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Filing for bankruptcy is a tactic often used to erase large amounts of debt, but nondischargeable debts can prevent that clean slate.

Certain kinds of debt, including child support, student loans, and some tax bills, typically survive a bankruptcy filing.

Some 403,000 Americans filed for bankruptcy in the 12-month period ending March 31, 2023. For one reason or another they found themselves in debt situations complex enough to seek bankruptcy as a means of relief.

Though on the surface bankruptcy may appear to produce an opportunity for a fresh start, nondischargeable debts prevent it from being a true end-all solution.

What Does Nondischargeable Debt Include?

Nondischargeable debts can include home mortgages, certain taxes, child support, and student loans, and can vary based on the chapter of bankruptcy filed.

A debt may also be considered nondischargeable if a creditor formally objects to a discharge in court and wins.

When a debt is discharged through bankruptcy, the debtor is relieved of any legal obligation to pay it back, and the creditor is prevented from taking any further action to collect that debt. This includes contacting the debtor or filing a lawsuit.

Personal loans, credit card debt, and medical bills are types of debt generally considered dischargeable.

Nondischargeable debt, on the other hand, does not dissolve in a bankruptcy filing. The debtor remains liable for payment even after the filing is complete. These are types of debt that Congress has deemed unforgivable due to public policy.


💡 Quick Tip: A low-interest personal loan from SoFi can help you consolidate your debts, lower your monthly payments, and get you out of debt sooner.

Types of Nondischargeable Debt

Nineteen categories of nondischargeable debt apply for Chapters 7, 11, and 12 of the Bankruptcy Code. (A more limited list of exceptions applies to cases under Chapter 13.)

Except in unique circumstances, if a debt falls under one of these categories, it is not considered dischargeable.

1. Debt incurred from U.S. taxes or a customs duty.

2. Debt for money, property, or services obtained fraudulently or under false pretenses.

3. Any debt excluded from bankruptcy filing paperwork (unless the missing creditor received prior notice and had ample time to respond to the filing).

4. Debt acquired due to fraud, larceny, or embezzlement while working as a fiduciary.

5. Debt contracted for a domestic support obligation, including child support and alimony.

6. Debt from intentionally harming another person or their property.

7. Tax debt as a result of a fine, penalty or forfeiture that is, at minimum, 3 years old.

8. Student loan debt (unless not discharging the debt would impose an “undue hardship”).

9. Debt incurred due to the death or injury of someone caused by the debtor while operating a vehicle, vessel, or aircraft while intoxicated.

10. Any debts that were or could have been listed in a prior bankruptcy filing, and the debtor waived or was denied a discharge.

11. Debt obtained by committing fraud or misappropriating funds while acting as a fiduciary at a bank or credit union.

12. Debt incurred for the malicious or reckless failure of a debtor to fulfill any commitment to a federal depository.

13. Debts for any orders of restitution.

14. Debt incurred by penalty in relation to U.S. taxes.

15. Any debt to a spouse, former spouse, or child that is incurred through a separation or divorce.

16. Debts incurred due to condominium ownership or homeowners association fees.

17. Legal fees imposed on a prisoner by a court for costs and expenses related to a filing.

18. Debts owed to a pension, profit-sharing, stock bonus, or another retirement plan, as well as any loans taken from an individual retirement annuity.

19. Debt obtained for violating federal or state securities laws, common law, or deceit and manipulation in connection with the purchase or sale of any security.

Recommended: Understanding Bankruptcy: Is it Ever the Right Option?

How Will Nondischargeable Debt Affect Me?

Nondischargeable debt is just like any other debt in the sense that it must be paid off on time to avoid negative consequences.

If a debt is left unpaid for too long, the creditor may sell the debt to a collection agency, which then may result in any number of the following repercussions:

•   Significantly lowering a credit score

•   Flagging a borrower as “high risk” to future lenders

•   Decreasing the odds of approval for future credit offerings

•   Increasing high-interest rate offers with less favorable terms

•   Adding negative remarks to your credit history

•   Activating a lien against a property or asset

•   Prompting creditors to pursue legal action

•   Enacting wage or asset garnishment

💡 Quick Tip: With low interest rates compared to credit cards, a personal loan for credit card consolidation can substantially lower your payments.

How Can I Resolve Nondischargeable Debts?

Making plans to resolve any outstanding debts as soon as possible is key to managing a credit history and salvaging future credit opportunities. Here are a few strategies to consider for paying off debts.

Stop Using Credit

The first step toward debt resolution is to stop collecting it.

The average American consumer has 3.84 credit cards, and the average balance is $5,910 in 2022, according to data from Experian.

Making a point not to purchase anything that can’t be bought with cash outright can help curb unnecessary expenses. This includes larger purchases that may require financing. Leaving credit cards at home and removing their information from online payment systems can also help remove the temptation of using them.

Create a Budget

According to a 2022 Debt.com survey, 85% of Americans said making a budget helped them get out of or stay out of debt.

A monthly plan including income and expenses can help reveal where extra money might be coming in and where you can cut back on unnecessary spending. A plan will provide a holistic view of spending habits, allowing for larger decisions to be made about how to change habits in order to fit new, debt-focused priorities.

Cutting back on expenses and carefully tracking spending can help reveal extra dollars and cents needed to pay down debts.

Start a Part-Time Job

When paying down debt is a top priority, taking on another job or picking up additional hours at your current one can be extremely helpful.

An extra check here and there can provide funds to make additional payments on debts, helping to dissolve them more quickly. Consider options such as working weekends at a local coffee shop, picking up a temporary gig in food delivery, or freelancing for additional income.

Recommended: 19 Jobs That Pay Daily

Consolidate Debt

Applying for a personal loan is a strategy for managing several debts simultaneously. Though it may seem counterintuitive to take on another loan, a personal loan can be used to pay off multiple existing lines of credit, such as credit cards, and consolidate them into one loan with a single monthly payment and, possibly, a lower interest rate.

In addition to comparing rates, it’s important to make sure you understand how a new loan could benefit you in the long run. For instance, if your monthly payment is lower because the loan term is longer, it might not be a good strategy, because it means you may be making more interest payments and therefore paying more over the life of the loan.

However, a debt consolidation loan could help streamline payments and ease the anxiety that comes with being responsible for managing numerous lines of credit.

The Takeaway

Nondischargeable debts require more than bankruptcy to be resolved, and without proper management, they could worsen your current financial situation. Like any other debt, nondischargeable debt must be paid off on time in order to avoid negative repercussions. Creating a plan to handle outstanding debts as soon as possible is a smart choice.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

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.

There’s a lot that goes into making homes safe and comfortable. After plumbing and electric, many homes in warm and cold climates alike have heating, ventilation, and air conditioning (HVAC) systems to regulate temperature and air quality.

Installing or updating HVAC systems typically requires ductwork to effectively move air from the system to vents throughout a home or building. There are several factors that impact the cost of HVAC ductwork, including the size and layout of a home, materials used, and type of system.

This guide will give you the basics of how HVAC ductwork operates and key cost considerations.

What Is Ductwork?

In the broadest sense, ductwork can be defined as the channels used for transferring heated and/or cooled air through the rooms and zones of a home or building.

In many cases, HVAC systems need separate supply and return ducts to circulate, filter, and treat air continuously. Supply ducts bring air from the furnace, geothermal pump, or other type of system to blowers and vents to heat or cool an area. On the flipside, return ducts transport untreated air back to the HVAC system.

Some of the most common HVAC systems that need ductwork include:

•   Geothermal or ground source heating and cooling

•   Central air conditioning

•   Furnaces

•   Central gas heating

Between these different systems and a home’s unique characteristics, ductwork can be handled in a variety of ways.

Recommended: How to Winterize a House

Installing New Ductwork

Figuring out how to install ductwork varies in complexity and cost between new construction and finished and furnished homes.

Additional steps that may be necessary for a finished home, such as cutting holes in existing walls, ceilings, and floors, may likely drive up the price of labor and require more materials and time for installation. Depending on where the system is placed, ducts may be run through closets, attics, basements, or up stairwells.

Since different homes require different amounts of ductwork, it’s helpful to think of cost on a linear foot basis. New ductwork can cost about $40 to $65 per linear foot, with the variation coming down to costs for materials and labor.

On average, retrofitting an existing home without ducts can run $2,400 to $6,600.

If you’re building a new home, including plans for HVAC ductwork from the getgo could reduce the overall installation cost. For starters, it would bypass the need to retroactively cut holes throughout a home for ducts and vents.

Additionally, it may be easier to design systems that utilize fewer linear feet since ductwork can be installed before walls and floors are completed.

Replacing Ductwork

If your home is already fitted with ductwork, replacing a portion of it or the entire system might be necessary due to leaks, cracks, or reduced efficiency over time. Since ducts are usually kept out of sight behind walls and ceilings or in attics and basements, accessibility is a key factor in repairing a system.

The replacement process involves both removing the existing materials and installing new ductwork. Replacing ductwork can cost from $25 to $55 per linear foot depending on the location of the existing system and choice of materials for the new ductwork.

Replacing ductwork in a home between 2,000 and 2,500 square feet can run $2,800 to $5,600; for a 3,000 to 3,500 square foot home, it can ring up between $4,200 and $7,800.

Exposed ductwork can be easier for you to reach and replace on your own, but a professional contractor may be necessary for more complicated repairs and getting to concealed HVAC systems.

Additionally, a skilled professional could likely complete the job in less time than a DIYer might, and time may be a more pressing factor than money in the middle of a cold snap or during a heatwave.

The U.S. Environmental Protection Agency’s EnergyStar program recommends getting quotes from contractors with North American Technical Excellence (NATE) or Building Performance Institute (BPI) certification to get the job done right on the first try.

Recommended: The Cost of Buying a Fixer-Upper

Ductwork Materials

There are several types of materials to consider when planning how to install ductwork in a home. Broadly speaking, ductwork can be categorized as flexible or rigid, with options for materials within each category. Each comes with tradeoffs in terms of price, lifespan, efficiency, and flexibility.

Flexible Ductwork

True to its name, flexible ductwork is characterized by its ability to bend, which can come in handy when installing inside tight and tricky spaces.

In most cases, aluminum or non-metallic materials like plastic, polyester, and PVC are used for flexible ductwork. Let’s take a look at how they compare.

Flexible Aluminum: Costs between $4 to $7 per linear foot (excluding labor).

Pros:

•   Ideal for installing in hard-to-reach places

•   Longer lifespan than non-metallic flexible ductwork

•   Generally cheaper than rigid ductwork

Cons:

•   Poor energy efficiency without added insulation and sealing

•   Needs to be reinforced to minimize kinks and bends to improve airflow and efficiency

Flexible Polyester: Costs between $1 to $5 per linear (excluding labor)

Pros:

•   Useful for compact spaces

•   Generally one of the cheapest options

•   Resistant to mold and rust

Cons:

•   Prone to tearing and less durable than flexible aluminum

•   Needs to be reinforced to minimize kinks and bends to preserve airflow and efficiency

Rigid Ductwork

Rigid ductwork can be made from several materials, such as fiberglass and galvanized steel or aluminum. These options can also vary in shape (e.g., cylindrical or rectangular) and size. Additionally, there are differences in cost and features for each type of rigid ductwork.

Sheet Metal Ductwork: Made from galvanized steel or aluminum, these materials usually cost anywhere from $8 to $15 per linear foot.

Pros:

•   Greater durability than other materials

•   Can produce less noise than flexible ductwork

•   Less susceptible to mold and mildew

Cons:

•   Difficult to install if there isn’t space for long, straight lines of ductwork

•   Adding insulation may be required for greater energy efficiency

•   More expensive than flexible ductwork

Fiberglass Duct Board: Consisting of metal ductwork lined with fiberglass, this option costs between $5 and $10 on average.

Pros:

•   Built-in insulation improves energy efficiency and temperature control

•   Easy to cut and seal

•   Well suited for installing between a building’s rafters or floor joists

Cons:

•   Over time, they can release fiberglass particles into the air and be susceptible to mold and mildew

•   Can be difficult to clean

•   Often the most expensive option per linear foot

Recommended: Strategies to Lower Your Energy Bill When Working From Home

Sealing and Insulation

Depending on the structure of a home, the type of HVAC system, and other factors, sealing and insulating ductwork may be necessary for health and safety concerns. It might also improve the efficiency of a system, thus potentially lowering your energy use, and may help pay for itself through lower utility bills.

If combustion is involved in your HVAC system, which is generally the case for furnaces and central gas heating, harmful gases like carbon monoxide are generated in the process. Sealing ductwork can further safeguard that such gases are not circulated into the living space of home instead of being emitted outside.

While professional contractors are recommended for sophisticated ductwork insulation and sealing jobs, homeowners may choose to take a DIY approach to sealing near vents and other ductwork connection points with metal tape. These locations, especially vents, can be more accessible and are more common locations for leaks.

How Often Should Ductwork Be Replaced?

While we may immediately notice when the power goes out or the plumbing is backed up, it’s harder to tell if we’re getting the most out of a heating and cooling system.

Maintenance and cleaning can help extend the lifespan of ductwork and heating and cooling systems, but a time will come when replacement is a safer and more financially sound choice.

Erring on the side of caution, you may want to have a heat pump or air conditioner (including ductwork) replaced if it’s more than 10 years old. For a furnace, the estimated lifespan is around 15 years.

To keep your ductwork in tiptop shape, there are some maintenance tasks, like changing air filters monthly, that can be done on a DIY basis. More complex procedures, such as cleaning blowers, checking electrical connections, and lubricating mechanical parts, may be better handled by a professional contractor.

Having a maintenance checklist handy can be helpful for staying on top of your cleaning and maintenance schedule, as well as making sure a contractor checks all the boxes when inspecting your HVAC system.

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

The Takeaway

Whether saving ahead or responding to a sudden home repair cost, there are options available for paying for HVAC ductwork.

Installing energy-efficient heating and air conditioning systems may qualify for a residential energy property tax credit. Additionally, some states and utilities offer incentives and rebates.

Although helpful, these incentives and tax credits still leave a portion of the cost to the homeowner. It can sometimes be difficult to save for potentially pricey repairs like these if a budget is already stretched thin.

One financing option you might consider is an unsecured home improvement loan. This is a personal loan designed to be used for home upgrades and repairs, and typically comes with a fixed interest rate, set term, and regular monthly payments. Unlike a home equity loan or line of credit, personal don’t require you to have equity in your home or use your home as collateral.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

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.

Is your bedroom cluttered, depressing, and lacking warmth and coziness? If so, perhaps it’s time for a bedroom remodel, an awakening of a room that can range from paint to structural changes.

If you’re a homeowner looking to spice up or calm down your bedroom, know that bedroom remodels can have a return on investment of 40% to 80%, according to HGTV.

The steps you can take to renovate rooms aren’t too onerous and can often be done without the help of a contractor or other professional. Let’s take a look at the cost to remodel a bedroom, bedroom remodel ideas, and how to pay for a bedroom remodel.

How Much Does It Cost to Remodel a Bedroom?

The amount of money you put into a bedroom remodel depends on what you’re trying to achieve. Do you simply want to change up your décor, including your bed, bedside tables, and desk? Or do you want to paint the room a different color and add some window treatments?

You may also be looking at more extensive changes, such as ripping up carpeting and putting in new flooring, installing new windows, or building custom cabinetry in your closet.

The good news is that most bedroom remodels are less costly than renovations that entail taking down walls, rewiring electrical systems, and installing pipes, though some bedroom remodels may call for these types of tasks.

With a bedroom remodel, you’re less likely to be doing major construction that requires hiring licensed professionals like a carpenter, plumber, or general contractor. And even if you have to rely on the services of a vendor, there are likely other aspects of the project you can tackle yourself.

Recommended: The Top Home Improvements to Increase Your Home’s Value

Simple Bedroom Remodel Ideas

Decluttering is a tried-and-true way to visually open up a room. That means organizing books and magazines, laundry or piles of clothes, and furniture. Here are some other ways.

Painting

House-paint companies boomed during the pandemic, ARTnews pointed out. Gray — all 50 shades — were out. Warm tones and deeply saturated color were in.

Some of the major brands and independent companies offer online color consultations. And then, if you feel up to the task, you can avoid hiring a painter by painting your walls yourself.

You’ll want to take stock of the current trim and match a color to it. You’ll also want to consider how the room changes color depending on the time of day. Sometimes a room that looks white in the evening can take on a yellowish tint during the light of day.

You’ll want to make sure you have all the equipment you need to get the work done efficiently and well. This includes paintbrushes, a paint roller and pan, rags, sandpaper, and drop cloths.

The great thing about paint is, if you feel you’ve done a poor job in spots, you can always paint over it.

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

Flooring

What you do with your floors is going to depend largely on personal taste. Your choices include wall-to-wall carpeting, wood or wood-engineered flooring with or without area rugs, and tile or ceramic flooring, which works best in humid climates.

You’ll want to think about how your flooring will complement the rest of the room, including furniture. You’ll also want to take your comfort into consideration. Carpeting, for example, muffles sound, while wood flooring does not.

Some people don’t like walking barefoot on anything besides carpet, for example, while others prefer the look of bare floors.

Cost may also come into play here as wood flooring is generally more expensive than carpeting, topping at $14 per square foot. Carpeting typically runs upward of $11 a square foot, HomeAdvisor notes.

Furnishings

While some homeowners may want to keep the bedroom furniture they’re currently using, others choose to sell or donate what they have and start over.

If you’re in the latter group, you’ll want to consider the paint and flooring you’ve chosen when looking for a new bed and headboard, bedside tables, desk, and dresser.

Looking online for bedroom remodel ideas can be a low-cost way to design your bedroom décor, with many blogs and websites linking to online retailers for easy purchase.

Social media sites like Houzz and Pinterest have scores of photos and boards delineated by room, color, and style to help you brainstorm.

If your budget allows, this might be an area to bring in the help of an interior designer. An interior designer may be able to see things you don’t, such as whether you need a large desk for working from home, a bench at the end of the bed for sitting, or a changing table if you plan to grow your family in the near future.

More Extensive, and Expensive, Bedroom Remodels

While bedroom remodels are typically less wide-ranging than those of a kitchen or bathroom remodel, you may opt for larger changes that can drive up your cost.

These include altering the function and structural design of a room, which may require the use of a professional.


💡 Quick Tip: Compared to credit cards and other unsecured loans, you can usually get a lower interest rate with a cash-out refinance loan.

Structural Changes

If you own a home or are looking to buy, the lack of an ensuite bathroom might be a big deal. Maybe you’d like to be able to pad into the bathroom in the middle of the night without tiptoeing through the hallway.

Depending on the layout of the bedroom and the rooms near it, this may necessitate turning a closet into a bathroom or building a door through a wall that conjoins your bedroom with that hallway bathroom.

Either way, you’re probably looking at hiring a plumber, carpenter, electrician, and contractor. While this type of remodeling affords you more options than sticking with your current footprint, it comes with added costs to be aware of.

Lighting and Fans

Adding recessed lights requires the work of a licensed electrician, who may have to work around obstacles like heating ducts, and will charge for both installing and wiring each light.

Ceiling fans, while pretty and useful, will likely also require hiring a professional installer to burrow through your ceiling, connect to electricity, and complete the necessary patchwork afterward.

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

Paying for It

Having a budget and payment plan is key, no matter the size of your bedroom remodel. Some changes are so small that homeowners can pay upfront.

Those with more extensive remodels might use a home equity loan or home improvement loan.

The Takeaway

A bedroom remodel can be a fun project from start to finish. After all, we spend a lot of time in our personal spaces, so it’s an opportunity to renovate a room to your exact specifications.

A home improvement loan could be just the ticket for a bedroom remodel.

Or if you’re a house hunter and have your eye on a home with bedrooms that could use some invigoration, know that SoFi offers home loans and mortgage refinancing.

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

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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

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Whether your living room is dated, too cramped, or no longer functional for your family, there are makeover options for every taste and budget. Also keep in mind that living room makeovers can happen in various stages — they don’t have to be all or nothing. Even, simple, affordable updates like new lighting, paint, or flooring, can have a big impact on the look and feel of a living room.

Whether you have the budget for a total overhaul or you’re just looking for an easy update, here are some living room remodel ideas to consider.

Living Room Remodel Ideas: Top Elements To Change

Layout

Effective use of space makes a room feel comfortable and inviting. If your living room seems underused, perhaps changing the layout will make family and friends want to hang out in it more often.

For someone moving into a new home and starting with a blank space, looking first at the layout of the room is a good starting point. Where do you enter the room? Where does your focus go first? Are the windows situated for convenient placement of furnishings?

If you’re currently living in the home, but the living room just isn’t functional, look at the layout in terms of what can be easily changed.

What in the room do you regularly use, e.g., couch or closets? Where do piles tend to accumulate? Do the windows cause a glare on the television? Is your furniture arranged to allow for good traffic flow? The more effortlessly the room setup can support your daily movements, the better.

Recommended: Home Equity Loans vs Personal Loans for Home Improvement

Windows

Windows not only let light in, they affect our perception of how large, open, and welcoming a space is. Replacing them can be pricey, but might increase a home’s value and can generate energy savings: On average, 25% to 30% of a home’s energy use is due to heat gained or lost through the windows.

If the window itself is fine but the aesthetic is not, new window trim or window treatments can make a world of difference. Painting dark-stained trim can make a space feel lighter, brighter, and more modern.

Updating window treatments with floor-length curtains adds drama and interest, while Roman shades that fit inside the window casing keep things unobtrusive while still adding texture.

Recommended: How Much Does It Cost to Replace Windows?

Lighting

Lighting is functional, of course, but it can also be an aesthetic choice. Think about taking a picture indoors with or without a flash: Room lighting has that same sort of visual resonance, affecting how the other elements of the room appear and how you feel in the space.

In choosing lighting for your living room remodel, consider if you want the fixture to recede out of sight or be a visual focal point. How bright or dim, warm or cool do you want your light levels? Where in the room will you need the most light? And adding dimmer switches to any lighting setup gives you loads of control.

Ceiling

Like the sky outside, what’s hanging above our heads indoors dramatically affects how we feel in a space. If you have a textured or popcorn ceiling, refinishing it to be smooth can instantly brighten and update your living room. It’s a messy DIY project, but one experienced painters or contractors can do while keeping the mess to a minimum.

If the ceiling would benefit from a new coat of paint, veering from the standard white might give the room a stylish quality. Light hues can create the illusion of a taller space, while something a little darker can evoke coziness.

Recommended: Beginner’s Guide to a Bedroom Remodel

Flooring

Along with layout and paint, flooring has perhaps the biggest impact on a room. It’s a large, dominant, visual element that affects how sound echoes in the room or carries beyond it, how much light reflects into the room, and how much dirt shows up.

When buying a new home, it’s a good idea to check what’s under the carpet. You might find lovely hardwood floors in pristine condition — or a mess of a subfloor. Knowing what you will have before signing the mortgage agreement will allow you to make a plan for any needed renovations. For a quick change, don’t underestimate a simple area rug.

Recommended: Four Ways to Upgrade Your Home

Molding

Molding hits the sweet spot of a decorative finish that feels structural. The trim around windows and doors, crown molding and baseboards, picture and knee rails — all inform the character of a space and add visual interest and structure. In particular, if things feel blank or sterile, adding decorative trim can make a space a little more impressive.

Paint

Fresh paint works wonders. Even if you don’t have time or budget for anything else, reimagine the wall color. Samples painted on the wall will show how the room’s light will affect the paint. Many paint brands now also offer virtual ways to “paint” your room.

Just as a room’s lighting can affect your mood, paint color has an effect on one’s psyche, too. For instance, the color blue has been shown to have a calming effect, while red has a stimulating effect and can create feelings of excitement or even stress in some people.

Furniture and Decoration

You can replace it, move it, or just pull it from another room. Alone or in conjunction with other major changes, furniture and decor can have a major effect on the finished space — and keeping layout top-of-mind when selecting furniture will help make sure it’s the right stuff for the space.

Using online room planners or going old school with graph paper to map out, to scale, what will go where is a good way to experiment without the heavy lifting.

What Color Should You Paint Your House Quiz

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

The Takeaway

Once you decide on the changes you’d like to make to your living room, the next step is to come up with a budget for the project. Some changes, like moving furniture from one room to another are free, while others, like changing a paint color, can probably be done inexpensively. But if you’re planning a significant renovation to your living room, additional funding might be necessary.

One financing option that can work well for a living room remodel is a home improvement loan. This is simply a personal loan that is used for home repairs and upgrades. With this type of funding, you receive a lump sum up front then repay the loan (plus interest) in regular installments over the loan’s term, often five to seven years.

SoFi’s home improvement loans range from $5K to $100K and offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

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.

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If you are planning on applying for a home loan or for a mortgage refinance, you are likely going to want to know your loan-to-value (LTV) ratio. This is calculated by dividing the loan principal by the value of the property. It’s an important metric when getting a mortgage approved because it reflects how much of the property’s value you are borrowing. A higher number may be seen as a riskier proposition by prospective lenders.

Here, you’ll learn the ins and outs of calculating LTV, why it matters, and how it can have a financial impact over the life of a loan.

LTV, a Pertinent Percentage

The relationship between the loan amount and the value of the asset securing that loan constitutes LTV.

To find the loan-to-value ratio, divide the loan amount (aka the loan principal) by the value of the property.

LTV = (Loan Value / Property Value) x 100

Here’s an example: Say you want to buy a $200,000 home. You have $20,000 set aside as a down payment and need to take out a $180,000 mortgage. So here’s what your LTV calculation looks like:

180,000 / 200,000 = 0.9 or 90%

Here’s another example: You want to refinance your mortgage (which means getting a new home loan, hopefully at a lower interest rate). Your home is valued at $350,000, and your mortgage balance is $220,000.

220,000 / 350,000 = 0.628 or 63%

As the LTV percentage increases, the risk to the lender increases.

Why Does LTV Matter?

Two major components of a mortgage loan can be affected by LTV: the interest rate and private mortgage insurance (PMI).

Interest Rate

LTV, in conjunction with your income, financial history, and credit score, is a major factor in determining how much a loan will cost.

When a lender writes a loan that is close to the value of the property, the perceived risk of default is higher because the borrower has little equity built up and therefore little to lose.

Should the property go into foreclosure, the lender may be unable to recoup the money it lent. Because of this, lenders prefer borrowers with lower LTVs and will often reward them with better interest rates.

Though a 20% down payment is not essential for loan approval, someone with an 80% LTV or lower is likely to get a more competitive rate than a similar borrower with a 90% LTV.

The same goes for a refinance or home equity line of credit: If you have 20% equity in your home, or at least 80% LTV, you’re more likely to get a better rate.

If you’ve ever run the numbers on mortgage loans, you know that a rate difference of 1% could amount to thousands of dollars paid in interest over the life of the loan.

Let’s look at an example, where two people are applying for loans on identical $300,000 properties.

Person One, Barb:

•  Puts 20%, or $60,000, down, so their LTV is 80%. (240,000 / 300,000 = 80%)

•  Gets approved for a 4.5% interest rate on a 30-year fixed-rate mortgage

•  Will pay $197,778 in interest over the life of the loan

Person Two, Bill:

•  Puts 10%, or $30,000, down, so their LTV is 90%. (270,000 / 300,000 = 90%)

•  Gets approved for a 5.5% interest rate on a 30-year fixed-rate mortgage

•  Will pay $281,891 in interest over the life of the loan

Bill will pay $84,113 more in interest than Barb, though it is true that Bill also has a larger loan and pays more in interest because of that.

So let’s compare apples to apples: Let’s assume that Bill is also putting $60,000 down and taking out a $240,000 loan, but that loan interest rate remains at 5.5%. Now, Bill pays $250,571 in interest;

The 1% difference in interest rates means Bill will pay nearly $53,000 more over the life of the loan than Barb will. (It’s worth noting that there are costs when you refinance a mortgage; it’s a new loan, with closing expenses.)

💡 Quick Tip: You deserve a more zen mortgage loan. When you buy a home, SoFi offers a guarantee that your loan will close on time. Backed by a $5,000 credit.‡

PMI or Private Mortgage Insurance

Your LTV ratio also determines whether you’ll be required to pay for private mortgage insurance, or PMI. PMI helps protect your lender in the event that your house is foreclosed on and the lender assumes a loss in the process.

Your lender will charge you for PMI until your LTV reaches 78% (by law, if payments are current) or 80% (by request).

PMI can be a substantial added cost, typically ranging anywhere from 0.1% to 2% of the value of the loan per year. Using our example from above, a $270,000 loan at 5.5% with a 1% PMI rate translates to $225 per month for PMI, or about $18,800 in PMI paid until 20% equity is reached.

Recommended: Understanding the Different Types of Mortgage Loans

How Does LTV Change?

LTV changes when either the value of the property or the value of the loan changes.

If you’re a homeowner, the value of your property fluctuates with evolving market pressures. If you thought the value of your property increased significantly since your last home appraisal, you could have another appraisal done to document this. You could also potentially increase your home value through remodels or additions.

The balance of your loan should decrease over time as you make monthly mortgage payments, and this will lower your LTV. If you made a large payment toward your mortgage, that would significantly lower your LTV.

Whether through an increase in your property value or by reducing the loan, decreasing your LTV provides you with at least two possible money-saving options: the removal of PMI and/or refinancing to a lower rate.

💡 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.

The Takeaway

The loan-to-value ratio affects two big components of a mortgage loan: the interest rate and private mortgage insurance. A lower LTV percentage typically translates into more borrower benefits and less money spent over the life of the loan.

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

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will give you a credit toward closing costs or additional expenses caused by the delay in closing of up to $10,000.^ The following terms and conditions apply. This Guarantee is available only for loan applications submitted after 04/01/2024. Please discuss terms of this Guarantee with your loan officer. The mortgage must be a purchase transaction that is approved and funded by SoFi. This Guarantee does not apply to loans to purchase bank-owned properties or short-sale transactions. To qualify for the Guarantee, you must: (1) Sign up for access to SoFi’s online portal and upload all requested documents, (2) Submit documents requested by SoFi within 5 business days of the initial request and all additional doc requests within 2 business days (3) Submit an executed purchase contract on an eligible property with the closing date at least 25 calendar days from the receipt of executed Intent to Proceed and receipt of credit card deposit for an appraisal (30 days for VA loans; 40 days for Jumbo loans), (4) Lock your loan rate and satisfy all loan requirements and conditions at least 5 business days prior to your closing date as confirmed with your loan officer, and (5) Pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. This Guarantee will not be paid if any delays to closing are attributable to: a) the borrower(s), a third party, the seller or any other factors outside of SoFi control; b) if the information provided by the borrower(s) on the loan application could not be verified or was inaccurate or insufficient; c) attempting to fulfill federal/state regulatory requirements and/or agency guidelines; d) or the closing date is missed due to acts of God outside the control of SoFi. SoFi may change or terminate this offer at any time without notice to you. *To redeem the Guarantee if conditions met, see documentation provided by loan officer.

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