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What Is an Interest-Only Loan Mortgage?

An interest-only mortgage lets you pay just interest for a set period of time, typically between seven and 10 years, as opposed to paying interest plus principal from the beginning of the loan term.

While interest-only mortgages can mean lower payments for a while, they also mean you aren’t building up equity (ownership) in your home. Plus, you will likely have a big jump in payments when the interest-only period ends and you are repaying both interest and principal.

Read on to learn how interest-only mortgages work, their pros and cons, and who might consider getting one.

Note: SoFi does not offer interest only mortgages at this time. However, SoFi does offer conventional mortgage loan options.

How Do Interest-Only Mortgages Work?

With an interest-only mortgage, you solely make interest payments for the first several years of the loan. During this time, your payments won’t reduce the principal and you won’t build equity in your home.

When the interest-only period ends, you generally have a few options: You can continue to pay off the loan, making higher payments that include interest and principal; look to refinance the loan (which can provide for new terms and potentially lower interest payments with the principal); or choose to sell the home (or use saved up cash) to fully pay off the loan.

Usually, interest-only loans are structured as a type of adjustable-rate mortgage (ARM). The interest rate is fixed at first then, after a specified number of years, the interest rate increases or decreases periodically based on market rates. ARMs usually have lower starting interest rates than fixed-rate loans, but their rates can be higher during the adjustable period. Fixed-rate interest-only mortgages are uncommon.

An interest-only mortgage typically starts out with a lower initial payment than other types of mortgages, and you can stick with those payments as long as 10 years before making any payments toward the principal. However, you typically end up paying more in overall interest than you would with a traditional mortgage.

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

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


Interest-Only Loan Pros and Cons

Before you choose to take out an interest-only mortgage, it’s a good idea to carefully weigh both the benefits and drawbacks.

Pros

•  Lower initial payments The initial monthly payments on interest-only loans tend to be significantly lower than payments on regular mortgages, since they don’t include any principal.

•  Lower interest rate Because interest-only mortgages are usually structured as ARMs, initial rates are often lower than those for 30-year fixed-rate mortgages.

•  Frees up cash flow With a lower monthly payment, you may be able to set aside some extra money for other goals and investments.

•  Delays higher payments An interest-only mortgage allows you to defer large payments into future years when your income may be higher.

•  Tax benefits Since you can deduct mortgage interest on your tax return, an interest-only mortgage could result in significant tax savings during the interest-only payment phase.

Cons

•  Cost more overall Though your initial payments will be smaller, the total amount of interest you will pay over the life of the loan will likely be higher than with a principal-and-interest mortgage.

•  Interest-only payments don’t build equity You won’t build equity in your home unless you make extra payments toward the principal during the interest-only period. That means you won’t be able to borrow against the equity in your home with a home equity loan or home equity line of credit.

•  Payments will increase down the road When payments start to include principal, they will get significantly higher. Depending on market rates, the interest rate may also go up after the initial fixed-rate period.

•  You can’t count on refinance If your home loses value, it could deplete the equity you had from your down payment, making refinancing a challenge.

•  Strict qualification requirements Lenders often have higher down payment requirements and stricter qualification criteria for interest-only mortgages.

Recommended: What Is Considered a Good Mortgage Rate?

Who Might Want an Interest-Only Loan?

You may want to consider an interest-only mortgage loan if:

•  You want short-term cash flow A very low payment during the interest-only period could help free up cash. If you can use that cash for another investment opportunity, it might more than cover the added expense of this type of mortgage.

•  You plan to own the home for a short time If you’re planning to sell before the interest-only period is up, an interest-only mortgage might make sense, especially if home values are appreciating in your area.

•  You’re buying a retirement home If you’re nearing retirement, you might use an interest-only loan to buy a vacation home that will become your primary home after you stop working. When you sell off your first home, you can use the money to pay off the interest-only loan.

•  You expect an income increase or windfall If you expect to have a significant bump up in income or access to a large lump sum by the time the interest period ends, you might be able to buy more house with an interest-only loan.

Recommended: Tips for Shopping for Mortgage Rates

Qualifying for an Interest-Only Loan

Interest-only loans aren’t qualified mortgages, which means they don’t meet the backing criteria for Fannie Mae, Freddie Mac, or the other government entities that insure mortgages. As a result, these loans pose more risk to a lender and, therefore, can be more difficult to qualify for.

In general, you may need the following to get approved for an interest-only loan:

•  A minimum credit score of 700 or higher

•  A debt-to-income (DTI) ratio of 43% or lower

•  A down payment of at least 20% to 30% percent

•  Sufficient income and assets to repay the loan

The Takeaway

An interest-only mortgage generally isn’t ideal for most home-buyers, including first-time home-buyers. However, this type of mortgage can be a useful tool for some borrowers with strong credit who fully understand the risks involved and are looking at short-term ownership or have a plan for how they will cover the step-up in payment amounts that will come down the road.

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.


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


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



*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.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Historical 30-Year Fixed-Rate Mortgage Trends

Historical 30-Year Fixed-Rate Mortgage Trends

Historically speaking, mortgage rates have remained relatively low since the Great Recession, with some fluctuation at times due to market conditions. As a result, a generation of homebuyers has become accustomed to a low 30-year fixed-rate mortgage.

But with mortgage rates on the rise, it can put a sour taste in the mouths of people trying to join the ranks of homeowners in the country. They may be thinking that they missed an opportunity to buy a home. However, it’s important to look at the history of mortgages and mortgage rates to put the current conditions into context.

Key Points

•   Historical mortgage rates have been relatively low since the Great Recession, encouraging a generation of homebuyers.

•   The Federal Housing Administration initiated modern mortgage lending in the U.S. during the 1930s.

•   Mortgage rates peaked at 18.63% in October 1981 due to tight monetary policies.

•   Post-2007, rates dropped significantly, influenced by the Federal Reserve’s efforts to stimulate the economy.

•   Recent trends show a rise in mortgage rates, reaching 7.79% in October 2023 before slightly decreasing.

The History of Mortgage Rates

The modern history of mortgage lending in the U.S. began in the 1930s with the creation of the Federal Housing Administration. From the 1930s through the 1960s, a combination of government policy and demographic changes made owning a home a normal part of American life. During this time, the 30-year fixed-rate mortgage became the standard for home mortgage loans.

When discussing the fluctuation of mortgage rate trends, analysts usually refer to the average 30-year fixed-rate mortgage. Here’s a look at the trend of these mortgage rates since the 1970s.

The 1970s

Throughout the 1970s, mortgage rates rose steadily, moving from the 7% range into the 13% range. This uptick in rates was due, in part, to the Arab oil embargo, which significantly reduced the oil supply and sent the U.S. into a recession with high inflation — known as stagflation.

As a result, Federal Reserve Chairman Paul Volcker made a bold change in monetary policy by the end of the decade, raising the federal funds rate to combat inflation. Though the Federal Reserve doesn’t directly set mortgage rates, its monetary policy decisions can still impact many financial products, including mortgages.

The 1980s

The average 30-year fixed-rate mortgage hit an all-time high in October 1981 when the rates reached 18.63%. The Federal Reserve’s tight monetary policy affected this high borrowing cost and put the economy into a recession. However, inflation was under control by the end of the 1980s, and the economy recovered; mortgage rates moved down to around 10%.

The 1990s and 2000s

Mortgage rates continued a downward trend throughout the 1990s, ending the decade at around 8%. At the same time, the homeownership rate in the U.S. increased, rising from 63.9% in 1994 to 67.1% in early 2000.

Several factors led to a housing crash in the latter part of the 2000s, including a rise in subprime mortgages and risky mortgage-backed securities.

The housing crash led to the Great Recession. To boost the economy, the Federal Reserve cut interest rates to make borrowing money cheaper. Mortgage rates dropped from just below 7% in 2007 to below 5% in 2009.

Recommended: ​​US Recession History: Reviewing Past Market Contractions

The 2010s

Mortgage rates steadily decreased throughout most of the 2010s, staying below 5% for the most part. The Federal Reserve enacted a zero-interest-rate policy and a quantitative easing program to prop up the economy during this time following the Great Recession. This helped keep mortgage rates historically low.

The 2020s

The Federal Reserve reduced the federal funds rate to near-zero levels in March 2020, causing a drop in rates of various financial products. The effects of the fallout from the Covid-19 pandemic pushed mortgage rates below previous historic lows. The average 30-year fixed-rate mortgage hit 2.77% in August 2021.

However, with inflation reaching levels not experienced since the early 1980s, the Federal Reserve reversed course. The central bank started to tighten monetary policy in late 2021 and early 2022, which led to a rapid increase in mortgage rates. In May 2022, the average mortgage rate was above 5%. While this was below historical trends, it was the highest rate since 2018. From there, the 30-year fixed rate mortgage crept upward, reaching a high of 7.79% in October 2023 before declining to 7.1% in April 2024.

Recommended: How Inflation Affects Mortgage Interest Rates

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


Why Do Mortgage Rates Change?

As we can see from looking at interest rate fluctuations, major economic events can significantly impact mortgage rates both in the short and long term. As noted above, this has to do primarily with the Federal Reserve.

Federal Reserve actions influence nearly all interest rates, including mortgages through the prime rate, long-term treasury yields, and mortgage-backed securities. The Federal Reserve sets the federal funds benchmark rate, the overnight rate at which banks lend money to each other.

This rate impacts the prime rate, which is the rate banks use to lend money to borrowers with good credit. Most adjustable short-term rate loans and mortgages use the prime rate to set the base interest rates they can offer to borrowers. So, after the Federal Reserve raises or lowers rates, adjustable short-term mortgage loan rates are likely to follow suit.

Longer-term mortgage rates have also risen and fallen alongside economic and political events with movement in long-term treasury bond yields. In the short term, a Federal Reserve interest rate change can affect mortgage markets as money moves between stocks and bonds, affecting mortgage rates. Longer-term mortgage rates are influenced by Fed rate changes but don’t have as direct an effect as short-term rates.

Recommended: Federal Reserve Interest Rates, Explained

Can Changing Rates Affect Your Existing Mortgage?

If you have a mortgage with a variable interest rate, known as an adjustable-rate mortgage, changing rates can affect your loan payments. With this type of home loan, you may have started with an interest rate lower than many fixed-rate mortgages. That introductory rate is often locked in for an initial period of several months or years.

After that, your interest rate is subject to change — how high and how often depends on the terms of your loan and interest rate fluctuations. These changes are generally tied to the movement of interest rates, but more specifically, which index your adjustable-rate mortgage is linked to, which can be affected by the Fed’s actions.

However, most adjustable-rate mortgages have annual and lifetime rate caps limiting how high your interest rate and payments can change.

If you took out a fixed-rate mortgage, your initial interest rate is locked in for the entire time you have the home loan, even if it takes you 30 years to pay it off.

Recommended: What Is a Good Mortgage Rate?

The Takeaway

If you are in the market to buy a home, it might be tempting to rush and buy when mortgage rates drop a bit, or to put off buying until rates hopefully decrease in the future. However, choosing the perfect time to buy a home based on the ideal rate can be difficult. You’re probably better off letting your need for a home and your personal financial situation drive your decision making. (Do you have a down payment saved up? Is your debt under control?) When it’s time to buy, do your research and choose the best mortgage available for your personal situation.

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.


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.



*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.


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.

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Female dentist with patient

10 Smart Tips To Finance Expensive Dental Work

If you need expensive dental work, you’re likely wondering how to pay for it. After getting a quote from your dentist and learning how little your insurance will cover, you may be thinking, I must be missing a way to afford this.

There’s good news and bad news when it comes to how to finance expensive dental work. Bad news first: Despite insurance, dental work can cost a lot out-of-pocket. The good news: While there’s probably not an easy solution to covering the whole bill, there are many tricks you can use to make your dollar stretch farther (and possibly even get a tax break while you’re at it).
Here, learn smart strategies about how to pay for dental work. Altogether, these ideas can add up to quite a discount off your dentist’s quote.

Key Points

•   Dental care can be very expensive, but there are strategies to help you pay for large bills.

•   Dental insurance can significantly lower costs when using in-network providers.

•   Payment plans from dentists or third parties help manage large payments over time, and some dentists will negotiate their fees.

•   FSAs and HSAs can provide tax-free savings for dental expenses, enhancing affordability.

•   Other sources of funding for dental bills include credit cards, emergency funds, and personal loans.

10 Ways to Pay for Dental Work

Many people cover their dental work by combining several of the strategies below. It’s tough to avoid paying out-of-pocket entirely, but you can often get a hefty discount off the original quote. Here, how to pay for dental work:

1. Dental Insurance

You should know that there’s a difference between a dental office that takes your insurance and a dental office that is in-network. A dentist may take your insurance even though they are out-of-network.
When a dentist says that they take your insurance, that likely means that they will file an insurance claim for you. But if your insurance doesn’t cover a procedure or service, the price will generally be set at your dentist’s discretion — and you’ll typically be responsible for paying the costs out-of-pocket.

Generally, using an out-of-network dentist means your insurance will cover less so you’ll pay more. Being in-network, on the other hand, usually means that your insurance company has prenegotiated the fees with the dentist, and they generally can’t charge more than that. So you’ll usually pay less with an in-network dentist.

Recommended: Does Cosigning Build Credit?

2. Medical Insurance

Dental work isn’t typically covered by medical insurance, but certain procedures may be covered if they’re deemed medically necessary. For instance, some kinds of oral surgery potentially can be billed as a medical procedure. Before you move forward with any dental work, it’s a smart idea to talk to your medical insurance company to find out what may be covered. This could help you afford a major dental bill.

Recommended: Guarantor vs. Cosigner: What Are the Differences?

3. Payment Plans

Paying a bill on a weekly or monthly basis can be much more manageable than paying it in a lump sum. That’s why many dental offices offer payment plans for procedures not covered by insurance.
Payment plans can be offered directly through your dentist’s office, or by third-party services like CareCredit. Ask about the specific terms of any payment plan offered. For example:

•   What procedures qualify for a payment plan?

•   Will they charge interest? And if so, how much?

•   Are other fees involved?

•   Do they have to check your credit first? If so, will it be a hard or soft inquiry?

Asking these questions beforehand can help keep you from getting blindsided by unexpected costs.

4. Flexible Spending Account

A Flexible Spending Account (FSA) is a special savings account offered through some employer benefit plans. FSAs allow employees to pay for certain out-of-pocket medical and dental costs with tax-free money.

The typical taxpayer saves about 30% in federal, state, Social Security, Medicare, and Unemployment taxes. That translates to a 30% discount off all eligible medical and dental expenses, which could be an idea for how to pay for expensive dental work.

FSA rules cap the amount of money that can be placed in the account each year ($3,300 for 2025 per the Internal Revenue Service, or IRS) and also dictate which types of expenses are FSA-eligible. Most routine dental work and orthodontia qualify: cleanings, X-rays, fillings, crowns, extractions, implants, and Invisalign.

FSAs can’t be used for any procedure that is considered cosmetic, including teeth whitening and veneers. But in some instances, if a typically cosmetic procedure is deemed medically necessary — as with some veneers — you may be able to use your FSA. Talk to your dental insurance company for more information.

One drawback of FSAs is that any funds that are unused at the end of the plan year are forfeited — so make sure you don’t leave any money on the table. In the plus column, because FSAs are funded with pretax dollars, they reduce your taxable income, which is always nice.

5. Health Savings Account

A Health Savings Account (HSA) is similar to an FSA in several ways:

•   Both are funded with pretax dollars

•   Both are used to cover health care expenses

•   Both can be established through your employer, and funded with payroll deductions

But there are also key differences between an FSA and HSA:

•   HSAs must be used with a High Deductible Health Plan (HDHP)

•   The 2025 HSA funding cap is $4,300 for individuals, $8,550 for families

•   HSA funds roll over from year to year

•   You can set up an HSA through some health insurance companies and banks, making them a good option for the self-employed

If you don’t have access to an FSA — and you are currently covered by a high-deductible health plan — you can open an HSA at any time.

6. Negotiate With Your Dentist

The cost of dental work can actually be negotiable, depending on your dentist and your situation. First, have your dentist walk you through the treatment plan. Ask lots of questions, including:

•   Are all the procedures they’re suggesting equally urgent? Can some be postponed?

•   Can you get a discount by paying cash or the entire cost upfront? Some dentists give a percentage off for this.

•   If you don’t have insurance, ask if you can score an uninsured rate.

Some dentists will be flexible, and the worst that can happen is they say no. Another thing you can do is to have an honest conversation with your dentist about your financial situation. If your budget has no breathing room, see if they are open to giving you a discount or if they are willing to push out your bill for a few months.

If the planned dental work is important but not super urgent, you may be able to schedule your appointments so they straddle two plan years. For example, if your plan year is January-December, you might schedule half the appointments for December, and half for the following January. That way, you can take advantage of two annual benefit maximums for insurance and two years’ worth of FSA or HSA funds.

7. Get Work Done at a Dental School

Having work done at a well-regarded dental school may be an option to make expensive dental work more affordable. Search online to see if you live within easy distance of a dental school that offers discounted services. Some schools may provide lower-cost exams and procedures as a way of training their students and giving them real-world experience, under the supervision of skilled, highly trained dentists. The cost can be up to 50% lower than what you might find elsewhere.

If you have access to this and want to go this route, it can be wise to carefully check online reviews to hear how others’ experiences went and feel confident in your decision.

Recommended: Applying for a Loan With a Cosigner

8. Credit Card

In some circumstances, a credit card can be a suitable payment option for dental bills. If you have a card that offers rewards or cash back, it can also provide some benefits in return.

You might also consider looking for a medical credit card. These cards are issued by banks, credit unions, and other lenders and can only be used for health care and within a specific provider network.

Some medical credit cards defer interest for a period of time after your health care charges are incurred — much like 0%-interest cards. No interest is charged so long as those charges are paid off in full before the interest-free period expires. Late payments or balances that have not been fully paid before the deferment period ends can incur interest charges. Make sure you read the fine print and are comfortable with the fees involved before signing up for one of these cards.

Speaking of 0%-interest cards, they’re another option to finance expensive dental work. By law, these interest-free promotional financing offers must last at least six months. But the most competitive offers go well beyond this to offer 0% introductory APR financing for 18 months or longer.

Before you commit to a new card, it’s a good idea to shop around for the best terms and make sure dental work meets the requirements for any rewards. Credit card debt can be a significant financial issue, so it’s wise to know the exact benefits and downsides of this kind of card. You might want to consider getting a personal loan or borrowing from family instead.

9. Personal Loan

Because of this flexibility, many people use personal loans to pay for out-of-pocket medical expenses or to consolidate high-interest debts through a debt consolidation loan

Using a personal loan to finance dental work might be a better option than a credit card. The lower the interest rate, the lower your monthly payment. And personal loans tend to have lower interest rates than credit cards. As of December 2024, credit cards have an average interest rate of more than 20%, but online lenders may offer significantly lower personal loan interest rates (even less than half that percentage) to qualified borrowers.

By using a personal loan calculator, you can compare this option to, say, using a credit card or dipping into your savings.

How much you can borrow is also flexible, and getting approved for a personal loan can be done entirely online. In short, a dental loan might be a good option to cover additional dental needs, from basic fillings to more complex, high-cost procedures.

10. Emergency Fund

Tapping your emergency fund won’t offer a discount on your dental bill, but it can provide a way to pay it. One of the cornerstones of good financial management is to build an emergency fund, typically holding three to six months’ worth of living expenses. The typical scenarios for withdrawing funds from your emergency savings account include paying bills if you lose your income or taking care of an unexpected large medical, dental, or car repair bill. So if you receive a major dental bill and need cash, your emergency fund could be an answer.

Remember, emergency funds aren’t built in a day. Setting up automatic payments into this account from your checking can be a smart move; it’s fine if it’s a small sum like $25 per paycheck to start. And don’t forget to keep the money in a high-yield savings account so it can grow until you need to use it.

The Takeaway

When it comes to how to pay for expensive dental work, there is no one perfect solution. But there are a number of resources and tricks you can call upon to stretch your dollar. Discuss your options with your dentist to find out what discounts and payment plans they may offer. Avail yourself of an FSA or HSA to pay with pretax dollars, if possible, or pay your bill with a 0% interest credit card, rewards card, or medical credit card, among other tactics.

Another option is to finance your dental work with a personal loan.

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’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

What can I use as financial assistance for dental work?

To finance expensive dental work, you may have to employ a few different tricks. First, if you have an FSA or HSA, paying your bills with pretax funds will net you an effective 30% discount. You can also schedule work to straddle two plan years so that your dental insurance and FSA/HSA cover twice the annual amount. If you’re uninsured, explain your financial situation to your dentist to see if they’ll offer a discount. And consider taking out an unsecured personal loan.

Can I use a personal loan as financial assistance for dental work?

Yes, a personal loan can be a great option for covering expensive dental work, compared to high-interest revolving credit. Shop around for the best rate and terms, and read the fine print to make sure you fully understand the fees involved for any option you are considering.

Is it hard to get financial assistance for dental work?

It will take some work on your part, but financial assistance is available for low-income patients through dental schools, clinical trials, United Way, Medicare, and Medicaid. Find out what kind of assistance you may be eligible for on the U.S. Department Health & Human Services website at HHS.gov.


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.


Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.


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.

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Inexpensive Ways to Refresh Your Home Room by Room

33 Inexpensive Ways to Refresh Your Home Room by Room

The change of seasons often brings on a flurry of cleaning and a home refresh. If you’re looking for some budget-friendly changes that will bring new life to your rooms, we have those for you.

Before you start, try to clear any clutter you may have. If you tend to hoard, begin your refresh by donating or throwing away items you no longer use. You may also want to review this list of home improvements that can increase the value of your home.

Living Room

Whether you’re entertaining guests or just hanging out, your living room should feel inviting and reflect your style, yet also be functional and versatile.

1. Paint

A fresh coat of paint can do wonders for any living space. Picking neutrals like white or beige ensures a clean and timeless look.

2. Statement furniture

If you don’t have the budget to buy all new furniture, you may want to consider picking one or two new pieces, such as an eye-catching chair or coffee table, that will update your space.

3. Area rug

A quality rug can anchor a room and add a subtle splash of color. It’s also a good idea to make sure it’s sturdy enough to handle high traffic. Adding a rug pad can be worth the additional cost because it feels luxe underfoot and prolongs the life of your rug.

4. Lighting

How you light a room can affect its overall feel. Installing dimmers can enable you to adjust the lighting depending on the mood you’re trying to set. A new floor or table lamps can also allow you to subtly adjust lighting.

5. Clutter containment

If you still have a lot of “stuff” after your initial purge, you may want to consider storing it in decorative receptacles such as woven baskets or a storage ottoman. This is especially useful for kids’ toys.

6. Framing

Buying nice frames to create a gallery on blank walls, or even just to display family photos on a side table, can really personalize your space. Consider a digital photo frame for convenient streaming.

7. Window treatments

Blinds or curtains can add depth to a room. The most affordable option is to buy premade curtains and rods from a home décor store and install them yourself. Measuring carefully is the key to success.

8. Sofa spruce-up

Purchasing a bold couch cover and swapping out your throw pillows can be a quick and inexpensive way to add color and patterns to your space. Toss a blanket over the arm of the sofa for both added texture and warmth.

9. Go green

Plants have always been a simple and effective way to bring life into a space. Good news if you don’t have a green thumb: You can now download an app (Planta is one example) that will help you remember to care for them properly.

10. Switch it up

Looking for a zero-cost home refresh option? You can try rearranging your furniture. Using apps like Modsy for floor plan ideas can help you find options that complement your lifestyle and make the most efficient use of your space.


💡 Quick Tip: Loans typically offer lower interest rates than credit cards. Consider a SoFi home improvement loan to fund your next renovation.

Kitchen

Dreaming about that perfect HGTV kitchen? You can use our calculator to estimate just how much a full remodel may cost you. (Hint: The average cost of a kitchen remodel taps in at more than $50,000.) Never fear: You can still refresh your kitchen with some of the following affordable upgrades — no permits or contractor required.

11. Cabinet facelift

If your cabinets are looking dated, you may want to try putting a fresh coat of paint on them. For an added touch, consider changing out the hardware and installing new handles and drawer pulls.

12. Seat swap

You may want to consider upgrading worn or outdated bar stools in exchange for something sleeker. If purchasing new stools isn’t in your budget, get out your staple gun and try changing the upholstery.

13. Appliance upgrade

If your appliances aren’t working as well as they used to, or they’re nearing the 10 year mark, it may be time to replace them. Although this can get expensive, you can find bargains on bundles, especially during holiday sales, and some outlet stores offer steep discounts on open box appliances.

14. Fill a wall

If you have unused wall space, you may want to consider installing floating shelves for smaller items such as cookbooks, plants, and other knick knacks. Not only will the extra shelving provide more storage in your kitchen, but it can also create an eye catching display.

15. Light it up

For a style update with a big impact, you can look into replacing old lighting fixtures with modern pendants. They come in such a wide variety of styles and price points that there’s something for just about anyone’s taste and budget.

16. Combine decor with utility

It’s easy to warm up a space with an attractive fruit bowl, colorful wall clock, or pretty serving tray. If you’re adding a TV to your kitchen, consider one that will display art or photos when you aren’t watching your favorite shows.

17. Streamline storage

Your storage areas can also be the focus of a spring upgrade. Toss expired foods from your pantry and do a deep clean of your fridge and freezer. If you want to really get organized, consider storing your dry goods and refrigerated items in clear canisters and bins for easy identification and access, and using drawer dividers to separate utensils.

Recommended: Interior Decoration Tips for Furnishing A New Home

Bathroom

In an ideal world, a bathroom remodel would include a new vanity, tile, and hardware. However, even if a demo is more idealistic than realistic, that doesn’t mean this space is out of bounds. Start small with a few less costly changes.

18. Hardware update

Replacing your outdated sink, bath and shower hardware can boost the appeal of just about any bathroom. By adding matching towel racks, door hooks, and vanity knobs and handles, you can achieve a cohesive upgrade that doesn’t break the bank.

19. Target: toilet

If your porcelain throne is starting to show wear and tear, it may be time to replace the lid and seat. You can go all in and buy a new toilet for just a couple hundred dollars, although you will likely need a plumber as well.

20. Mirror modern

If you have a long vanity with two sinks, you may want to consider installing two separate mirrors with bold frames. Mirrors with LED backlighting offer a more modern hotel-like look.

21. Shower showcase

The shower curtain is one of the first things people see when they walk into a bathroom. Introduce a new look by finding a curtain with a cool pattern and adding a new curtain rod and rings.

22. Spa retreat

A bamboo bath mat that’s easy to clean and water-resistant can elevate your space. So can candles or a diffuser. Add attractive shelving — or simply swap in plush new towels — and you’ll instantly create a serene scene that could compete with any day spa.

23. Accessorize

Placing your soap dispenser and toothbrush holder on a decorative tray easily gives your bath a tidy boost. Take a good look at all the personal care products that are visible in your space. Stow unattractive or less frequently used products in drawers and make sure what’s still visible is in attractive containers.

24. Grout out

No budget for new tiles? Put some elbow grease into cleaning the grout on your existing tile floor and walls, or regrout the entire space for a cleaner, brighter look.


💡 Quick Tip: You never know when you might need funds for an unexpected repair or other big bill. So apply for a HELOC (a home equity line of credit) brokered by SoFi today: You’ll help ensure the money will be there when you need it, and at lower interest rates than with most credit cards.

Bedroom

Your bedroom should be your haven after a long day of work, but you don’t need to do a complete bedroom remodel to reap more relaxation. Just make a few changes to create a more peaceful setting.

25. Headboard

For a few hundred dollars, you can find an upholstered headboard that’s both fashionable and easy to assemble. It can create a dramatic difference in your bedroom’s appearance.

26. Paint

It’s pretty easy to refresh your walls over a weekend. If you want to liven up your space with some color, stick with soft hues such as pale blue or gray. For the I-hired-a-decorator feel without the price tag, consider removable wallpaper.

27. New linens

To quickly liven up a boring bed, you can replace old sheets, blankets and pillows. Opt for soothing colors and muted patterns that will create a peaceful sleeping environment.

28. Floors

Whether you have wooden floors or carpet, layering an area rug can help to create a cozy environment. For a luxurious feel, try shag or sheepskin rugs.

29. Lighting

Designing a unique lighting setup doesn’t have to be hard or expensive. You may be able to freshen up your space by installing plug-in sconces (which require no rewiring) on each side of your bed. It can save table space and add decor to your wall.

30. Side tables

For a budget-friendly furniture refresh, just replace your bedside tables. Look for a pair with concealed storage to cut down on the cluttered look.

31. Closet clutter

Custom closets can get expensive very quickly. But you can get your closets under control by installing affordable hanging bars and shelves that not only look good, but help you organize your wardrobe.

32. Floor mirrors

A full-length floor mirror will reflect light and make your room feel bigger — not to mention that it comes in handy when you’re pulling together your daily outfit.

33. Art & photos

Many designers suggest thinking of your walls as a blank canvas to display your style and the people you love. You can achieve this by hanging your favorite photos or artwork in eye-catching frames.

What is Your Home Missing Quiz

The Takeaway

Even small changes can make your home feel new again. Figure out how much you want to spend on your home refresh before you start so you can prioritize which changes are most important to you. Staying within your budget by choosing upgrades that you can do yourself, shopping secondhand stores, and comparing prices carefully.

Inspired to tackle a larger home makeover project? A home improvement loan may be the way to go. SoFi’s no-fee home improvement loan could help you foot the bill of your kitchen reno or bathroom demo, with no collateral required. Plus, it’s possible to get your funds the same day* which can help fast track your remodel.

Learn more about how a home improvement loan can help with your remodel.


Photo credit: iStock/KatarzynaBialasiewicz

* Same-Day Personal Loan Funding: 82% of typical SoFi Personal Loan applications, excluding Direct Pay Personal Loans and Personal Loan refinance, from January 1, 2022 to January 1, 2023 that were signed before 7pm ET on a business day were funded the same day.

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.


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.


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.

²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.


(Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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What Are Mortgagors, What Do They Do, and How Do They Differ From Mortgagees?

What Are Mortgagors, What Do They Do, and How Do They Differ From Mortgagees?

“Mortgagor” is just another word for someone who is borrowing money from a mortgage lender (the “mortgagee”) to purchase real estate. It’s not every day that you see the term “mortgagor” and it doesn’t roll off the tongue easily. You might even think perhaps it’s misspelled. But when it comes to financial matters, half the battle is understanding the jargon. In this case, the good news is that even if you have never heard of a mortgagor, it’s just another word for being the borrower on a home loan.

The Function of a Mortgagor

The mortgage universe can be a bit complex and it’s helpful to understand the basics of mortgages. So let’s take a closer look at the mortgagor’s role. The mortgagor makes monthly payments to the mortgagee as specified in the loan agreement. The terms of a mortgage can vary widely. For example, depending on the applicant’s credit history, the interest rate may be higher or lower than the average.

A mortgagor may choose from different types of mortgage loans. Some loans have a fixed interest rate and a term of 30 years, though many lenders offer loan lengths of 20, 15, or 10 years. A fixed-rate mortgage has an interest rate that remains the same during the life of the loan. A variable-rate mortgage is one in which the interest rate moves up and down with the market.

The bottom line: Mortgagors must pay back the loan in a timely fashion. If not, mortgagees can force foreclosure of the home or other real estate — the collateral for the loan.


💡 Quick Tip: Buying a home shouldn’t be aggravating. SoFi’s online mortgage application is quick and simple, with dedicated Mortgage Loan Officers to guide you through the process.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (888)-541-0398.


How a Mortgagor Gets a Mortgage Loan

A mortgagor applies to a mortgagee for a mortgage. Conventional mortgage loans are originated by private lenders like banks, credit unions, and mortgage companies. Certain private lenders also originate FHA, VA, and USDA loans; those loans are insured by the Federal Housing Administration, Department of Veterans Affairs, and U.S. Department of Agriculture. Government-backed loans are often easier to qualify for and may have more lenient terms and lower interest rates.

No matter what kind of mortgage loan you seek, expect to jump through some hoops and produce much documentation to prove you are creditworthy and have the means to pay back what you borrow. A prospective lender will do a hard credit inquiry into your credit scores and credit history. So it’s helpful to understand what makes up your credit scores. Important factors include your credit history, how long you’ve had your lines of credit open, your payment history, and debt-to-income ratio, which is the total amount of your monthly debt payments divided by your gross monthly income. If your debt-to-income ratio is high, that may be a no-go in the eyes of a lender, who may see you as tapped out with no real wiggle room to take on a mortgage.

To purchase a home, buyers often take on a mortgage loan for the price minus any money they put forth as a down payment. While you may be able to get an FHA loan with 3.5% down, or a VA loan with no down payment at all, the median down payment is around 13% of the value of the home.

Contractual Obligations of Mortgagors

A deal is a deal is a legally binding deal. Once the ink dries on that mortgage, you’re locked into your commitment to pay as you said you would. If you veer off course, you’re at risk of losing the home, as there is a lien on the real property as collateral for the loan. At the very least, late or missed payments will cause your credit score to dip, which could be problematic the next time you need to show your credit score, be it for a car loan or maybe even to a potential employer.

Equity of Redemption

If this phrase sounds important, it is. You’ll be thankful for it if you have gotten behind on your mortgage. Equity of redemption, also called right of redemption, will give you a chance to get caught up and keep your home before a foreclosure sale.

When you miss payments, the mortgagee can start the foreclosure process. The lender can take back the house and sell it at auction to pay off the debts. If this process has begun, you may be able to redeem the mortgage using equity of redemption. Understand that you’ll need to come up with the money to pay off the principal, interest, and expenses under equity of redemption. Realistically, if you’re in financial trouble, a funding source to pay off the loan is unlikely.

Some states have a law that gives mortgagors the right to redeem the home for a period of time after the foreclosure sale. With the statutory right of redemption, usually the borrower must pay the bid price, plus interest and fees, to the buyer of the property at the foreclosure sale.

Rights of Mortgagors

While it doesn’t have to be a battle royal, when it comes to mortgagee vs. mortgagor, the mortgagee holds the keys to the kingdom. The lender puts up the money, and if the borrower can’t make the mortgage payments, the lender has the right to take the house. That’s not to say you are without a few good things in your back pocket, like the aforementioned rights of redemption. You can also ask that your mortgage be transferred to a third party, but only if the mortgagee is not in possession of the property.


💡 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.

Mortgagors vs Mortgagees

To lessen any confusion, here’s a quick look at who does what.

Mortgagor

Mortgagee

Makes monthly payments Receives payments
Meet all terms of the mortgage Sets loan terms, including length of loan, payment due dates, and interest rate, and communicates them clearly
When the loan is paid in full, gets the deed Can seize property if mortgagor stops paying

The Takeaway

Understanding the lingo can help you be more confident as you embark on your homebuying journey. Do your research, pull together your financial documents, find a home you love and soon you, too, could become a mortgagor.

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.


Photo credit: iStock/fizkes

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.



*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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