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Buying a house at auction could be a great opportunity to scoop up a deal on a property. When homes are auctioned off, either due to foreclosure or other reasons, the highest bidder gets the property. Once the property is yours, you could move in, rent it out, or fix and flip it.

How does a house auction work? In terms of the mechanics, they’re not that different from other types of auctions. If you’ve ever been to an estate auction or charity auction, for example, then you might already have an idea of what to expect. But the dollar amounts are likely higher than you would encounter in a typical auction, so if you’re considering buying a house at auction, it’s wise to study the landscape before you start. Here’s what you need to know.

What Are House Auctions?

An auction is a sale that’s open to the public in which something is sold to the highest bidder. House auctions are regulated by state laws. An auction house or company can run the auction on behalf of whoever owns the home, which may be a bank, lender, or individual. How does an auction house work? Auction companies typically get a share of the sale proceeds in exchange for running the auction.

Real estate auctions can save buyers the time and stress of house-hunting for weeks or months on end. If you’re paying cash for the home — and most auction winners do — you don’t have to go through the home mortgage loan process either.

Why Are Some Houses Sold at Auction?

There are different reasons why a home may be sold at auction, but it’s often due to financial hardship on the part of the owner. For example, a home could be auctioned for sale if the owner:

•   Defaulted on the mortgage payments and the home is in foreclosure

•   Agreed to a short sale with the bank in order to avoid foreclosure

•   Failed to make property tax payments

•   Had their property seized as part of a government forfeiture

•   Didn’t pay homeowners association fees as agreed

In other instances, a homeowner may decide to put a property up for auction simply to unload it quickly. If someone inherits a home, for instance, they might decide to auction it off so they can walk away with cash in hand rather than listing the property on the market and waiting for it to sell.

Recommended: What Is a HUD Home?

How Do Auctions Work?

How does an auction work for a house? It’s not that different from any other type of auction. The auction company can announce the date and time of the auction beforehand, giving prospective bidders a chance to research the details of the property. People place bids on the property, either in person or online, by a prearranged deadline, and the person submitting the highest bid wins.

Types of Auctions

House auctions can be absolute, minimum bid, or reserve. How the auction is structured can depend on the seller’s preferences. Here’s how each type of auction works.

•   Absolute auction. In an absolute auction, the property is sold to the highest bidder. Unless there are no bidders at all, a sale is guaranteed.

•   Minimum bid auction. In a minimum bid auction, the auction company sets a minimum bid amount. Bidders must then submit starting bids that are equal to or above that amount.

•   Reserve auction. In this scenario, a minimum bid is not published but the seller reserves the right to reject any bids that don’t meet their reserve price — sometimes as much as several days after the auction concludes. This means there is no guarantee that the property will actually be sold, even to the highest bidder.

House auctions can be held online or in person. The format may depend on the auction house or again, the seller’s preferences.

Most auctions, including house auctions, also involve a buyer’s premium in addition to the so-called “hammer price” (the winning bid). The buyer’s premium is typically a percentage of the hammer price, usually under 10%. The premium is not part of your bid, but you should know what it is and factor that into your overall budget for bidding so that you don’t exceed your resources.

Types of Bids

In addition to there being different types of house auctions, there can also be different types of bids. The seller has the option to choose whether they’d like bids to be blind or open.

•   Blind bids. In a blind bid auction, bids are not disclosed. In other words, you won’t know what the person next to you is bidding. This type of bidding requires buyers to be able to make an educated guess in order to avoid overpaying for a property.

•   Open bids. In an open bid auction, bidders can see what price everyone else is offering for a property. This type of arrangement offers transparency and makes it less likely that you’ll overbid, however, it can lead to a bidding war if there’s a lot of competition for a property.

If you’re researching how buying a house at auction works, it’s important to know which type of bid arrangement the auction house uses beforehand. Otherwise, you could end up in a situation where bidding gets tricky and you risk going over budget or losing the property.

How Much Should I Bid?

There is no simple answer to this question, as the amount you’ll need to bid to win a house at auction can depend on the terms of the auction itself. If you’re in a minimum bid auction, for instance, then you’ll need to bid at least enough to meet the seller’s base requirements. However, you may need to bid well above the minimum to win the auction.

Doing your research before auction day can help you get a better idea of how much to bid on a house at auction. If you know, for example, that there’s still $100,000 remaining on the mortgage of a foreclosed home then you might set that amount as your maximum bid if there is no minimum.

However, you’d also want to know what the home is worth. If the property’s appraised value is only $70,000, then you’d likely want to adjust your maximum bid down. The more you know about the property, the easier it becomes to establish your minimum and maximum thresholds for bidding.

Example of a House Auction

How does buying a house at auction work in real life? Again, it can depend on several factors, including the state the auction is being held in, the auction company that’s being used, the seller’s preferences, and the home itself. Here’s an example of what an absolute, open-bid auction might look like.

You, along with other prospective buyers, are bidding on a home with no minimum. You know from your research that the property has an appraised value of $80,000 so you decide your maximum bid will be $70,000. Another buyer makes an opening bid of $30,000, which is followed by bids of $35,000, $42,000, $53,000, and $60,000 from the remaining bidders.

At this point, you decide to bid $63,000, which is still under your maximum bid threshold. As the auction continues, buyers one and two stop making new bids. Buyer three counters with $65,000 and you bid $67,000. Buyer three bumps their bid to $69,000, which prompts you to go to $70,000.

If there are no more bids, then you win the property and move on to the next step, which is to arrange payment with the auction company. If buyer three counters with $72,000, you’d need to decide if you want to go above your maximum bid or let the property go.

Buying a House at Auction: In Person vs. Online

Auction companies can host home auctions in person or online. The process is still largely the same, though there are some differences to know.

In Person

At an in-person auction, you and other interested bidders will meet at an appointed date, time, and place to make your bids. An auctioneer will run the auction and accept bids, according to the seller’s preferences. Should you win an in-person home auction, you’ll need to make arrangements for payment that day.

Attending an in-person auction can be more stressful if you’re in an open bidding situation and it starts to get competitive. You might be driven by emotion to make a bid that you otherwise wouldn’t if you felt less pressure to secure a particular property.

Online

Online house auctions also require you to show up at an appointed day and time to place your bids but you’re able to do it from the comfort of home or wherever you happen to be at the moment, as long as you have a strong internet connection. You and other buyers can make bids on the property and again, the winner gets the home.

Buying a house at auction online may be more convenient if you’re not able to go to the auction site in person. You could bid on homes on your lunch break at work or while you’re waiting in the carpool line to pick up kids from school. You may feel less pressure since you’re not surrounded by other eager buyers shouting out bids.

How to Find Real Estate Auctions

There are several ways to find real estate auctions near you, starting with an online search. You can visit real estate auction websites and filter for properties near you by your current location. Auction websites may also allow you to filter by property type or opening bid so you can narrow down your search to find properties that fit your budget. The number of properties available is driven in part by foreclosure rates in each state.

You can also look for home auctions near you using other means, including:

•   Craigslist

•   Facebook

•   Local newspaper advertisements

•   County treasurer or tax assessment notices online

•   County court websites

If you know a local real estate agent, you might also contact them to ask if they know of any upcoming property auctions. Finally, you can ask around with friends, family, or coworkers to see if anyone in your circle has a lead on a home that may be going up for auction.

What Bidders Need to Know

Before buying a house at auction, there are a few rules to be aware of. If you’re a first-time homebuyer or investor, here’s what you’ll need to know.

•   You don’t need a real estate agent to buy a house at auction, though it might be helpful to talk to one informally about how the auction works or the details of a home you’re interested in.

•   Houses sold at auction are usually as-is, meaning that if you buy a home that needs repairs, you’re responsible for making them.

•   Depending on the reason for the auction and who the seller is, you may not be able to get a full home inspection (or any inspection) before buying.

•   You may need to bring cash to the auction house to make a down payment or pay in full for any properties you win.

•   If you’d like to attend a house auction online, you may first need to demonstrate to the auction company that you’re a qualified, legitimate buyer.

•   Failing to follow through on the purchase after winning can result in the loss of any down payment or deposit you’ve made and you could also be barred from participating in future auctions.

It’s usually a good idea to read through the auction company’s policies beforehand so you know what obligations you have in attending the auction and if you win a bid.

Pros and Cons of Real Estate Auctions

Should you buy a house at auction? There are some advantages and disadvantages involved. On the pro side, you could buy a home for much less than what you could purchase one for on the open market. Homes that sell at auction may sell for below their appraised value, which could make it easier to find a bargain on a property. That might appeal to you if home prices are where you live have put home buying out of reach.

How much money you can save when buying a house at auction can depend on how motivated the seller is to get rid of it as well as the overall demand for properties in that area. When you compare the cost of living by state, the cost of living in California is much higher than other areas, largely because of how competitive the housing market is.

In terms of the downsides, most homes at auction are sold as-is. You run the risk of buying a home that looks like a great deal on paper, only to find out that it needs extensive repairs in order for it to be livable. If you’re trying to make some quick money with a fix and flip investment, for example, the final profit may fall short of your goals.

Another concern is ensuring a clear title on the property, particularly if it is in foreclosure or bank-owned. Order a title report on the property and look for secondary mortgage or tax liens. Sometimes the auction agreement will make the buyer responsible for these costs, so it’s a good idea to read the agreement carefully and to buy title insurance as well.

Unless the auction house offers a financing option, you’ll need to have cash on hand to complete the purchase. Coming up with tens of thousands of dollars to buy a home in cash may not be realistic for the average buyer. Last but not least, house auctions aren’t guaranteed. You’ll still need to go through escrow and closing on the property and, during that time, if the original homeowner is able to work out an agreement with the lender or bank that allows them to keep the home, your efforts to try to buy it could come to nothing. Think of winning a house auction as winning the right to buy the house, not winning the house itself.

Recommended: What Is a VA Loan?

Tips to Buying Auction Homes

If you’re interested in how to buy a foreclosed home or bank-owned property at auction, it pays to do your research as mentioned. For example, you might ask these questions before the auction.

•   Why is the home being sold?

•   Is it a foreclosure or bank-owned?

•   Will I be able to inspect the property beforehand or is it being sold as-is?

•   What type of auction is it and are bids open or blind?

•   How much cash will I need to bring? How much would I need to have easily at hand in the event that I have the winning bid?

•   Does the auction house allow financing?

•   What happens if the owner is able to reclaim the property?

The other tip to keep in mind is to know what you can comfortably bid, based on your budget. A real estate agent can also give you some valuable insight into the condition of the local housing market, which may make it easier to identify a good or bad buy.

If you go into a house auction without a firm limit set, it’s easy to go over budget and potentially end up paying too much for a property.

Risks of Buying Houses at House Auctions

House auctions are not risk-free, as you’re not always guaranteed total transparency. Some of the biggest risks to be aware of include:

•   Buying a home as-is, only to find out it needs a lot of work to make it livable. Big-ticket problems that may not be immediately visible might include mold, a defective septic system, or electrical problems.

•   Getting caught in a bidding war and paying too much for a property

•   Tying up all of your cash in an investment property that may take months to become profitable

•   Having your bid superseded if the homeowner is able to work out a last-minute agreement with the bank or lender

Being aware of the risks can help you to decide if buying a house at auction is right for you. And remember that there are other ways to invest in property, without having to own it directly. For example, you might collect dividends from a real estate investment trust (REIT), hold real estate mutual funds or exchange-traded funds (ETFs) in your brokerage account, or buy property alongside other investors through a real estate crowdfunding platform. If you are open to investing in commercial real estate, real estate options contracts are, well, another option.

The Takeaway

If you’re interested in how to buy a house on auction for yourself, it’s important to know what the risks are and what the process involves. At the end of the day, you might find that it’s easier to go the traditional route for buying a home.

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 Mortgages: simple, smart, and so affordable.

FAQ

What are the advantages of buying a house on auction?

Buying a house at auction could save you money if you’re able to pay less for a property than you would on the open market. Home auctions can offer opportunities for investors or would-be first-time buyers to save money on the purchase of a property.

What is the benefit of an auction house?

Houses sold at auction can be more affordable than homes sold on the open market. That’s an advantage if you’d like to buy a home, either to live in or as an investment property, but high prices are keeping you out of the housing market.

What happens when you bid at an auction?

When you make a bid on a house at auction, your bid can be topped by another prospective buyer or accepted if it’s the highest bid. If you make a winning bid, then you can move to the next phase, which involves signing the necessary paperwork and arranging payment to assume ownership of the home. \

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Photo credit: iStock/bymuratdeniz

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 for more information.

*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.

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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The total number of homes for sale hit a record low in August 2023. That means home sellers may get several offers when they put their house on the market.

To help stand out from the pack, some buyers choose to write an offer letter. They may believe an offer letter could help personalize the negotiation and possibly make a connection with the seller. But writing an offer letter comes with potential risks buyers should be aware of.

Thinking about writing an offer letter? Read on to learn how to write an offer letter for a house, what to say in the letter, what to avoid, how long the letter should be, and the risks that may be involved.

What Is a House Offer Letter?

A house offer letter is a personal letter written in hopes of helping to convince the seller to choose the buyer’s offer, especially when there are multiple offers on a house.

Offer letters have become more popular in recent years due to the high number of real estate bidding wars.

In an offer letter, a buyer, whether they’re a millennial homebuyer or any homebuyer, is trying to show the seller why they’re the ideal candidate for the house.

When writing a real estate offer letter, buyers often include certain details to help make a connection with the seller, such as:

•   Introductions. The potential buyer will want to say who they are, of course.

•   Contract details that might help. Buyers may want to briefly note that they’ve been pre-approved for a mortgage, are flexible with the closing date, or can otherwise meet the seller’s needs.

•   Compliments about the house. If there’s a well-tended garden or custom wall finishes, a buyer may want to note how much they like those things.

•   Points of connection. If a buyer noticed something in the house that could help them relate to the seller, like fishing gear in the garage or a piano in the living room, they might mention that they share those hobbies.

•   Explanation about their offer. A buyer could include the reason why they offered what they did for the house, but anyone who does this should be careful. Review it with your agent first to make sure you’re not saying something that might jeopardize the deal.

•   Thank them. Express gratitude to the seller for considering the offer.

💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

How Does a House Offer Letter Work?

Since an offer letter is an informal gesture, writing such a letter is optional. Plus offer letters do have drawbacks (more on that below).

If a buyer does write an offer letter, it would typically be sent, along with the formal offer on the house, to the seller’s agent.

Recommended: How to Write a Letter of Explanation for a Mortgage

Is It Worth It to Write a Letter With a House Offer?

A personal letter could help you stand out from others who are bidding on a house, but there’s no guarantee of that. Plus, an offer letter could cause problems. The National Association of Realtors is wary of offer letters because they might run the risk of violating the Fair Housing Act, even unintentionally. The Fair Housing Act seeks to create a level playing field for all people renting or buying a home, getting a mortgage, or seeking housing assistance.

For that reason, your real estate agent may advise against writing an offer letter. Instead, they may suggest that you choose another strategy for making your offer on a house more attractive.

How Long Should a House Offer Letter Be?

If you do decide to write an offer letter, the letter should be short and succinct. One page is plenty. And if your bid isn’t competitive enough to be on the seller’s radar in the first place, the offer letter probably won’t even be read.

What Should Not Be Included in a House Offer Letter

Perhaps even more important than what you write in your offer letter is what you should not include. Stay away from:

•   Overly saccharine statements. Sellers may get overwhelmed by buyers who are too profuse about their love for the property. Be complimentary, but don’t overdo it.

•   Letters that are too long. The seller doesn’t need to know everything you love about the house. Offer letters are more effective when they’re a page or less.

•   Too much personal detail. If you mention your partner or children, be aware that familial status is protected against discrimination under the Fair Housing Act. It’s wise not to share too much.

•   A picture of yourself or your family. This is another red flag. Race and gender, among other things, are protected against discrimination under the Fair Housing Act.

💡 Quick Tip: Not to be confused with prequalification, preapproval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for preapproval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.

How Do You Write a Strong Offer Letter?

First, make sure your home contracts offer is strong. You want to submit a strong offer before you work on a letter.

Then, when you sit down to write the letter, consider this: If you were having a conversation with your seller about the house, what would you want to tell them? Explain briefly why you love the home, and thank them for considering your offer. Keep the focus of the letter on the house, and avoid giving too many personal details. Use a friendly tone, and be genuine and sincere.

Keep the letter to one page or less.

Recommended: Guide on How to Save Money for a House

Tips for Buying a Home

Rather than an offer letter, you may want to consider one of the following strategies instead:

•   Submit a higher offer. Winning a bidding war often comes down to one factor: price. Offering a higher price for the house is an option to think about. You might also want to add an escalation clause, which can automatically increase your offer above other offers.

•   Offer all cash. That is, if you have the resources to do this. Data from Redfin suggests buyers who offer all-cash are two to four times more likely to be chosen.

•   Waive the financing contingency. Waiving this contingency could potentially increase your odds of winning the contract over other buyers, according to Redfin. Keep in mind, however, that waiving the financing contingency means you forfeit your earnest money if you can’t get financing before the contract deadlines.

And, finally, if you’re a first-time home buyer, you may want to look into first-time homebuyer programs that could be helpful to you in your quest to buy this particular home — or any home.

The Takeaway

Offer letters have become popular in recent years as the real estate market has heated up, but these letters do have drawbacks. They could even run the risk of violating the Fair Housing Act. Discuss it with your real estate agent and weigh the pros and cons carefully before writing an offer letter.

Also, consider other options that might help improve your chances of becoming a homeowner. For instance, you may decide that offering a higher price on the house, getting preapproved for a mortgage, or being flexible about the closing date is a better way to go.

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 Mortgages: simple, smart, and so affordable.

FAQ

How do you write a strong offer on a house?

In addition to making a strong offer on a house, you can write an offer letter. To write a strong offer letter, focus on the property. Tell the seller why you love the home, and thank them for considering your offer. Use a friendly tone, be genuine and sincere, and keep the letter to one page or less.

How to write an offer letter for a house for sale by owner?

In a house that’s for sale by owner, you’re likely dealing directly with the seller. In that case, you can address the seller by name in the letter and tell them why you like the house. Also, if you know there’s something they’re looking for, like a quick transaction, you could indicate that you’re flexible with the closing date. And if you’re preapproved for a mortgage, you could mention that as well.

How do you write a good offer letter?

Be succinct, genuine, and sincere in your offer letter. Focus on the house and why you like it, and avoid giving personal details. Thank the owner for considering your offer.

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Photo credit: iStock/Gorica Poturak

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

*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.

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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Rent prices are on the rise. According to the latest data from Rent.com, in August 2023, the national median rent ticked up to $2,052 per month. That has many people wondering, what is rent control, and can it help curb prices?

Rent control is a term used to describe price controls implemented by local governments on apartment units. Rent control limits the amount a property owner can increase rent prices during a certain period of time. It’s also usually accompanied by tenant protections allowing for lease renewals and protecting against unwarranted evictions. Rent control is more common in larger, expensive population centers like New York and San Francisco.

How does rent control work? Read on to find out.

What Is Rent Control?

Rent control is a government regulation that puts a ceiling on the amount of rent that can be charged to a tenant. This means landlords can’t charge the market rate for a rental in rent-controlled jurisdictions. Rent increases may be allowed, but they are limited and regulated by law.

How does rent control work in NYC? In New York, rent control can also refer to the Emergency Tenant Protection Act. This act was first enacted in the demilitarization period following World War II when housing shortages resulted from the large number of soldiers returning home from the war.


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

How Does Rent Control Work?

Your local government has the final say when it comes to rent control — unless they’re prohibited by law to enact price controls on housing units, as is the case in 33 states.

There’s often a rent board appointed, which is a mix of property owners, tenants, and other community members. The board has a say about rent adjustment amounts and other housing-related issues.

Rent control is usually applied to a specific area or building. For example, in New York, rent stabilization applies to buildings that were built between February 1, 1947 and December 31, 1973. (Pre-war, rent-controlled buildings revert to the newer rent stabilization program once a tenant moves out.)

The maximum price a landlord can charge can be set by the regulating agency. In New York City, rents are subject to the Maximum Base Rent Program, which is a formula for rents based on real estate taxes, utilities, operating and maintenance expenses, and vacancy allowances.

The economics of rent control can create a large demand. Because the supply of rent-controlled apartments is low, most tenants who want an apartment with rent control will wait on a list or enter a lottery system for many months or years.

History of Rent Control

New York City first enacted rent control when housing units were scarce following the end of World War II. It was called the War Emergency Tenant Protection Act and was later replaced by a different rent control method called rent stabilization. Rent stabilization has been in place since 1974 in New York City, and 1979 in San Francisco.

Rent Control vs Rent Stabilization

Discussions of rent control vs. rent stabilization are usually in reference to regulation in New York City.

In New York City, rent control generally applies to buildings constructed before 1947 with tenants in place prior to July 1, 1971. That date is important as it refers to a change in regulation laws where rent control gave way to rent stabilization.

Rent stabilization generally refers to price controls on buildings with six or more units constructed between 1947 and 1974. It can also include buildings removed from rent control that were constructed prior to 1947, as well as some other buildings that enjoy special tax advantages. Rent stabilization does not apply to co-ops or condos vs apartments. Tenants in rent-stabilized apartments have the right to renew their lease.

Today, the terms “rent control” and “rent stabilization” typically refer to the same thing: rent regulation.


💡 Quick Tip: Not to be confused with prequalification, preapproval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for preapproval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.

Pros and Cons of Rent Control

While rent control can protect tenants from large rent increases, it also means property owners have little incentive to maintain the property or create more housing units for the rent-controlled area. Here are some of the pros and cons of rent control.

Pros:

•   Tenants have some stability in the cost of their housing unit over time

•   Tenants usually also have some eviction protections

Cons

•   Landlords don’t have incentive to re-invest in other apartments or upgrade their current rentals

•   Unit size is not always a match for a family’s size

•   May contribute to housing shortages

Example of Rent Control

Rent control is determined by the local rent board or commission. That includes price increases. For example, if you started renting an apartment for $2,000 last year, and the maximum allowable amount for a yearly rent increase is 7.5%, the most your yearly rent would increase would be $150. That would bring your new rent to $2,150.

How to Find a Rent-Controlled Apartment

If you’re looking for a rent-controlled or rent-stabilized apartment, your city’s rent regulation authority is usually one of the best places to find them.

New York City’s government website has a list of rent-stabilized buildings, as well as guidelines on how to know if an apartment is rent-controlled. It’s even possible to submit the building’s address in an online form to find out if rent is stabilized.

Recommended: 25 Things to Know When Renting Out an Airbnb

States With Rent Control

Only seven states have rent control laws in place. They are:

•   Oregon

•   California

•   New York

•   Maine

•   Maryland

•   Minnesota

•   New Jersey

•   District of Columbia

Thirty-three states have laws that preempt (or prevent) local governments from implementing some form of rent control.

One of the reasons states may outlaw rent control regulation has to do with housing supply. Economists note that while rent control affords price control and some protection for tenants, it also negatively affects the housing supply. That’s because limiting how much a property owner can make discourages housing investment, such as investing in duplexes, as well as housing development in areas where rent control exists.

If a property owner is limited on the money they can make on their unit, they will invest in other areas that do not have these restrictions and where they may even be able to rent out extra rooms. This, in turn, exacerbates housing affordability because there are fewer units with more people to compete for them.

The Takeaway

Rent control has benefits, especially in high-density areas where expansion is limited and long-term tenants need some affordability. However, it does come with downsides, including possibly limiting the housing supply.

In addition, rent-controlled properties can be difficult to come by because there aren’t a lot of them. In this case, or if you’re simply ready to move on from apartment life into something you own, you may want to look into buying a house, including checking out first time homebuyer programs.

Or, if you’re an investor, perhaps you’re thinking of investing in single family rental homes. Either way, whether you want to buy a house to live in, or buy it to rent it out, you can explore your mortgage options. There are many different types of mortgages available, so you’ll have plenty to choose from.

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 Mortgages: simple, smart, and so affordable.

FAQ

Who benefits most from rent control?

Tenants already in place may benefit from living in an apartment where price increases are limited or controlled. Rent-controlled apartments are typically reserved for individuals and families that need affordable housing.

What is an example of rent control?

One example of rent control is this: If you signed a lease on a rent-controlled apartment for $1,700 per month and the maximum allowable rent increase is 3.5%, then the most your landlord could increase your rent would be by $59.50. That would bring your new monthly rent to $1,759.50.

What are the negative effects of rent control?

Economists say rent control creates housing shortages and doesn’t incentivize landlords to maintain or repair their rental units.

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Photo credit: iStock/gorodenkoff

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

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 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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If you own an Airbnb property or are contemplating offering one on the popular rental platform, you probably know that doing so can bring in a welcome stream of income. You also probably know that it can take time and energy to keep things running smoothly. Guests may cancel at the last-minute; your property’s dishwasher might break; and an array of other scenarios may arise, demanding your attention.

In this situation, you might want to find a cohost to assist you. A cohost can simplify the process by assisting with bookings, housekeeping, answering guests’ questions, and more responsibilities.

A cohost could be a friend or family member, a person you find and pay for their services, or a professional with whom Airbnb connects you.

Here, you’ll learn more about this option including:

•   What is Airbnb?

•   How does Airbnb work?

•   How does Airbnb work for hosts?

•   How to become an Airbnb cohost?

What Is Airbnb?

Airbnb is an online marketplace for private home stays (whether that means renting out a room, a floor of a house, or a whole property) as well as vacation experiences.

How does Airbnb work for hosts? Owners sign up to rent out a room, apartment, or house for a home stay. (Even treehouses turn up among the properties.) The hosts set their rates, and share their rental policies. Guests can then book via the Airbnb platform, which assists with communications and administrative tasks for a commission.

More than four million hosts now operate worldwide, with over 150 million users globally who have booked over one million stays. It’s a proven platform for coaxing an income stream out of any property, and it can be an enticing endeavor for first-time homebuyers.


💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

Who Books on Airbnb?

All kinds of people book on Airbnb: Recent grads, families, retirees, wedding guests, digital nomads, and more. Both frugal travelers and posh jetsetters alike are looking for lodging. Many people prefer the authenticity of an Airbnb to a cookie-cutter hotel or motel room.

How does Airbnb work for guests? They search for and book a property based on location, price, available dates, and desired amenities, among other factors.

When potential guests submit inquiries, owners receive immediate notification of the reservation request. Airbnb has technology in place to block guests with a record of negative behavior (such as property damage) from reserving properties.

How Does Airbnb Work for Owners and Cohosts?

There are many things to know when renting out an Airbnb. Here’s how Airbnb works for owners: Those who list new properties on Airbnb receive step-by-step instructions for setting up their space. They can be matched with a successful Superhost (that’s Airbnb’s term for highly rated and reliable hosts) to assist them.

If you bring aboard a cohost, they will be verified by Airbnb (submitting ID may be required). Once approved, they will have full privileges to help you with managing and optimizing your listing(s). Tasks can include:

•   Managing booking and reservation-related tasks

•   Answering prospective and current renters’ questions

•   Stocking and otherwise maintaining the property

•   Updating the listing as needed

•   Enhancing guests’ experience.

Recommended: Is It Smart to Buy an Investment Property While Renting?

How Much Do Airbnb Owners Get Paid?

If you are offering a property for rent on Airbnb, you are probably interested in turning a profit. So how does Airbnb payment work? The price you charge for your property and the number of nights you book will determine how much you earn.

If you consider this in more detail, the income from an Airbnb depends on a variety of factors, including the size of the property for rent, amenities (does it have a spa-style bathroom? A swimming pool?), the tourism market, local housing market trends, and the number of other Airbnbs you’re competing with.

Looking at the Airbnb site and sizing up your competition can help you determine how much to charge and how rates vary over the year.

In terms of how much Airbnb owners get paid of the amount renters pay, consider that most hosts pay a service fee of 3% of the rental subtotal (the nightly cost plus any fees you charge guests, such as cleaning charges). Airbnb doesn’t charge its hosts a payment processing fee.

In addition, guests usually pay Airbnb a 14% service fee on top of the subtotal.


💡 Quick Tip: A home equity line of credit brokered by SoFi gives you the flexibility to spend what you need when you need it — you only pay interest on the amount that you spend. And the interest rate is lower than most credit cards.

How to Become an Airbnb Owner with a Cohost

Want to launch your property on Airbnb with the help of a cohost? The platform makes it simple:

•   Go to the listing(s) where you’d like to add a cohost.

•   Click on “Cohosts” and then “Invite a Cohost.”

•   Add their location and their email or phone number, and click “Next.”

•   You’ll be prompted to select permissions for this person; then click “Next.”

•   You can add a note if you like, and then hit “Send.”

Airbnb will then handle inviting and verifying the cohost and adding them to your listing. You can have up to 10 cohosts per listing.

In terms of how to become an Airbnb cohost, the person you’ve invited will likely have to accept your invitation and then provide information and ID to Airbnb.

Airbnb Owner Requirements

Here are some of the owner requirements to offer a property as a rental on Airbnb:

•   Be of legal age. Perhaps it goes without saying, but minors shouldn’t be involved in renting out properties on the platform. While it may sound like a cool summer project for a teenage cousin to help manage a family lakehouse, that would be a no-go.

•   Make sure renting your property is legal. Depending on the home’s geographical area, a host may need to register the property or obtain a short-term rental license. Or you may not be allowed to rent out your property at all. A call to your city hall may be the best way to learn the details.

•   Know the tax implications. In some tax areas, Airbnb will handle the calculation, collection, and remittance of any local occupancy taxes on your behalf. In other locations, you may be responsible for this.

•   Cover yourself. Hosts should understand the liability insurance that Airbnb automatically applies to rentals. Hosts may want to also confirm that their homeowners’ insurance policy provides coverage for short-term rentals.

Recommended: What Is the Cost of Living by State?

Pros and Cons of Being an Airbnb Owner

As you consider becoming an Airbnb host with a cohost or without, you may want to review the benefits and disadvantages of renting in this way.

Pros of Being an Airbnb Owner

Are you thinking about how to become an Airbnb host for others? Among the upsides to consider are the following:

•   Hosting short-term rentals can bring in cash. This can help ensure you’ll have resources to make your home loan payments.

•   Income from rentals can fund renovations and other improvements, or it could help finance your long-term financial goals.

•   A successful rental history can increase the value of your property when you’re ready to sell.

•   Many people find hosting a rewarding activity, both as a business and a personal pursuit.

Cons of Being an Airbnb Owner

Here are some of the downsides of being an Airbnb owner:

•   It can be a big leap to give total strangers the key to your home. For instance, if the property is your primary residence, you will have to vacate for bookings. If your home contains treasured furniture or tableware, you may worry about damage.

•   Some cities, towns, and homeowners associations have passed legislation against short-term rentals.

•   Owners who rent their properties, even a few days a month, must pay taxes on the earnings.

•   While Airbnb provides insurance coverage automatically to hosts, you may want to make sure your homeowners insurance can cover short-term rentals as well.

•   It can be a time-consuming endeavor, and some people may find being a host to be frustrating in some ways.

Writing an Airbnb Host Listing

A successful Airbnb host listing is typically a combination of an enticing portrait of your property and all the vital, nitty-gritty details.

Usually, the listing will share:

•   A short introduction, which delivers an overview and highlights why it’s a terrific property

•   Room-by-room descriptions

•   Details about the property/outdoor features

•   Information about the location and things to do nearby.

Be sure to define terms that bookers may not know, such as what is a duplex or pergola.

Tips on Hosting on Airbnb as an Owner with a Cohost

Here are some ways to collaborate with a cohost:

•   Have your cohost manage the calendar, set holiday/peak rates, and answer questions.

•   Ask your cohost to share ideas for area attractions that draw guests. Mention these in your listing, including distances from your property.

•   Talk to your cohost about personal touches they think would please guests, like sharing a list of good local restaurants that don’t require reservations.

•   Ask your cohost to create house rules and determine how to share and enforce them with guests.

•   Have your cohost review the property and highlight anything that needs maintenance or that could be improved.

•   Give your cohost the job of restocking the property after each guest stay.

The Takeaway

If you’re considering offering a property on Airbnb or are already doing so, a cohost could make the management easier. A cohost could be a family member who helps out for free, or they could be a paid professional who manages a number of Airbnb rentals and has considerable experience. A cohost could help you boost the success of your hosting on this popular platform.

Are you just pondering becoming an Airbnb host and currently eyeing the perfect bungalow to rent out? Finding the best mortgage for your purchase is an important step.

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 Mortgages: simple, smart, and so affordable.

FAQ

What percentage does Airbnb take?

Airbnb typically collects a flat service fee of 3% of the rental fee subtotal. In addition, the guest pays Airbnb a 14% fee directly.

How much do owners have to pay Airbnb?

Airbnb will deduct a 3% fee from a rental subtotal (which includes the nightly fee, plus any other fees the host charges, such as a cleaning fee).

Do Airbnb hosts get all the money?

Here’s how Airbnb payment works: Airbnb hosts do not get all the money. They typically pay 3% of the subtotal (nightly plus other fees) to Airbnb and then get the rest. Airbnb doesn’t charge any payment processing fees.

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Photo credit: iStock/AJ_Watt

*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 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 for more information.

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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The Department of Veterans Affairs sponsors the VA loan program to help military members and surviving spouses become homeowners. If you’re interested in how to get a VA loan, you’ll need to first make sure you meet the government’s requirements and then find a VA-approved lender and seek preapproval for a loan.

Getting preapproved for a home loan can give you an idea of how much you’ll be able to afford. Having a VA loan preapproval letter in hand can also give you some leverage when it’s time to make an offer. Here’s a closer look at how to get preapproved for a VA home loan.

What Is a VA Loan?

A VA loan is a mortgage loan that’s backed by the federal government. The Department of Veterans Affairs works with a network of approved lenders that grant VA loans to military members and surviving spouses. Should a borrower default on a VA loan, the federal government steps in to help the lender recoup some of its losses.

What is a VA loan good for? There are four ways that borrowers can use them.

•   VA purchase loans allow you to buy a home through an approved lender.

•   Native American Direct Loans (NADL) help Native American veterans or veterans married to Native Americans buy, build, or improve a home on federal trust land.

•   Interest Rate Reduction Refinance Loans (IRRRL) can help make existing VA-backed loans more affordable through interest rate reductions.

•   Cash-out mortgage refinance loans can help eligible borrowers tap into their home equity to withdraw cash, while refinancing into a new loan.

In terms of how to get a VA loan, each of these options has different requirements that borrowers need to meet.

💡 Quick Tip: Apply for a VA loan and borrow up to $1.5 million with a fixed- or adjustable-rate mortgage. The flexibility extends to the down payment, too — qualified VA homebuyers don’t even need one!^{†^}

How Does VA Home Loan Preapproval Work?

Mortgage loan preapproval simply means that a lender has reviewed your financial situation and made a tentative offer for a loan. It doesn’t constitute final approval for a mortgage, but getting preapproved is often beneficial, as a mortgage preapproval letter can give you an edge if you’re vying with another buyer for a particular property.

VA home loan preapproval works much the same as any other type of mortgage preapproval, with one extra step: Before you apply for the loan, you’ll need to get a Certificate of Eligibility (COE) from the VA. This document shows your lender that you’re eligible for a VA loan, based on your service history and duty status. The minimum service requirements for a COE depend on when you served. You can request a COE online through the VA website.

After you have the COE, you’ll need to give the lender some basic information about your household income, assets, and how much you’re hoping to borrow in a process called prequalification. This will allow you to see — often in just a few minutes — what kind of mortgage terms you might qualify for. From there, you can choose a lender and go through the next step, preapproval.

How to Get a VA Home Loan Preapproval Letter

Getting a VA home loan preapproval letter is a relatively straightforward process. Here’s what you’ll need to do.

•   Obtain your COE from the Veterans Administration.

•   Choose a VA-approved lender.

•   Complete the lender’s preapproval application.

Let’s get into the details of securing a VA home loan preapproval. First, you’ll need certain documents on hand to apply for the COE, and those documents are specific to your military status. If you are a veteran, you’ll need a copy of your discharge or separation papers. Active-duty service members will need to furnish a statement of service signed by their commander, adjutant, or personnel officer. This statement needs to include your full name, Social Security number, date of birth, date you entered duty, duration of any lost time, and the name of the command providing the statement. You can find full details and an online COE application on the VA website.

Once you have your COE and have found a prospective lender, the lender will likely ask to see certain documents to verify your income and financial situation, including:

•   Tax returns

•   Pay stubs

•   Bank account statements

•   Investment account statements

You’ll also need to provide a valid photo ID, your date of birth, and Social Security number. This information is needed to process a hard credit check, which can impact your credit score.

After your lender has everything it needs to process your preapproval, it will review your finances and complete a hard check of your credit history. Assuming your credit score and income check out, and there are no issues with your COE, you should be able to get a preapproval decision within a few days.

How to Buy a Home With a VA-Backed Loan

Home mortgage loans offered through the VA are attractive for a few reasons. For one thing, you can buy a home with no down payment required. For another, VA loans can offer more attractive interest rates than other types of mortgage loans.

Now that you know how to get a VA home loan, if you’d like to buy a home with a VA-backed loan, getting preapproved is the first step. Again, VA loan preapproval can give you an idea how much you’ll be able to borrow, which can help you narrow down your search for a property. Once you find a home that you’re interested in, making an offer is the next step.

You can use a VA-backed loan to buy:

•   Single family homes with up to four units

•   Condos in a VA-approved project

•   Manufactured homes

VA loans can also be used to build a home. You’ll need to have the home inspected and appraised to make sure that the property is structurally sound and that its value aligns with the amount you want to borrow. If there are no issues, you can move on to the closing to sign final paperwork and pay the VA loan funding fee.

This fee is a one-time payment VA borrowers are required to make to help cover the costs of the VA loan program. The amount you’ll pay for the funding fee depends on whether you’re a first-time homebuyer and how much money you put down on the home, if any. Some buyers may pay no fee at all, or have it refunded.

Recommended: Cost of Living by State

Who Is Eligible for a VA Loan?

Eligibility for a VA loan is a two-pronged test. You’ll need to be able to obtain a COE from the government on one hand, and on the other, you’ll need to be able to meet the lender’s credit score and income requirements.

COE requirements depend on your duty status and time served. Generally, you’re eligible if you are:

•   An active-duty service member who has served at least 90 days continuously.

•   A veteran who served at least 24 months continuously or 90 days of active duty.

•   A National Guard member who has served at least 90 days of active duty.

•   A Reserve member who has served at least 90 days of active duty.

These requirements assume that you served between August 2, 1990 and the present day. If you’re a veteran, National Guard member, or Reserve member who served before August 2, 1990, the service requirements are different.

You may also be able to get a COE under other conditions. Here are a few examples (find a complete list on the VA website):

•   Are a surviving spouse of an eligible service member

•   Are a Public Health Service officer

•   Served as an officer of the National Oceanic & Atmospheric Administration (NOAA)

•   Served as a midshipman at the United States Naval Academy

If you don’t meet any of the requirements to get a COE for a VA loan, then you’ll need to consider other home loan options.

How to Get Preapproved for a VA Home Loan

VA loans can be attractive to buyers since the VA doesn’t require a down payment or private mortgage insurance. If you’re wondering how to get approved for a VA loan, here are a few tips to qualify for a mortgage.

•   Consider your credit. The VA loan program has no minimum credit score requirement but the higher your score, the better your odds of being approved. A higher credit score can also help you get a lower interest rate on your loan.

•   Know your budget. Estimating how much you can afford when buying a home is important for ensuring that you don’t go over budget. If you know that you’re going to be looking at homes in the $300,000 range, for instance, then you wouldn’t want to ask for $500,000 when you’re trying to get preapproved.

•   Check the lender’s requirements. Researching VA lenders can help you find the one that’s the best fit for your needs and situation. Comparing minimum credit score requirements and income requirements can help you weed out lenders that are less likely to approve you.

Ideally, you should request preapproval from just one lender but that doesn’t mean you can’t shop around first by prequalifying with several lenders to compare rates.

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

How to Find a VA Lender

The simplest way to find a VA lender is to use the resources available on the Department of Veterans Affairs website. You can also search for VA-approved lenders online. For instance, you might try searching for “VA lender near me” or “VA lender online application” to see what results turn up. If you aren’t sure a VA loan is right for you, check out a home loan help center to get more ideas for how to finance a home purchase.

Recommended: Cost of Living in California

How to Choose the Best VA Lender for You

One of the most important considerations when weighing how to get a VA loan is choosing a lender to work with. Comparing VA lenders is similar to comparing lenders for different types of mortgage loans, including conventional or FHA options. Here are some key things to consider as you shop around:

•   VA loan interest rates

•   Closing costs the lender charges, including origination fees

•   Minimum credit score and income requirements

•   Whether you have the option to buy points if that interests you

•   How long it typically takes for the lender to close a VA loan once you’re approved

It’s also a good idea to check out reviews from previous buyers to see what they have to say about a particular lender. The better the lender’s reputation is overall, the easier they might be to work with.

Tips on the VA Home Loan Preapproval Process

VA home loan preapproval may seem a little tedious with all the information that you need to provide. But it’s important that you don’t skip this step, as preapproval can work in your favor when it’s time to buy a home.

Here are a few tips for ensuring that your VA home loan preapproval goes as smoothly as possible.

•   Carefully read through the instructions for completing the application before you begin.

•   Organize your documents beforehand so that you’re not scrambling to find information later.

•   Review your application before submitting it to make sure you haven’t overlooked anything and there are no errors.

•   Opt for an online application process if possible, which could save you some time.

How long does it take to get a VA loan? While you might be able to get preapproved the same day or the next business day, closing can take anywhere from 30 to 60 days. That’s important to know as you plan out your home purchase.

The Takeaway

VA loans can offer some attractive benefits to homebuyers and getting preapproved is usually to your advantage. It’s important to take your time to find the right lender to work with so you can get the best loan terms possible.

SoFi offers VA loans with competitive interest rates, no private mortgage insurance, and down payments as low as 0%. Eligible service members, veterans, and survivors may use the benefit multiple times.

Our Mortgage Loan Officers are ready to guide you through the process step by step.

FAQ

Can you get preapproval for a VA loan?

Yes, it’s possible to get preapproved for a VA home loan. You’ll need to find a VA-approved lender to work with and verify that you’re eligible to get a loan through the VA program. Having VA loan preapproval doesn’t guarantee that you’ll qualify for a mortgage, however.

What do I need to get preapproved for VA loan?

To get preapproved for a VA loan, you’ll need to find a VA-approved lender. Next, you’ll need to provide the lender with some information about your finances, along with a Certificate of Eligibility. You can obtain this document from the Veterans Administration.

How long does it take to get a VA loan preapproval?

Assuming that you have all of the necessary documents and information to process your preapproval application, it may be possible to get a decision the same day. VA loan preapproval shouldn’t take more than a few days to obtain if you’ve checked off all the lender’s requirements.

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Photo credit: iStock/Prostock-Studio

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

^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
^{^}SoFi VA ARM: At the end of 60 months (5y/1y ARM), the interest rate and monthly payment adjust. At adjustment, the new mortgage rate will be based on the one-year Constant Maturity Treasury (CMT) rate, plus a margin of 2.00% subject to annual and lifetime adjustment caps.

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