds; check with your lender, and understand the interest rate you will be charged.

Are Modular Homes Worth It?

Whether a modular home is worth it is a very personal decision.

For some people, there may be no greater satisfaction than working with a modular builder to specify their dream home and seeing their home come together, usually more quickly and less expensively than other building methods. They can collaborate with their builder and find a house plan that checks off all (or most) of the items on their home wish list.

Many people are thrilled with the eco-friendly aspects of these homes as well.

However, there are also people who find a vintage home more appealing or who would rather walk through an already built home and know exactly what they are buying.

Recommended: How Much Does It Cost to Build a House?

Modular Home Tips

If you’re set on buying a modular home, here are things to consider:

•  Style of home. Modular homes come in various styles, from contemporary to log cabins. It can be wise for buyers to shop around and work with a modular home manufacturer that suits their taste.

•  Manufacturer location. The cost of transporting a modular home can be high. It may be essential for the budget-conscious modular homebuyer to work with a manufacturer close to the home’s final destination.

•  Custom builds. Some modular home manufacturers may offer more customizable options, from floor plans and finishes. Do your research, and find a builder who can check off most of the priorities on your wish list.

•  Timeline. Some modular homes go up relatively quickly, while other manufacturers could be dealing with back orders. If time is of the essence, choose your builder carefully.

The Takeaway

Modular homes are growing in popularity. Components (modules) are factory-built and then assembled on a foundation; this process can be faster and more affordable than buying a traditionally built home. They also often have environmental benefits.

However, they aren’t for everyone: Building your own home is very different than hitting the open houses, and financing a modular home likely takes you on a path that involves a construction loan. If, however, you fall in love with an already built modular home, then you can usually apply for a mortgage from a number of lenders.

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FAQ

Is a modular home a good investment?

A modular home can be a good investment. They often offer energy efficiency which is a selling point. However, a modular home’s value will be dependent on the housing market in your area, just as it would be with any other kind of home.

Are modular homes dangerous?

The dangers of modular homes are minimal. As long as the assembly of the modular home complies with local building codes, modular homes are as safe as a traditionally built home.

Is the value of modular homes decreasing?

Modular homes appreciate and depreciate in a way that’s similar to traditional builds.

Where can you get financing for modular homes?

Among the possibilities from various lenders are a construction loan, financing from your builder, or a personal loan.

How long will a modular home last?

With proper maintenance and high-quality materials, a modular home should last as long as, or longer than, any traditionally built home. Some of the first modular homes, built in the early 1900s, are still standing today.

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If you’re planning to pursue additional studies after you get your undergraduate degree, a fellowship could help you make your career dreams come true while also footing some of the bills. However, unlike a scholarship, you may be expected to work in return.

What is a fellowship? And how does it work? Read on to find out about fellowship programs and how they might help bring your total educational costs down.

What Exactly Is A Fellowship?

In short, think of a fellowship as a scholarship, but one you have to work for — aside from the work of filling out the application for the program in the first place.

The fellowship definition, broadly speaking, is this: A fellowship is a program that allows students — usually graduate students — to continue their education while earning money at the same time, most often in exchange for doing work in their field of study. It can help cover at least some of the cost of college.

A fellowship might be as short as a few months or as long as several years; it might be funded for a few thousand dollars or cover the entire cost of your graduate education, including living expenses.

The work involved might be field research, local community work, or teaching undergraduates in your discipline while you pursue higher studies. There’s a lot of variety out there depending on the program.

Fellowships are competitive prizes, and successfully securing one often requires a history of high academic merit and also writing a killer application essay (or several). The idea is that students who are awarded fellowships show potential in their field and have the capacity to become successful professionals later on.

While fellowship monies don’t need to be repaid after you graduate from the program (so long as you adhere to the parameters set out by the organization offering the fellowship), you may be doing some work or service in exchange for the funding.

Recommended: How to Pay for Grad School

Types Of Fellowship Programs

Although there are a large variety of individual fellowships programs, there are three common types you’re apt to run into.

1. Graduate Fellowships

Graduate fellowships help graduate students pursue their education by subsidizing some or all of the costs in exchange for work on-campus.

For instance, a graduate fellowship for a master’s degree in creative writing might come with a tuition waiver as well as a monthly stipend to cover living expenses, an option to purchase affordable healthcare through the school, monies to cover certain educational related travels, and so on. In exchange, the student is generally expected to teach a certain number of beginner-level courses in their field to undergraduate students.

2. Postdoctoral Fellowships

For students who’ve already earned their doctorate degrees, postdoctoral fellowships can open the door to even more education, which can help these scholars become specialized in a very, very specific aspect of their field.

What is the fellowship definition in this instance, and how does the fellowship work? A postdoctoral fellow might be expected to complete a certain amount of research or, again, teach courses while they continue their studies. In exchange, they might receive funding for their coursework as well as extracurricular activities like relevant travel.

3. Medical Fellowships

If you’re pursuing a career in the medical field, you may be wondering, what is a fellowship in medicine? For physicians and dentists who’ve already completed medical school, a medical fellowship can help them continue their training and gain more competency in a specific area of medicine.

Medical fellowships generally come after a doctor has already completed their residency. While fellowships provide an excellent learning experience and often better pay than a residency does, they still pay less than a third of the average full-fledged physician’s salary. To put it in perspective: Medical fellowships pay approximately $60,000 to $70,000 a year on average, while a primary care physician averages about $260,000 annually.

That means careful budgeting is likely to be required while you complete your medical fellowship — and, honestly, with any kind of academic or research fellowship.

What Is A Fellowship Like?

As mentioned above, fellowships don’t generally provide tons of money for living expenses — your room and board may or may not be included, or you may be offered a flat stipend with which to cover your own cost of living.

Graduate students may be expected to do a lot of work for what feels like a minimal paycheck. But having one’s tuition waived is a big deal that can lead to substantial savings. This is especially true in the long term, when you consider the interest on graduate school loans.

Not only that, graduate students may already have undergraduate loans to worry about as well. And, since one of the basics of student loans is repaying them, that is likely to be top of mind. A fellowship may be a great step toward pursuing the career of your dreams without the additional burden of even more student debt.

One option for grad students to look into regarding their undergraduate loans is deferring them until after school. However, even with deferment, you might want to put some money toward student loans while still in school, to help reduce your payments later on.

Another possible alternative to consider is refinancing student loans, particularly if you could qualify for lower rates or better terms that might help reduce your monthly payments. (Be aware that you may pay more interest over the life of the loan if you lower your payment by extending your loan term.) Refinancing federal loans does mean giving up access to federal programs and protections. But if you don’t need those benefits, refinancing might be an option for you.

Recommended: Private Student Loans Guide

Is Applying For A Fellowship Worth It?

Given the amount of work involved and the relatively low paycheck, is applying for a fellowship worth it in the first place? In the end, only you can make that decision for your own educational and financial future — but here are some pros and cons to consider.

Pros:

•   Fellowships offer you the opportunity to gain hands-on experience in your field, which can help you hone your skills and also learn more about whether or not you like the work in the first place.

•   Fellowships can help keep you from racking up student debt, which is particularly attractive if you already have loans to repay from undergrad.

•   Fellowships last only for a short amount of time, but the experience you get by taking one on can help you create a long-lasting and stable career.

Cons:

•   While completing a fellowship, you’re likely to work very hard for what feels like not very much of a paycheck.

•   The application process isn’t very straightforward and will require some dedication and work. And even with great credentials, you may not get the fellowship.

•   Fellowships may have very specific requirements, such as GPA or work hour minimums, and your fellowship may be revoked if you don’t complete the project or adhere to the guidelines.

The Takeaway

Now that you know the fellowship definition and all it entails, you need to decide whether to apply. Either way, one thing’s for sure: educational expenses can really add up, especially for highly-trained specialists like dentists and doctors.

In fact, according to recent data, the average American doctor has a whopping $250,990 in student loans — which can add up to tens of thousands of dollars in interest paid on top of the principal debt.

One of the advantages of refinancing student loans is that you might qualify for more favorable terms. SoFi offers a range of options for refinancing student loans, including a Medical Resident Refinance program offering lower rates for physicians and dentists. Just remember that refinancing any federal loans will effectively eliminate them from any federal programs or benefits, so it may not make sense for every borrower.

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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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