SoFi

Mailing a check safely involves filling it out accurately, selecting the right envelope, and sending it via a secure method. These steps, among others, can help you avoid having a check get lost or stolen when mailed.

While electronic forms of payment are increasingly popular, there is still a fairly robust market for sending payments via check. According to a recent GOBankingRates survey, more than half of all Americans wrote a check last year. However, the United States Postal Service (USPS) has seen an uptick in mail theft in recent years, meaning for those who do write checks, taking extra care when writing and sending checks can be a wise move. Learn the how-tos here.

Preparing the Check

There are a few things you can do to help make sure any checks you write from your checking account are safe, even before you put it in the mail:

Filling Out the Check Correctly

The first thing to do to help ensure your checks are safe in the mail is to fill the check out correctly. This includes making sure all the information is accurate and that you don’t leave any areas of the check blank.

If you’re writing a check and there’s blank space between the amount and the part of the check that is typically printed with the word “dollars” to the right, you can fill that in with a horizontal line. That can help prevent someone from altering the amount.

Adding Security Features

If the check is for a high value or you have reason to be nervous about its safety, you can also use something called a security pen. Unlike a traditional pen whose ink can be washed away, security pens inject non-washable ink into the check, making it harder or even impossible for it to be used fraudulently.

You can also write “For Deposit Only” on the back of the check (underneath where it will be endorsed), which can make it more challenging for someone other than the intended recipient to cash or deposit the check.

Choosing the Right Envelope

When you opened your bank account, you may have been given the opportunity to order check accessories, such as opaque or security-lined envelopes. These are specially designed so that a person holding the sealed envelope can’t easily tell that there’s a check inside.

If you didn’t order these envelopes when you first opened your account, it can be a wise move to purchase these security envelopes, available at many big box and office supply stores as well as online retailers.

If you don’t have this kind of envelope handy, it can be wise to fold a piece of blank paper around the check, making it less visible through a standard envelope.

Recommended: Does Switching Banks Affect Your Credit Score?

Addressing the Envelope Properly

One key detail in mailing a check safely doesn’t involve the check itself at all. Instead, it focuses on making sure you address the envelope properly. You’ll want to write the recipient’s address in the correct format, with all possible details (such as apartment numbers), and with clear handwriting. Making sure you do so can help ensure that your check gets to its destination vs. getting lost in the mail.

Recommended: How to Use an APY Calculator

Secure Sealing Methods

In addition to addressing the envelope properly, it’s important to seal your envelope securely. Simply licking the envelope or sealing it with water may not be sufficient — instead, consider securing your envelope with tape or security seals. Just be sure you don’t tape over the stamp; that can invalidate the postage.

Mailing Options

You also have several options for mailing a check, and the choice can affect how secure your check will be when mailed.

Regular Mail vs. Certified Mail

One choice you have is whether to send your check via regular mail or certified mail. Certified mail provides proof of delivery (and optional signature confirmation), so it may give you additional security and peace of mind regarding someone stealing the check and trying to commit bank fraud. However, it does come with an additional cost.

Using Tracking Services

You can also use a tracking service when mailing a check. Both the USPS as well as private carriers such as UPS or FedEx allow you to purchase tracking services and often have the option of requiring a signature upon delivery, further enhancing security. This intel will help you know where your check is and when it’s been received by the payee. If you have multiple bank accounts, using a tracking service may help you stay organized with which checks from which accounts have been received.

Additional Safety Precautions

Some additional safety precautions that you might take would be avoiding any outdoor mailboxes (whether at your home or a blue USPS box in the community), hand-delivering your check to the post office, and/or informing the recipient to be on the lookout for your check, perhaps with information on when and from where it was mailed.

If you do find that your account has had fraudulent activity, contact your bank’s customer service department as soon as possible. They may be able to figure out what happened, reverse the charges or, in a worst-case scenario, close your bank account and reopen it with a new account number.

Alternatives to Mailing Checks

While there may be some scenarios where you absolutely must mail a physical check, it is becoming increasingly accessible to transfer money between banks electronically.

Taking advantage of ACH transfers or other electronic payments possible with online banking, as well as peer-to-peer payment apps, can help to eliminate the risks of sending a check payment through the mail.

Recommended: 7 Tips to Managing Your Money Better

The Takeaway

If you need to mail a check, taking a few simple precautions can help it arrive safely. These include filling out the check and the envelope correctly, using a security pen and/or secure envelopes, and taking advantage of services such as certified mail, tracking, and proof of delivery. While these precautions may come with added cost and effort, they may pale in comparison to the cost of dealing with your check being intercepted and used fraudulently.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

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FAQ

Should I use a special pen when writing checks for mailing?

You can use a special kind of pen called a “security pen” to enhance security when writing checks. The ink from a traditional pen can be washed away, leaving fraudsters with a blank check that they can make out to a different name and for whatever amount they please. Security pens infuse checks with non-washable ink, which makes it difficult or impossible for fraudsters to get access to your check.

Is it safer to mail checks from a post office rather than a mailbox?

Yes, generally it is safer (and recommended) to mail checks from a post office rather than from your mailbox or an exterior blue Post Office mailbox. While taking your checks inside a post office building doesn’t guarantee something won’t go wrong, it does cut down on the risk that someone will intercept your check before it gets to the post office.

What precautions can I take when mailing a check internationally?

There are a few precautions that you can use when mailing a check internationally. One is to conceal the check within an additional layer of paper or a secure envelope, as you would in the U.S. You can also use a secure pen to write your check and consider trackable options for sending it overseas. You could also reach out to the payee to see if there is an alternate electronic way to make the payment.

Photo credit: iStock/Goodboy Picture Company

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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This content is provided for informational and educational purposes only and should not be construed as financial advice.

SOBNK-Q424-053

Paying off a mortgage early, if doable, seems like the smartest plan in the world. But the question remains: Should you pay off your mortgage early? Dedicating most of your money to a home loan means you may not be able to fund your business, investments, a college fund, an emergency fund, travel, or fun purchases.

There are a lot of scenarios where your money may be put to better use elsewhere.

Here’s what to consider before you decide to go all-in on paying off your mortgage early.

When Should You Pay Off Your Mortgage Early?

Sometimes paying off your mortgage early could make sense. For example:

You Have a Rainy Day Fund

You have emergency savings, the three to six months of living expenses in reserve that most experts recommend.

And your college savings plan, if that’s a need, is funded.

You’re Funding Your Retirement

You’re contributing the max to your 401(k), IRA, and other retirement accounts. If that’s not the case, you may want to do that before paying off the mortgage.

You Want to Reduce Monthly Expenses Ahead of Retirement

If a mortgage takes up a large portion of your monthly expenses, it may make sense to eliminate the mortgage payment if you know you’re going to be on a limited income soon (such as retirement).

You Want to Save on Interest Costs

Take a look at the loan you signed, or any mortgage calculator tool for that matter. On many standard 30-year loans, you will pay just as much in interest as you do in principal. Paying off a home mortgage loan early could save you a lot of money in interest over the life of a home loan.

Reasons to Hold Off on Paying Off Your Mortgage Early

If you’re in the fortunate position of contemplating paying off your mortgage early, there are a few reasons to rethink doing so.

Investment Offers Possibility of Higher Return

If investments provide a return greater than the interest rate you’re paying on your mortgage, it may not make sense to pay off your home loan right now. Remember, past performance doesn’t guarantee future returns, so you’ll want to periodically evaluate how investments are performing against your mortgage interest rate. Many investments also have better liquidity than a mortgage. However, you’ll want to make sure to consider your risk tolerance and investment objectives when deciding to invest instead of paying down your mortgage.

What about buying a rental property instead of paying off a mortgage? Purchasing investment property could generate cash flow, and adding to a real estate portfolio is one way to build generational wealth.

You Still Have High-Interest Debt

Mortgages tend to have much lower interest rates than credit cards do. If you’re a “revolver” who carries balances from one month to the next, or in a family of revolvers, paying off that debt first makes sense.

Nearly half of U.S. families report having revolving balances on one or more of their credit cards, with the average revolving family owing over $6,000, recent data shows.

How to Pay Off Your Mortgage Early

If paying off your mortgage makes sense for your financial situation, it’s helpful to know how to pay off your mortgage early. A handful of strategies may work for different types of mortgages.

Biweekly or Extra Monthly Payment

One strategy homeowners use to pay off their mortgage early is to pay biweekly. If you pay every two weeks instead of monthly ($1,000 every two weeks, for example, instead of $2,000 a month), by the end of the year you’ll have made a full extra payment. Mortgage servicers may charge fees if you do this, though.

If you want to get more aggressive, making an extra payment every month will decrease the principal quickly. You’ll want to make sure the payment is applied to principal only.

Paying a bit extra every month is one sure way to shrink total interest paid and the loan term. For a mortgage loan of $450,000 at a 5.6% fixed rate for 30 years, total interest paid would be $480,008. Putting $400 more toward the mortgage payment every month would whittle total interest paid to $329,881 — a savings of $150,127. And the mortgage would be paid off in 21 years and 10 months instead of 30 years.

Refinance to a Shorter Term

Changing a 30-year mortgage to a 15-year term with a mortgage refinance will likely result in a larger monthly payment (depending on how much you owe) but a substantial amount in interest savings.

With a shorter mortgage term, payments eat into the principal more quickly. If you stack extra payments on top of a 15-year mortgage, you’ll quickly decrease your loan balance on your way to a paid-off mortgage. Refinancing doesn’t have to happen with your current lender, so consider shopping for a mortgage to see what rate and terms you can get if you are going this route.

Recast Your Mortgage

Recasting your mortgage involves making a large lump sum payment toward the principal and having your lender reamortize the mortgage. Your monthly mortgage payment will be recalculated based on how much you owe after the large payment. The term and interest rate will stay the same.

With a recast, you don’t have to go through the application process, and the administrative fee is usually a few hundred dollars.

To decide on a mortgage recast vs. refinance, weigh the pros and cons of each.

Make Lump-Sum Payments

Making lump sum payments will go far toward paying down your mortgage. Just make sure the payments go directly toward the principal.

Get a Loan Modification

A loan modification alters the terms of your original loan to make it more affordable, which could ultimately lead to an earlier mortgage payoff date. This mortgage relief option is reserved for those experiencing financial hardship.

Changes to the terms of the mortgage are designed to potentially lower the mortgage payment so that the homeowner avoids foreclosure. Talk to your lender if you’re thinking about going this route.

Recommended: Home Loan Help Center

The Takeaway

Paying off your mortgage early is a lofty goal, but if you have other financial needs or can make a better return elsewhere, it may make sense to keep your mortgage. Make sure you consider all options before you make your decision.

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

FAQ

Do property taxes go up when you pay off your mortgage?

No. Property taxes do not change based on whether or not you’ve paid off your mortgage. If you do pay off your mortgage, it might seem like you’re paying more because you’ll pay taxes all at once or in a couple larger installments.

What happens to escrow when you pay off your mortgage?

When a mortgage is paid off, an escrow account, if one was in place, is closed. Homeowners will need to contact their property insurance company and taxing entity to have the charges sent directly to them. If there is extra money in the escrow account, it will be sent back to the homeowner when the mortgage is paid off and the escrow account is closed.

How does paying off your mortgage early affect your credit score?

Your credit score won’t be greatly affected by paying off your mortgage early. The account will remain on your credit for 10 years as a closed account in good standing.

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

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

SOHL-Q125-038

The cost to build a duplex varies widely, based on many factors. The average approaches $390,000.

Understanding the nuts and bolts of constructing a brand-new two-unit structure gives a better sense of how much it will cost to build a duplex.

Let’s define duplexes and then examine estimates for building one.

What Is a Duplex?

Duplexes come in different sizes and designs, but they have commonalities, like:

•   One building, one lot. The two units are in one building on the same piece of property.

•   Common partition. Duplex units have a shared wall or ceiling/floor. Occupants may share the yard space and a laundry room.

•   Mirrored size or layout. The two residences in a duplex are often mirror images of each other or the same size.

In general, buying a duplex will cost less than purchasing a stand-alone single-family home in the same area. And it might be cheaper to buy a duplex than build one, although you can customize new construction. Then there are people who convert a single-family home into a duplex. That could cost $80,000 on average.

Duplexes are in demand, thanks to owner-occupant financing advantages and potential rental income. They also can be found among HUD homes for sale. If you are thinking of buying an existing home loan, you may be able to finance your purchase with a home loan. If you have an existing home to leverage for funds to invest in building a duplex, a home equity line of credit (HELOC) could be a suitable financing option.

Factors That Determine the Cost of Building a Duplex

Plenty of factors influence the cost to build a duplex, with some choices stretching the budget more than others.

Location

In more desirable areas, the plot could really thicken in terms of price. Land prices in the Northeast tend to be the highest, with Rhode Island, New Jersey, and Delaware terra firma the dearest.

Materials and Labor

Depending on supply and demand, the cost of materials and labor can vary dramatically. If there’s a shortage of labor or supplies, duplex builders may pay a premium.

Building a duplex, or any property from the ground up, requires specialized labor, including these pros:

•   Architect

•   Structural engineer

•   General contractor

If the lot has a property on it, the buyer may need to pay to demolish it before building a duplex. If the lot is bare, adding utilities such as plumbing, electricity, and gas will factor into the cost of the build.

Size of the Duplex

In general, the larger the structure, the higher the cost.

The more rooms and the more complicated the layout, the higher the price.

Type of Duplex

The type of duplex a person decides to build can affect the project’s cost. Here’s how the kind of duplex can influence its price tag:

•   Stacked ($95 to $135 per square foot). Stacking the units on top of each other will typically be the least expensive build, as it’s the most efficient. Owners may be able to save on labor as the units will mirror each other and save time on plumbing.

•   One-story, side-by-side ($110 to $180 per square foot). This is likely a more complex build.

•   Two-story, side-by-side ($130 to $220 per square foot). This type of duplex is even more complex and has more square footage than the above options.

Miscellaneous Factors

Depending on the lot purchased or desired features, there could be additional costs associated with the build. Common expenses include:

•   Tearing down an existing home. If there’s a property on the lot, it can cost between $7,500 and $15,000 to tear it down.

•   Interior design. While not required, hiring an interior designer could help both spaces feel more liveable and comfortable. The average interior designer costs between $75 to $450 an hour.

•   Modular duplex. A modular duplex, meaning buying a prefabricated home, costs $100, on average, per square foot.

•   Garages. If the duplex owner wants a garage or two attached to the home, they may pay $35,000 more.

How Much Does It Cost to Build a Duplex?

With an understanding of the cost factors that can affect the budget for the duplex, now it’s time to address the big question.

Here are overall costs, then costs based on labor and square footage using up-to-date national averages.

Overall Construction Cost

These are the high-end, low-end, and national averages to build a duplex.

By comparison, building a new house of 2,500 square feet could cost $329,000. The average existing single-family home in the country sold for $402,600 in late 2024.

Labor Cost

A large portion of the budget to build a duplex will go into labor and specialized professionals. Construction workers averaged about $35 per hour in 2024, though there is wide variation by region and type of labor. The overall cost of construction labor has increased steadily for more than a decade.

Cost by Square Foot

Here’s a breakdown of average cost per square foot (including labor) for duplexes:

•   1,000 square feet: $95,000 to $220,000

•   2,000 square feet: $190,000 to $440,000

•   3,000 square feet: $295,000 to $660,000

•   4,000 square feet: $380,000 to $880,000

•   5,000 square feet: $475,000 to $1,100,000

The Takeaway

While building a duplex isn’t that different from building a single-family home, the process does include additional labor and considerations that can sway the budget dramatically. Size, style, and location can influence the cost to build a duplex.

Some people interested in building a new duplex will look for a construction loan, but if you’re a homeowner who’s eligible for a home equity line of credit, that could be a good source of funding.

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

FAQ

Is it cheaper to buy or build a duplex?

Given the price of labor and materials, it is often cheaper to buy a duplex than build one from the ground up.

How much do you have to put down to build a duplex?

A construction loan typically requires a 20% to 30% down payment. A HELOC or home equity loan could be used instead if you’re eligible.

How long does it take to build a duplex?

It takes about 12 months on average to build a two- to four-unit residential building, not counting the time it takes to obtain permits, according to the U.S. Census Bureau’s latest Survey of Construction.

Photo credit: iStock/Luckie8

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

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

SOHL-Q125-008

Mortgage life insurance, aka mortgage protection insurance, covers the balance owed on your home loan in the event of your death.

It’s meant to protect your loved ones from having to worry about monthly mortgage payments or being forced to move if they can’t continue making payments.

Whether you might need mortgage life insurance depends on your health history, whether you’re the sole earner for your family, and whether you already have a traditional life insurance policy.

How Does Mortgage Life Insurance Work?

Unlike standard life insurance, mortgage life insurance is designed to pay a death benefit (typically the mortgage balance) to the lender rather than to heirs. The lender pays off the mortgage loan. The length of the policy will be the mortgage term.

Mortgage life insurance is usually structured to match the declining balance on your mortgage and expires after your home is paid off. Depending on your age and mortgage size, the cost can be hundreds of dollars a month.

By contrast, term life insurance lasts for a set number of years and will pay a death benefit during that time to designated beneficiaries, who can use the lump sum however they want to. Term life tends to be the most affordable kind of life insurance. Note: SoFi does not offer mortgage life insurance. It does, however, offer term life insurance through a partnership with Ladder.

A term life insurance policy will charge fixed premiums for 10 to 30 years. Mortgage life insurance premiums may be fixed for only five years.

(By the way, mortgage life insurance is a totally different animal than private mortgage insurance. PMI is insurance you typically must purchase if you put less than 20% down on a conventional loan.)

Different Options for Mortgage Life Insurance

There are a few variations on how mortgage protection insurance can be structured. Here’s how the most common ones function.

Decreasing Mortgage Principal

A decreasing mortgage principal policy ties the payout benefit directly to the outstanding mortgage principal balance.

The policy payout will automatically account for the declining balance as you pay off your home loan over time, along with any extra payments you make.

This is the most common type of mortgage insurance policy.

Level

A level payout policy keeps the death benefit at the same amount over the term of the mortgage loan, no matter how much has been paid off. This means that any payments or prepayments of principal have no effect on the death benefit.

Because these mortgage insurance policies are structured more like traditional life insurance policies, they sometimes allow for the direct payout of excess benefits to beneficiaries.

Recommended: Home Loan Help Center

Mortgage Life Insurance Advantages

If you’re the sole breadwinner for your family, you might want to consider upsides of mortgage life insurance.

No Medical Exam

Unlike traditional life insurance, mortgage life insurance sellers don’t require a medical exam. This can help people qualify for mortgage life insurance when they might be rejected for traditional life insurance or find the quoted premiums too high.

You Can Add Riders

Home mortgage life insurance policies often allow you to tack on riders. A living benefits rider will allow you to directly access your policy’s benefits as a source of funds in the event you’re diagnosed with a terminal illness. This can be especially helpful when health insurance might fall short.

Another common add-on is a “return of premium” rider, which calls for returning a set amount of premiums paid if the policy ends without ever being used.

Some of these riders are also available for term life insurance policies.

Mortgage Life Insurance Drawbacks

If you’re in good health or prefer benefit payouts with no strings attached, you may want to give thought to some drawbacks of mortgage life insurance.

Expensive for Healthy Homeowners

Individuals who are in good health won’t be able to benefit from a cheaper rate on their mortgage life insurance policy. That’s because insurers do not factor medical exams into their premium calculation.

The lack of a medical exam means insurers must cover all their bases: People with a poor health history and those in good health will pay the same rates.

Decreasing Payout

While your monthly mortgage life insurance premiums will remain constant, the potential payout benefit will continue to decrease as you pay down your mortgage over time.

If there’s no mortgage left, there’s no payoff. Ouch.

The only way around this is to apply for a mortgage insurance policy with a level payout benefit, which ensures that the payout remains the same regardless of how much time is left on your mortgage. This may be more expensive than a typical decreasing mortgage balance policy.

No Flexibility

Mortgage life insurance policies pay out to the mortgage lender. Your loved ones won’t see any cash during this transaction, which isn’t ideal if you’d like them to have the money for other purposes like day-to-day living costs, college costs, or investing.

If flexibility of use for any benefit payout is important, you may be better served by traditional life insurance.

Difficult to Get Quotes

It’s hard to gather quotes for mortgage life insurance online, unlike other kinds of insurance. That’s a concern because prices can vary widely.

Recommended: How to Shop for a Mortgage

Is Mortgage Life Insurance a Good Idea?

Unless you’re having difficulty qualifying for a reasonable rate on a traditional life insurance policy because of poor health, term life insurance is likely to have lower premiums than mortgage life insurance and will provide a direct payout to beneficiaries.

For some homeowners, the benefit payout to the lender, not heirs, will be a dealbreaker. Others may be willing to accept this restriction because they either have health conditions that make it difficult to qualify for traditional life insurance or because they want to ensure that the payout is dedicated toward housing payments or, in a sense, mortgage relief.

You also may want to learn about putting your house in a trust, to protect your home if you become incapacitated and to avoid the probate process.

Note: SoFi does not offer mortgage life insurance. It does, however, offer term life insurance through a partnership with Ladder.

The Takeaway

Mortgage life insurance ensures that your mortgage will be paid off if you die. If mortgage protection insurance isn’t your cup of tea, it could be worth looking into term life insurance to protect your loved ones. And if you’re just starting out as a homeowner, due your research to find a home loan at the best possible rate and terms.

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

FAQ

Does mortgage life insurance pay off the mortgage?

Yes. Mortgage life insurance offers enough coverage to pay off your mortgage if you were to die.

Is mortgage life insurance the same thing as mortgage protection insurance?

Yes. Most policies only pay out when the policyholder dies, but a few also cover a post-accident disability or a temporary job loss.

When is mortgage life insurance a good idea?

Mortgage life insurance could be a good idea for homeowners whose health conditions keep them from qualifying for term life insurance.

Photo credit: iStock/Inside Creative House

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

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

SOHL-Q125-029

When looking for a property to buy, you might consider a single-family detached home, a townhouse, a condo, a co-op apartment, or something else.

Let’s look at the pros and cons of buying a townhouse vs. a condo.

What Is a Townhouse?

At first glance, a townhouse might look like a typical house, but a closer look will show that it’s attached to at least one similar unit.

Townhouses are often found in urban areas where space is at a premium. They often come with a front or back yard. Owners own the inside and outside of their unit and the land it sits on.

The townhome community may have a homeowners association (HOA) and maintenance fees. You’ll want to make sure you understand the costs of the HOA and its rules before signing a contract and getting a home mortgage loan.

Benefits of Buying a Townhouse

There are at least three upsides to purchasing a townhouse.

Owner Rights

Because people who buy a townhouse own the land it’s on, they have more freedom in how to use the yard. A yard or patio can open possibilities for a grilling spot or dog or child play area.

They also have at least some freedom of choice about the appearance of the inside and outside of the structure, although HOAs may have rules about all of the above.

Price

In communities with high home prices, townhouses may be an affordable alternative for first-time homebuyers.

House hunters from millennial homebuyers to empty-nesters may also find a townhouse a sweet spot between a condo and a traditional detached home with yard.

Plus, because lots tend to be smaller than ones with detached homes on them, property taxes are usually lower as well.

Low Maintenance

Smaller yards mean less yardwork, ideal for busy people and those who are downsizing their home and responsibilities.

The townhouse complex may be gated and have security, and some have pools, gyms, and other shared recreational spaces whose maintenance is covered by homeowner fees.

Disadvantages of Buying a Townhouse

When you think of townhouse living, keep in mind the close quarters with neighbors and possible HOA fees and rules.

HOA

Townhouse communities are less likely to have an HOA than condominiums are, but if they do, the resident-led board will collect ongoing fees to cover common areas and any community perks such as a pool. The HOA will also enforce community rules.

Lack of Privacy

Because of the shared walls, a townhouse provides less privacy than a detached home (although it may offer more privacy than many condo buildings, where you may have a unit above and below yours). Townhouse living may therefore create some challenges for families with young children.

What Is an Apartment?

An apartment is a room or set of rooms within a building. In major cities, some people refer to buying a condo or co-op shares as buying an apartment.

Condo owners own everything within their unit and have an interest in the common elements. “Buying a co-op apartment” really means holding shares in the housing cooperative that owns the property.

Then there are people and companies that buy a multifamily property like an apartment building and rent out the units. An owner could decide to live in one of the units and serve as an on-site landlord.

Benefits of Living in an Apartment

Let’s look at some benefits of buying a condo or a co-op.

Low Maintenance

You won’t typically need to make many repairs, mow the grass, or paint. That’s covered by the monthly or quarterly fees you’ll pay.

Low Utilities

First, condos tend to be smaller than single-family homes, which can reduce the cost of heating and cooling the space, and take less electricity to keep it well lit.

HOA

If the building has an HOA (which may be called a condo or co-op association), the association will take care of property maintenance and enforcement of rules.

Disadvantages of Living in an Apartment

Apartment life can come with disadvantages, too. Here are a few.

Parking

You may or may not have a parking space set aside for you, and street parking isn’t always a given in busy locales. Even if you have a parking spot, if people come to visit, they may not easily find anywhere to park.

Noisy or Nosy Neighbors

If you appreciate quiet calmness, you may not find all you’d like in condo living. Neighbors are nearby and they can be noisy. If you’re in a crowded city, surrounding events can contribute to the jostling and noise.

Limited Space

If you’re used to living in a house, you could find a more compact apartment to be challenging as you try to fit in your belongings. Plus, apartments often lack yard space or a patio, which further limits the amount of space you have to use and enjoy.

Differences Between a Townhouse and an Apartment

When comparing apartment or condo vs. townhouse, keep in mind these differences.

The Takeaway

Buying a townhouse or an apartment can give you many of the pleasures of homeownership with less of the associated upkeep. But there are unique qualities to each and potential downsides, too. Make sure you understand the role a homeowner’s association might play in any property you purchase before you make an offer and nail down your financing.

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

FAQ

Do townhomes appreciate as much as houses?

In general, townhomes do not appreciate as quickly as single-family detached homes, thanks to the amount of land that comes with traditional stand-alone homes.

Are townhouses a bad investment?

In some circumstances, a townhouse may be a good investment. The price, current market conditions, and location are factors.

Are fees higher for a townhouse or condo?

Condo HOA dues are typically a lot higher than townhouse fees (if the townhouse community even has an HOA). Condo communities usually have many more amenities to maintain.

Photo credit: iStock/Auseklis

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