The question of how student loan forgiveness would be funded doesn’t have a clear-cut answer, and ideas about how it would be paid for can be heavily influenced by a person’s political leanings. One recent survey found that the majority of Democrats support canceling some or all student debt, while most Republicans oppose any cancelation. Read on to learn more about this important issue.
Who Pays for Student Loan Forgiveness?
There’s no easy answer in terms of how plans to cut student debt would be funded. Government finance is complex. Typically, the federal government would need to foot the bill for student loan forgiveness, and the government would have two options to pay for it: cut spending or raise taxes. Making the situation more complicated is the fact that forgiven loans may have already earned a profit, which could make reconciling the impact of writing off this debt even harder.
In addition, viewpoints on student loan debt are often divided by political affiliation. Democrats are more likely to support debt cancellation and hold the government and lenders responsible for the high levels of student debt. Republicans, on the other hand, usually are against the idea of student loan forgiveness and often feel the borrowers themselves should shoulder some of the blame for the situation.
Spending Cuts and/or Higher Taxes
If some or all student loans were to be forgiven, here’s a closer look at some potential paths:
• Cutting spending, which can be challenging. Some financial and legal experts worry that cuts would wind up hurting education resources, such as universal pre-K and higher education initiatives. These could be trimmed to save money.
• Raising taxes, which could involve increasing individual income tax rates or reducing tax deductions, such as mortgage interest, charitable contributions, medical expenses, IRA contributions, and more. The government could also opt to raise taxes on corporations and the wealthy.
• A combination plan of the two methods: some tax cuts along with some tax hikes.
Neither Is Necessary
Another point of view to consider: Some pundits say that the cancellation of federal student loan debt won’t cost the government anything. They point to the fact that student loans were paid for by taxpayers when the funds were first disbursed.
They also hold that, over time, payments by borrowers of student loans to the Department of Education have almost been equal to the amount of money loaned out. In that way, they see the situation of forgiving loans as being close to break-even. One review found that the government collected about $85 billion a year in payments on about $95 billion a year in loans paid out. In terms of government spending, they believe forgiveness would not result in a major shortfall.
Proponents of this theory also say that records reveal that the Department of Education has been profiting on student loans over the years, and that gain can also be seen as an asset against which canceled federal loans can be compared.
Obviously, this is a complex issue with many different viewpoints regarding the best path forward.
💡 Quick tip: Some student loan refinance lenders offer no fees, saving borrowers money.
The Current State of Student Loan Forgiveness
It can be helpful to keep in mind the recent events surrounding student loan forgiveness.
• The Biden administration announced a $441 billion federal student loan debt relief program for borrowers who earned less than $125,000 ($250,000 for married couples) in 2022. This was blocked by the Supreme Court in 2023.
In the wake of this decision, the Biden administration proposed new initiatives in April 2024 to forgive $7.4 billion in student debt, including waiving:
• Accrued and capitalized interest for certain borrowers
• Debt for those eligible for the Saving on a Valuable Education (SAVE) Plan, in the event of a closed school discharge, and other forgiveness programs
• Student loan debt for those who entered loan repayment 20 years ago
• Debt for those who enrolled in programs or institutions that provided low financial value
• Debt for those who experience repayment hardship
In May, the U.S. Department of Education announced cancellation of $7.7 billion for certain borrowers under Public Service Loan Forgiveness Program (PSLF) and through the SAVE Plan, which offers borrowers a shortened forgiveness period. However, court orders recently halted the SAVE program after several states sued.
Where Does All the Canceled Debt Go?
It’s hard to say where all the canceled student debt would go, and it’s also difficult to forecast how much forgiving debt would cost the government, if anything. The government would at least have to adjust its revenue projections, even when the original principal has been paid off with interest.
One important note: Canceled student debt can have a positive impact on borrowers. It gives them more disposable income, which they can use in ways that stimulate the economy, from buying more consumer goods to taking out more mortgages.
Will My Taxes Increase if Student Loans Are Forgiven?
Many believe that federal student loan forgiveness, as planned, could transfer debt from borrowers who took out student loans to taxpayers, according to the U.S. House Budget Committee. This is a viewpoint that tends to be held by Republicans who are opposed to forgiveness for various reasons.
The Budget Committee has stated that approximately 87% of adults without student loans will wind up paying for the 13% of borrowers who borrowed for college and 56% of the student loan debt for graduate degree borrowers.
Currently, some estimates say that $1 trillion in federal student loan cancellation would mean an additional $2,500 tax bill for most Americans.
Another angle to consider: If borrowers’ debt is forgiven, it could be taxable. Borrowers would receive IRS Form 1099-C in this instance, and might need advice from a professional tax preparer.
Recommended: Guide to Student Loan Forgiveness
Will Private Student Loans Be Forgiven?
The Biden administration’s student loan forgiveness plans would not cancel private student loans, which come from private companies, including online banks. The forgiveness plans only apply to those with federal student loans, or loans that come from the U.S. Department of Education.
Unlike federal student loans, which borrowers apply for using the Free Application for Federal Student Aid (FAFSA), you can apply directly to the lender for a private loan. Unlike in the case of federal loans, you may need to undergo a credit check and may encounter less flexible repayment plans with private student loans.
However, private loan lenders may offer some benefits that are similar to those of federal student loans, including deferment (when borrowers can temporarily stop making payments and interest may not accrue), forbearance (when borrowers can temporarily stop making payments or make smaller payments and where interest does accrue), or unemployment protection.
It’s wise to check carefully with your lender to find out their exact policies.
Alternative Options for Paying Off Student Loans
Since the future of forgiveness is largely uncertain, borrowers can consider other ways to pay off student loan debt. They can take advantage of several alternative options, including putting extra toward principal, considering other repayment plans, making lump sum payments, and additional methods.
Here are several possible options:
• Put extra toward the principal: Putting extra cash toward your principal student loan can result in a faster payoff than by simply making your usual monthly payment. Putting an extra $100 toward your principal every month, for example, can make a difference. You will typically not pay prepayment penalties on private or federal loans, which is a charge that penalizes you from paying off your student loans early.
• Make lump-sum payments: If you have a lump sum, like a tax refund, a bonus, or other windfall money, you can put that toward your debt instead of spending it. If you can find extra money regularly (such as a couple of times a year), that could help you pay off your student loans. A side hustle can also help you make lump-sum payments as well.
You might also consider using the debt snowball method of taking care of your loans, which means you put money toward your smallest loan balance, then progress to larger loan balances after that.
• Check with your employer: Your employer may offer a student loan repayment benefit. Learn whether your employer will help pay for qualified educational expenses, including your student loan balance.
• Budget your money: Living on a budget is a great way to ensure you make on-time student loan payments. Though you’re shielded from penalties on late payments through September 2024 through an on-ramp period, it’s still good practice to avoid late payments so you don’t risk default later.
• Refinance or consolidate student loans: Refinancing means changing one or more loans to private student loans with a new interest rate, term, and monthly payment. Securing a lower interest rate means you’ll pay less interest over time. However, it’s important to be aware that refinancing federal student loans in this way means you will forfeit the right to certain benefits and protections, such as deferment. Also, if you refinance for a longer term, you may well pay more interest over the life of the loan.
• Consolidating federal student loans: This means pooling one or more federal student loans into a Direct Consolidation Loan with one monthly payment with one interest rate. You may save money over time when you consolidate, but check to be sure.
• Repayment plans: Several repayment plan options exist for both federal and private student loans. For example, with federal loans, you may look into several income-driven repayment plans, such as the SAVE, Pay As You Earn (PAYE), income-based repayment (IBR), and Income-Contingent Repayment (ICR) plans as repayment options. Check with your loan servicer to determine which makes sense for you, whether you have a mix of federal and private loans or just federal loans.
Recommended: Are Student Loans Forgiven After 20 Years?
The Takeaway
There are different opinions about how federal student loan forgiveness will be paid for, if and when it’s enacted. Viewpoints often align with a person’s political beliefs, with Democrats tending to favor loan cancelation and Republicans being against it.
Regardless of the future of student loan forgiveness, there may still be options to help you manage your student debt, such as budgeting, considering alternate repayment plans, or refinancing.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
FAQ
How will student loan forgiveness be funded?
Some experts claim that the government would need to cut spending or raise taxes to fund student loan forgiveness.
What impact will student loan forgiveness have on borrowers?
Pending legal blocks, borrowers could see some of their student loans disappear, providing relief for millions of borrowers. It’s also important to understand that student loan forgiveness may be subject to tax. You’d receive Form 1099-C to document it; consider checking with a tax professional to learn more about how tax applies in your situation.
What are the potential drawbacks of student loan forgiveness?
In addition to the potential for taxpayers to shoulder the debt, other downsides of debt forgiveness might include the forgiven amount being taxed, cuts to government educational spending, and overspending and increased debt for students who find themselves with more disposable income.
Photo credit: iStock/Drazen Zigic
SoFi Student Loan Refinance If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.
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Renting a house is different from renting an apartment, and it’s important to be prepared. In this guide, we’ll cover 10 essential tips to help you navigate the process. Whether you’re looking to rent a house in Austin to settle down, a quiet one-bedroom house in Seattle, or a lease in Miami, these tips will help you find the right place and avoid common pitfalls.
How does renting a house work? 10 steps for success
When looking for a house to rent you may find the application process and search are a little similar to renting an apartment. To help you navigate the process smoothly, here are the key steps you should follow when renting a house.
1. Assess your needs
Before diving into the rental market, it’s crucial to understand your needs and preferences. Consider the size of the house that suits your lifestyle—do you need multiple bedrooms, or is a smaller space more practical for you? Think about the type of house that aligns with your daily routine. For example, if you work from home, a house with a dedicated office space or a quiet environment might be essential. Consider creating a list of all the amenities you’re looking for.
Location is another key factor. Do you want to be close to work, schools, or public transport? Perhaps a neighborhood with parks or a community appeals to you. Decide on your non-negotiables, like a backyard for your pets, a garage for your car, or a house that allows for modifications like gardening. Having a clear idea of what you need will help you narrow down your options and focus on houses that truly fit your lifestyle.
2. Set a budget
Once you know what you’re looking for, the next step is to set a realistic budget. Start by evaluating your financial situation to determine how much rent you can afford. A general rule of thumb is that your rent should not exceed 30% of your monthly income.
But don’t forget about other costs. Utilities, security deposits, renter’s insurance, and possible maintenance fees should all be factored into your budget. For instance, a house with central air conditioning may have higher utility costs, so it’s essential to consider these expenses upfront. Staying within your budget not only ensures financial stability but also allows you to enjoy your new home without the stress of overextending yourself.
3. Research the rental market
With your needs and budget in mind, it’s time to explore the rental market. Start by using online platforms like ApartmentGuide, Rent.com, Redfin, or work with a real estate agent to find available houses. It’s essential to understand the market trends in your desired area. For example, if you’re renting in a competitive neighborhood, you might need to act quickly when you find a house that meets your criteria.
4. Prepare necessary documentation
Before you can secure a rental house, you’ll need to gather essential documents. These typically include identification, proof of income (like pay stubs or tax returns), and references from previous landlords or employers.
A good credit score is often crucial, as it reflects your reliability as a tenant. If your credit score is less than stellar, consider offering a larger security deposit, looking for houses and apartments without a credit check, or providing a co-signer to strengthen your application. Organizing your rental application package in a professional and complete manner can make you stand out to landlords, especially in competitive markets. This preparation shows that you’re serious and ready to move forward, giving you an edge over other applicants.
5. Contact landlords or property managers
With your documentation ready, the next step is to reach out to landlords or property managers. Effective communication is key during this stage. Be polite, clear, and prompt in your emails or calls. Express your interest in the property and ask important questions about the lease terms, maintenance responsibilities, and any specific rules or regulations.
If you have pets, it’s crucial to confirm the landlord’s pet policy upfront to avoid any surprises later. Understanding the importance of clear communication from the start can help build a positive relationship with your potential landlord, which can be beneficial throughout your tenancy.
6. Tour houses
Touring the house in person (or virtually, if necessary) is a critical step in the rental process. While the house might look perfect online, seeing it in person allows you to assess its true condition. Look beyond aesthetics—check for signs of wear and tear, test appliances, and inspect safety features like smoke detectors and locks.
Create a checklist to evaluate the property, including plumbing, heating, and electrical systems. Ask questions during the tour, such as when the house was last renovated or how often maintenance is performed. Taking notes or photos during your visit can help you remember details when comparing different properties.
7. Apply to rent the house
Once you find a house you like, the next step is to submit your rental application. Ensure that your application is complete and includes all required documents, such as proof of income, references, and identification. A well-prepared application can make a strong impression on the landlord and increase your chances of securing the property. After submitting your application, be ready to respond quickly to any additional requests from the landlord or property manager to move the process forward smoothly.
8. Sign the lease agreement
Before signing the lease, take the time to thoroughly review the document. Ensure you understand all the clauses, terms and policies, including those about rent increases, renewal options, and procedures for early termination.
Keep a copy of the signed lease for your records. If you encounter any issues with the lease agreement, such as unexpected clauses or terms that were not discussed, address them before signing. Being diligent at this stage can prevent future misunderstandings and ensure a smooth rental experience.
9. Prepare for move-in day
Once the lease is signed, it’s time to prepare for move-in day. Coordinate with the landlord to confirm the move-in date and process. You’ll also need to set up essential services like utilities, internet, and possibly waste removal.
Conduct a final walkthrough of the house before moving in, documenting the property’s condition. Take photos or videos of any existing damage and note them in the move-in checklist. This documentation is vital to avoid disputes when it’s time to move out and can protect your security deposit.
10. Settle into your new home
After moving in, take steps to make the house feel like home. Personalize your space with decor that reflects your style, and take the time to explore the neighborhood and meet your neighbors.
Establishing a good relationship with your landlord from the beginning can be beneficial. For example, promptly reporting any maintenance issues helps ensure they’re addressed quickly, maintaining the property’s condition. Regular communication with your landlord about any concerns or changes can also lead to a positive rental experience, making your house truly feel like home.
Pros and cons of renting a house
Pros:
Customization and personalization: Renting a house often allows for more opportunities to customize your living space. Landlords may be more flexible with allowing tenants to paint walls, hang pictures, or even make minor improvements, giving you a chance to create a home that feels more personal and unique.
Outdoor living: Many houses come with outdoor spaces like gardens, patios, or backyards. These areas can be ideal for gardening, entertaining, or simply enjoying fresh air, offering a lifestyle that is typically not available with apartment living.
Pet-friendly options: Houses are often more accommodating for pets, especially larger breeds that might not be allowed in apartments. Having a yard can be particularly beneficial for pet owners, providing a safe space for pets to play and exercise.
Cons:
Isolation: While privacy is a benefit, living in a house can also lead to a sense of isolation, particularly if the home is in a suburban or rural area. Unlike apartments, where neighbors are close by, houses may not offer the same immediate sense of community.
Limited access to public transportation: Houses, especially those in suburban or rural areas, may be further from public transportation options. This can make commuting more difficult and may require a reliance on a personal vehicle, adding to transportation costs.
Longer commute times: If the house is located outside of the city center, you may face longer commute times to work, school, or social activities. This can impact your daily schedule and add stress to your routine.
Higher move-in costs: Renting a house often comes with higher upfront costs, including security deposits, potential maintenance fees, and possibly even first and last month’s rent. These expenses can add up quickly, making the initial move more costly compared to renting an apartment.
The key differences on renting a house vs. renting an apartment
Space and privacy: Houses usually offer more space and greater privacy, ideal for people who value solitude. Apartments are more compact, often with shared walls, which can limit privacy.
Maintenance responsibilities: Renting a house may involve handling more upkeep tasks like yard work and snow removal. In an apartment, maintenance is generally managed by property staff.
Amenities and facilities: Apartments often include shared amenities like gyms and pools, while houses might offer more personalized features, like a private yard, but lack communal facilities.
Cost and utility bills: Houses typically have higher rent and utility costs due to larger space and less energy efficiency. Apartments often include some utilities in the rent, making them potentially more cost-effective.
Lease flexibility: Apartments usually offer more flexible lease terms, such as short-term options. Houses often require longer commitments, which can provide more stability.
Neighborhood and community: Houses are often in quieter residential areas, while apartments are more likely found in urban settings, offering closer access to city amenities but with more noise and activity.
Storage: Houses typically provide more storage space, including closets, attics, basements, and garages. Apartments generally have limited storage, often requiring creative solutions or external storage units.
St. Petersburg, Florida, is often celebrated for its sun-soaked beaches and vibrant arts scene. But this coastal city holds a wealth of hidden treasures waiting to be discovered. Whether you’re considering a move or planning a visit, venture beyond the well-known attractions to uncover St. Petersburg’s hidden gems and its true charms.
Lisa Wells from Coastal Wandering shares that “the city of St. Petersburg has over 600 street murals, and more are added every year. You can explore many of them on a walking tour or bike ride through the Central Arts District. Every October, the SHINE St. Pete Mural Festival brings artists from all over the world to create new works.” Lisa also recommends not to miss the “Greetings from St. Pete” mural in the downtown waterfront area — ”it’s a great spot for selfies.”
Photo courtesy of Coastal Wandering
If you’re looking to score unique, one-of-a-kind thrift finds while giving back, look no further than the CASA Thrift Boutique. Located in downtown St. Pete, the store offers vintage and new items, including art, home goods, apparel, shoes, and more. If the amazing selection of new and used items isn’t enough, every dollar spent at the CASA Thrift Boutique directly supports CASA Pinellas, an organization dedicated to ending domestic violence and providing safety for survivors, their children, and their pets. Photo courtesy of CASA: Community Action Stops Abuse
Kate Jacobsen with Remote Lifestyle Guide blog recommends The St. Pete Pier as a St. Petersburg hidden gem. She shares that it is more than just a pier — it’s a hub of activities that showcases the best of downtown St. Petersburg’s waterfront. The St. Pete Pier is a go-to spot for both locals and visitors in St. Petersburg. It’s easy to spend several hours on the pier and not do everything. It’s a great spot for an evening out or spending the day with your family. Whether you’re enjoying a leisurely walk along the water, grabbing a bite at one of the many eateries, or exploring the local marketplace, the pier offers an all-encompassing experience that locals and visitors alike can’t get enough of.
Julie Andrews, co-founder of Beach Boutique Rentals says, “When you dine in St. Pete, you must head straight to Madfish in St. Pete Beach.” From the outside, this St. Petersburg hidden gem looks like a polished retro diner; the restaurant is actually inside a refurbished train dining car. The interior is coastal, nautical, and elegant. The staff is attentive and welcoming, creating a relaxed yet polished dining experience. Madfish is intimate with limited seating, so reservations are a must. If you’re looking for something special, the Chateaubriand for two is a dish worth trying.
Belle Young with Travel Tech recommends Willy’s Burgers and Booze as a hidden gem in St. Petersburg, FL. Willy’s Burger and Booze is tucked away in a beach shack on Corey Avenue. This laid-back, unassuming spot is renowned among locals for having the most juicy, delectable burgers. Willy’s serves up some of the best burgers in town, crafted with high-quality, fresh ingredients that ensure exceptional flavor. The relaxed atmosphere and standout food make it a must-visit for anyone seeking a delicious meal off the beaten path.
Colony Grill, a St. Petersburg hotspot on bustling Central Avenue, brings the iconic thin-crust bar pie from the Northeast to Florida’s sunshine coast. Known for its signature hot oil topping—a fiery flavor sensation since 1935—Colony Grill offers a unique pizza experience. Open daily from 11:30 a.m. until late.
Stephanie Lafleur, CEO and author of the Fleurty Girl Travels blog, shares that a hidden gem in Saint Petersburg is the Dalí Museum. Located along the downtown waterfront in St. Pete, the Dalí offers a unique outdoor space to hang out with friends and a world renowned art collection inside. Locals and visitors alike enjoy spending time on the grounds of this one-of-a kind museum. Photo courtesy of Fleurty Girl Travels
Discovering St. Petersburg’s essence
St. Petersburg is a city full of surprises, and its hidden gems are just waiting to be discovered. Whether you’re a long-time resident or a first-time visitor, exploring these off-the-beaten-path spots will enrich your experience. So, ditch the crowds and embrace the unexpected.
Here’s a reminder that September 2, 2024 is the final day we can earn 40,000 points for referring a friend to the Chase INK card.
We’re finishing now two golden months where we can refer friends to the Chase INK Preferred card for 100,000 points which can then be matched to 120,000 points via secure message; and the referrer gets 40,000 points.
That’s a total haul of 160,000 points between the referrer and the new member. I consider this to be from the best deals of all time. This will end on September 2nd (or possibly earlier if Chase pulls the 120,000 points INK Preferred offer).
If you have any Chase INK card you can refer a friend to signup for the INK Preferred card. And of course this 40,000 points bonus is useful for referring friends to other Chase INK cards as well. I’m highlighting here the INK Preferred option since that’s an excellent time-limited deal on its own.
The referrer can earn up to 200,000 referral points per INK card they possess. For example, I hold an INK Cash card an INK Unlimited card and an INK Preferred card. I can refer 5 friends to any INK card using my INK Cash referral link and earn 200,000 points. Separately, I can refer 5 friends to any INK card using my INK Unlimited card link and earn 200,000 points. Separately, I can refer 5 friends to any INK card using my INK Preferred referral link and earn 200,000 points. I’ll get a 1099 from Chase for the referrer bonuses if I earn more than 60,000 points from all my referrals (i.e. if I refer two friends and earn 80,000 points I’ll get a 1099 from Chase, even if I use different referral links for the two friends).
I started making extra money and side hustling around 15 years ago, and since then I have done over 20 different side hustles. I started so that I could stop living paycheck to paycheck, and so that I could pay off my student loans quickly (I ended up paying off $40,000 in student loans in…
I started making extra money and side hustling around 15 years ago, and since then I have done over 20 different side hustles.
I started so that I could stop living paycheck to paycheck, and so that I could pay off my student loans quickly (I ended up paying off $40,000 in student loans in just 7 months thanks to side hustling!).
Some were short-lived, while others turned into steady streams of income (and are even my full-time income today). Each side job taught me something valuable about money, time, and effort. I juggled everything from reselling clothes online to being a virtual assistant, mystery shopping, answering online surveys, having roommates, and more.
There isn’t one best way to make extra money; it depends on what you’re good at, what you like, how much time you have, and more.
If you want to start a side job, my experiences can help you decide. I’ll tell you what I learned from each one I tried, so you can see the pros and cons of each.
My Side Hustles Review
Below is my review of the different side hustles I have tried over the years. These are in no particular order.
A picture of me blogging from several years ago 🙂
1. Blogging
Blogging can be a great way to earn money while writing about topics you love. I’ve done it for years and have seen how it can grow from a hobby into a full-time job.
I enjoy blogging for many reasons such as:
It’s flexible – You can blog from anywhere, anytime.
It’s affordable to start – You just need a computer and internet.
It’s a great creative outlet – Share your thoughts and passions with the world. I enjoy blogging and running a website.
While there are a lot of great reasons to start a blog, there are some challenges such as it can be time-consuming and there is no guarantee that you will make money.
When I first started my blog, I was working over 40 hours a week on it and making nothing. It took me 6 months to make my first $100 from it, actually!
But, it was all worth it in the end.
Blogging used to be my side hustle and it is now my full-time job where I have earned over $5,000,000 over the years.
I would definitely say that blogging is my favorite side hustle.
For me, it was a great second job because I could work on my blog before my day job, during lunch, after work, and on weekends. You can make your own schedule, which is a big bonus!
You can learn more about how to begin in my free How To Start a Blog Course here.
2. Paid online surveys
Paid online surveys are a way to make some extra cash when you have spare time. With just a few clicks and some honest answers, you can see money rolling in.
Companies want to know what customers think about their products and services and that is why they pay for surveys. By sharing your opinions, you help them improve and develop better offerings. In turn, they pay you for your time and insights.
You usually can earn anywhere from $0.50 to $5 per survey, depending on the length and how hard the survey is. And, surveys can take anywhere from around 10 minutes to an hour, so they are not high paying.
I’ve taken a lot of surveys over the years, and what I like about them is that you can do them whenever you want – in the morning, during lunch, before bed – whenever it works for you. There’s no strict schedule, and they are really easy to do.
My tips for success:
Sign up for multiple sites: This increases your chances of getting more surveys and making more money.
Complete your profile: Some survey sites match you to surveys based on your profile.
Be honest: Giving truthful answers ensures you stay eligible for more surveys.
Payment methods are typically cash via PayPal, bank transfer, or free gift cards (such as to Amazon, Walmart, Starbucks, and more).
You won’t get rich from these surveys, but it’s a nice way to earn some side cash. I know that some people think that surveys are a waste of time – but I know several people (including myself) who liked doing them because they are so flexible. I think the right mindset to have is that they will definitely not make you rich, and some can take a long(er) time to earn $5.
The survey companies I recommend signing up for include:
American Consumer Opinion
Survey Junkie
Swagbucks
InboxDollars
Branded Surveys
Prime Opinion
Five Surveys
PrizeRebel
Pinecone Research
3. Focus groups and paid research studies
You can make money by participating in focus groups. Companies pay for your opinions to improve their products and services.
This is similar to paid online surveys, but paid research studies and focus groups typically pay more.
User Interviews is a popular site where you can find paid research studies and focus groups.
Big companies like Pinterest, Spotify, Macy’s, Home Depot, Trip Advisor, and Amazon use User Interviews to get feedback on their new products, apps, and websites.
You can make $50 to $100 per hour, or even more, just by sharing your thoughts and feedback.
I did a user interview myself and got paid $400 for just one hour of work. It was easy, and everything was done online through a video call where they asked for my opinion on a new feature for a website.
Please click here to learn more about User Interviews.
Also, if you’re interested in paid medical research studies, then that can be a high-paying option as well. When my husband was younger, he took part in a few medical research studies to help us make extra money. He usually got paid about $1,000 for a week’s worth of time.
4. Dividends
Okay, so this isn’t exactly a side hustle, but it is a way that you can make more money so I wanted to include it here, especially since it’s one of my favorite ways to increase my income.
Dividends are an awesome way to earn passive income. You don’t need to do much work, and the money comes in. Many companies pay dividends to their shareholders regularly.
Here are a few benefits of investing in dividend stocks:
Regular income: You can receive payments quarterly or even monthly.
Low effort: Once you buy the stock, you don’t have to do much else.
A dividend is a portion of a company’s profits given to its eligible shareholders. You can receive dividends in cash, stock, or even options to buy more stock.
If you own shares in a company that pays dividends, you’ll get a dividend for each share you own.
For example, if you have 10 shares in Company XYZ and they pay $5 in cash dividends each year, you’ll get $50 in dividends for the year. Dividends are usually paid out quarterly, which means 4 times a year. So, in the example, the $5 in yearly dividends would likely be paid as $1.25 per quarter for each share you own.
You can learn more at What Are Dividends & How Do They Work? A Beginner’s Guide.
5. Buy and sell flipping
Flipping items is a great side hustle, and this is when you buy items at a low price and sell them for more.
The benefits of buy and sell flipping include:
Flexibility: You can flip items in your free time.
Profitable: Potential to earn anywhere from $50 to $5000 a month.
Fun: The thrill of finding good deals and making a profit.
I have flipped many items for resale over the years, and I even had a small reselling business at one point. It’s a fun way to make extra money.
While flipping items by buying and selling them for profit can be exciting, it has some downsides. One big risk is that you might not always make a profit, especially if the market drops or you overestimate the item’s value. It can also take a lot of time to research products, find good deals, and manage your listings. There’s tough competition too, as many people are trying to flip items, which can lower prices.
You can learn more at How I Made $40,000 In One Year Flipping Items.
6. Sold clothing
Selling used clothing can be a great way to make extra money. You can find clothes to sell in many places: thrift stores, clearance aisles, garage sales, and even your own closet.
For me, I liked to sell clothing on eBay as well as in person to places like Plato’s Closet. There are many more options these days, such as Poshmark and Facebook Marketplace.
Selling used clothes as a side hustle has its ups and downs. On the plus side, it has low start-up costs because you can start with clothes you already own, and it’s eco-friendly, supporting sustainable fashion. You also get to work on your own schedule, and there’s a high demand for secondhand clothes, especially trendy or vintage items. But it can take a lot of time to sort, clean, photograph, and list the clothes. Plus, shipping costs can cut into your profits, especially for heavier items.
I’ve sold a lot of clothing over the years, both online and in person (I also used to work at a secondhand clothing store for many years). I even had a small clothing resale business at one point, so I have plenty of experience in selling used clothes!
You can learn more at 16 Best Places To Sell Clothes For Cash.
7. Social media management
Social media management is a great side hustle if you enjoy creating content and engaging with people online.
Social media managers handle businesses’ social media accounts like Facebook, Instagram, and Twitter. They create posts, reply to comments, and help grow their followers.
Some benefits include:
Flexible hours: Many times, you can work anytime, making it easy to fit around your main job. This is because you can schedule social media posts to go out at the exact time that you want.
You can be creative: You can express your creativity through different types of content.
Work from anywhere: All you need is a laptop and internet.
But, there are some cons too. This wasn’t my favorite side hustle, mainly because it was stressful at times. It is very time-consuming (creating good content and engaging with followers can take a lot of time), there is constant learning (social media trends change quickly, so you need to keep learning new skills), and some clients may have high expectations and tight deadlines.
If you like being creative and spending time online, social media management can be a fun and rewarding side hustle.
8. Virtual assistant
Being a virtual assistant is one of my favorite side hustles. It’s flexible, and you can work from anywhere. You handle tasks for other people or businesses, like managing emails, scheduling appointments, or doing research.
Why I like virtual assisting:
Flexible hours: You set your own schedule.
Work from home: No need to commute.
Variety of tasks: You can decide what virtual assistant tasks you want to provide.
Working as a virtual assistant is a great way to make extra money. It gives you flexibility, a variety of tasks, and you can get started with just a computer and an internet connection.
You can learn more at Best Ways To Find Virtual Assistant Jobs.
9. Freelance writer
As a freelance writer, you get to write for different clients and websites. You can work from home and set your own hours. This side hustle can be very flexible, especially if you enjoy writing.
I’ve been a freelance writer for many years, and I really enjoy it. I’ve written for lots of different websites and companies, and I’ve made good money doing it.
The positives of being a freelance writer include:
Flexible schedule: You can write during your free time.
You get to decide what you want to write about: You get to write about different topics.
Work from home: No need for a commute.
There are some cons, though, such as income can vary, with some months being busy while others are slower. Finding clients requires actively searching to keep work steady. Plus, meeting deadlines can also be stressful, adding pressure to the job.
Freelance writing is a great side hustle if you love to write and want to make extra money. It takes time to build a steady income, but it can be very rewarding.
You can learn more at 14 Places To Find Freelance Writing Jobs – (Start With No Experience!).
10. Receipt scanning apps
Using receipt scanning apps is an easy way to earn some extra money. You just take a picture of your receipts from shopping, and these apps give you points or cash back. Here are some of the best apps to try:
I’ve been using receipt-scanning apps for years, and I love how easy they are to use. You can earn points or cash without spending much time. Plus, since I already have the receipts, it’s great to make some extra money by doing almost nothing.
My favorite receipt-scanning apps are:
I like to use both Fetch Rewards and Ibotta on all of my receipts (yes, at the same time to stack rewards).
Receipt-scanning apps can be handy, but they do have some downsides. One of the main drawbacks is that the rewards are usually small, so it can take a while to earn a significant amount. You also have to remember to scan receipts regularly, which can be time-consuming and easy to forget.
For me, though, I like to use them on all of my receipts as it only takes a quick moment to do.
11. Mystery shopping
When I had student loans to pay off, I turned to mystery shopping to make extra money. It didn’t make me rich, but it helped increase my income and allowed me to enjoy some free meals and free stuff (like free makeup and household goods).
Mystery shopping involves acting like a regular customer and then reporting on your experience. You might review a restaurant, shop at a store, or even evaluate a phone call. Companies use your feedback to improve their service.
What I like about mystery shopping:
Extra cash (typically $10 to $15 per mystery shopping task)
Free items or meals (you’re usually given an amount to spend in the store or restaurant)
Flexible schedule
Mystery shopping helped me make around $100 to $200 a month.
Joining a reliable mystery shopping company is important, though, as there are a lot of scams. I used Bestmark and had a good experience with them.
Mystery shopping won’t replace a full-time job, but it’s a fun way to make some extra money.
You can learn more at How To Become A Mystery Shopper.
12. Babysitter
Being a babysitter is a flexible side hustle. You can choose your own hours and accept jobs that fit your schedule.
Parents often need help on weekends or evenings, which can be perfect if you are busy during the day.
What I liked about babysitting:
Good pay – around $15 to $25 per hour (depending on where you live)
Helps develop responsibility
Flexible hours
Of course, there are downsides to being a babysitter, such as it can be tiring watching kids for long periods, and sometimes this side job means that you’ll be working late nights or weekends.
I was a babysitter when I was younger and I really liked it. The kids I babysat were fun to be around!
13. Coaching
Coaching can be a great side hustle. You get to help people grow and achieve their goals. It also offers flexibility because you get to be your own boss and decide your work hours.
I used to offer blog coaching in the past, and I enjoyed helping people learn how to grow their blogs and make money blogging.
It was also really easy for me to do, as I have been blogging for many years and have learned a lot about what to do and what not to do.
If you have the expertise and enjoy motivating others to improve, then there is probably a topic that you can coach others on.
14. Course creator
Creating an online course can be a game changer for your income. I launched my first course, Making Sense of Affiliate Marketing, in July 2016. Within the first year, it brought in around $434,698. This wasn’t due to any fancy marketing techniques but mainly through word-of-mouth.
Even though the course was successful, it didn’t come easy. I was nervous about it, especially since it was my first. I had worries that no one would be interested. Plus, many people said that your first course usually isn’t great.
Yet, the desire to help others understand affiliate marketing kept me going. By sharing my knowledge, I aimed to help bloggers increase their income. Online courses are beneficial because they can include interactive materials, workbooks, and community support, which go beyond what an ebook offers.
Here are some success stories from my course:
One student increased their monthly income from $272 to $4,400.
A new blogger got their first affiliate sale just two days after taking the course.
Another went from earning $87 a month to over $1,700 the next month.
And I have helped countless bloggers earn well over $100,000 a year from their blog and turn it into a full-time income.
Creating a course is a lot of work, but it can also be very rewarding. It allows you to reach a wider audience and can become a substantial income stream. If you have knowledge to share, you may want to try creating your own online course.
This is a business idea that I recommend more people start! I enjoy taking courses from people and sign up for them all the time. I love learning, and so do others.
You can learn more at How I’ve Made Over $1,000,000 From My First Course Without a Big Launch.
15. Affiliate marketing
Affiliate marketing is one of the most popular side hustles. It’s easy to start and doesn’t need a lot of money up front.
You promote products and earn a commission for every sale made through your referral link. This can be done on social media, a blog, a YouTube channel, and more.
What I like about affiliate marketing:
Low start-up cost: You don’t need much money to start.
Flexible schedule: Work when you want.
Passive income: You can earn money even when you’re not working.
Affiliate marketing can be a fun and profitable side hustle. Just remember to stay patient and persistent!
You can learn more at What You Need To Know About Affiliate Marketing For Beginners.
This small house we owned had 4 bedrooms and we rented out two of them.
16. Rent out a room in your home
Renting out a room in your house can be a simple way to make extra money. If you have unused space, like a spare bedroom or basement, you can turn it into a rental.
I have had several roommates in the past, and I liked this side hustle a lot.
What I liked about making extra money by renting out a spare room:
Extra income to help pay the mortgage
If you have unused space, then this can be a good way to fill it
Of course, there are challenges to having a roommate, and it isn’t always perfect. Sometimes, it can be hard to share common spaces (like the kitchen and bathroom), and it can also take time to adjust to someone else’s lifestyle.
Renting out a room isn’t for everyone, but it can provide steady income with minimal effort.
17. Shop at cash back websites
Shopping at cash back websites is an easy way to earn extra money. These sites give you a percentage of your purchase back as cash. You just have to sign up, shop through their site, app, or browser extension, and earn rewards.
I like cash back sites because they are easy to use and you don’t have to pay anything extra for using them.
Shopping through cash back sites can give you a nice little bonus on things you already planned to buy. It’s like getting paid to shop.
My favorite cash back sites are:
Rakuten (for online shopping like clothing, home goods, etc.)
Upside (for gas)
Honey (for online shopping like clothing, home goods, etc.)
Fetch Rewards (for groceries)
18. Earn credit card rewards
Using credit cards (the smart way) can help you earn rewards like cash, travel points, and more.
I’ve been using rewards credit cards for years, and now they’re the only cards I use. They help me save money on travel, earn cash back, and more.
By choosing the right credit card and using it wisely, you can enjoy great rewards and make the most of your spending.
Remember, carrying a balance on your credit card can lead to interest charges, which can outweigh the benefits of rewards. Always try to pay off your full balance each month to avoid these fees.
You can see my favorite credit card rewards at Best Rewards Credit Cards For This Year | What You Need To Know.
19. Brand ambassador
Being a brand ambassador is one of the more popular side hustles.
You represent a company and help promote its products. Often, you act as a public spokesperson. You can find opportunities on Facebook and many cities have brand ambassador groups where gigs are posted.
Brand ambassadors can earn between $15 to $20 per hour. Some high-end gigs can pay up to $100 per hour.
Benefits of this side hustle include flexible hours and the chance to work for brands you like. You may be able to get free products or swag, too, and this is one thing I really liked about being a brand ambassador in the past.
20. Newspaper delivery
Delivering newspapers can be an easy way to make money. It’s a job you can do before school or work, and it lets you get exercise too. You may drive, ride your bike, or walk to each house and leave the newspaper by the door.
The benefits of newspaper delivery include:
Exercise: If you walk or ride your bike, you can get plenty of fresh air and exercise.
Scheduling: Most routes are in the early morning, so you still have the rest of the day free.
Tips: Some customers might give you tips during holidays or for good service.
But, there are some downsides, with the main one being that you typically have to wake up really early for this job. For newspaper delivery, you usually have to wake up very early in the morning, often around 3:00 to 5:00 AM. The exact time depends on how big your delivery route is and what the newspaper company requires. The goal is to have all the newspapers delivered by the time most people wake up, usually around 6:00 or 7:00 AM, so starting early is really important.
The other main negative is that a big collection of newspapers is, of course, heavy!
When I was younger, I helped a friend’s family with their newspaper run whenever I slept over at their house. They used their van to deliver a bunch of newspapers, and I got to tag along.
21. Help others with their resume
Helping others with their resume can be a rewarding side hustle. You can earn extra money while also making a big difference in someone’s job hunt.
When I was in my last year of college as well as about a year after I graduated, I helped several people with their resumes. I didn’t charge a lot (and many times worked for free or for a free meal), but I liked looking at resumes and finding ways to make everything sound better.
I was also really good at it and it came so easy to me!
Some benefits of this side hustle include:
Flexibility: You can do this from home.
High demand: Many people need help with their resumes.
Work at your own pace: There’s no rush, and you can take on as many clients as you want.
By helping others with their resumes, you can earn money and provide help. It’s a great way to use your skills and make a difference in someone’s life.
22. Enter contests and giveaways
Entering contests and giveaways can be a fun and rewarding side hustle. You will definitely not win every time, but the more you enter, the higher your chances. People have won cash, gift cards, vacations, and electronics through these events.
You can spend a little time each week entering different contests. You can find them online, on social media, and in emails from brands you follow. Some people set aside about an hour each week to enter as many as they can find.
I found success this way. For example, I once won $10,000 from a financial blog’s anniversary contest, and this was a major win early on in my side hustle journey.
Remember, entering contests should be fun. Think of it as a hobby that could pay off with some great surprises. You most likely won’t get rich nor win the lottery doing this.
This is a screenshot from this month. I earned around $300 playing games on my phone.
23. Rewards sites (GPT sites)
Rewards sites, also known as GPT (Get-Paid-To) sites, are platforms where you can earn money by doing simple tasks online.
Tasks you might do include:
Taking surveys
Reading emails
Playing games
Shopping online
Trying new apps and services
Clicking ads
Rewards sites have been around for a while and have proven to be a reliable way to earn some extra cash. Though the payouts are often small, they can add up over time. For instance, Swagbucks has paid out over $80 million to its users.
Using multiple sites can help maximize your earnings. It’s easy to do tasks during your free time, making it a flexible way to earn money without a huge time commitment.
It’s key to choose reputable sites to make sure that you get paid for your efforts, so I recommend that you stick with popular, well-reviewed platforms to avoid scams.
Rewards sites will most likely not replace a full-time income, but they can be a fun way to get some extra spending money.
Here’s a quick list of the best GPT sites:
24. Test websites (User Testing)
Testing websites, also known as user testing, is a popular side hustle. You get paid to visit a website or app and give feedback on your experience.
You will need a computer, a reliable internet connection, and sometimes a microphone.
User testing is flexible. You can do it in your free time from the comfort of your home. This side hustle is great if you like trying new things and providing feedback.
I have personally been paid to do user testing in the past, as well as paid others to do user testing on this very website, Making Sense of Cents. I thought it was an easy side hustle where you just share what you honestly think of a website.
25. College textbook resale
Selling your college textbooks is a great way to make some extra money.
When I was in college, I sold all of my college textbooks once I was done, and I always tried to make the most money (so, that typically meant that I never sold it directly back to my college bookstore, because they usually paid the least amount).
Reselling college textbooks as a side hustle has its ups and downs.
On the plus side, there’s a high demand for cheaper, used textbooks, so you can make good money if you buy low and sell high. It’s easy to start, especially if you begin with your own used books, and it’s a great way to encourage reusing materials.
But the market is seasonal, with most demand at the start of each semester, so your income might be inconsistent. New editions can come out, making older books less valuable, and storing a lot of books can be tough. Plus, shipping heavy textbooks can cut into your profits if you’re not careful.
Recommended reading: 17 Best Places To Sell Used Books For Cash
Frequently Asked Questions
Below are answers to common questions about finding the best side hustle.
What are the top side hustles that can bring in good money?
Top side hustles that can bring in good money include freelancing, blogging, flipping items for resale, and renting out rooms in your home.
How can I find side hustles that pay me every week?
You can find weekly pay side hustles through gig economy platforms like Uber, Lyft, and DoorDash. Freelancing on websites like Upwork or Fiverr might also pay weekly, depending on your agreement with clients. Another option is finding part-time jobs at local businesses that pay weekly wages.
Can you suggest some side hustle ideas I can do from my house?
There are several home-based side hustles. You can start freelancing in areas like writing, graphic design, or social media management. Another idea is to sell virtual assistant services. Teaching online courses or tutoring students in subjects you excel at is also a great way to earn from home.
What side jobs are out there for someone with no experience?
There are many side jobs for beginners. You can try pet sitting or dog walking through apps like Rover. Babysitting is another option if you like spending time with children. Delivery driving for companies like Uber Eats or Instacart doesn’t require much experience and can be started quickly too.
My Favorite Side Hustles – Summary
Now that we have gone over my full list, I want to talk about one of the main deciding factors of a side hustle.
Your time is important. Some side jobs take a lot of time but don’t pay well, while others pay more with less time.
Think about how much free time you have after your main job and how much money you want to make. This balance is very important. Track the hours you work and the money you earn to see if it’s worth it. The best side job fits into your life without stressing you out.
Also, another important deciding factor is choosing a side hustle that aligns with your skills and lifestyle. If you’re good at something, you’re likely to enjoy it more and perform better.
So, I recommend thinking about your current skills and hobbies. Matching your side hustle to your skills makes it easier and more enjoyable. Plus, you’re more likely to find success and earn extra income.
At the risk of jinxing it, things are looking up for home buyers.
The average rate on a 30-year fixed rate mortgage has dropped for three consecutive months (and counting). Competition has calmed down a bit — and inflation has, too. And while we’re still technically in a sellers’ market, the inventory of homes for sale in June reached its highest level in more than four years.
Hoping to buy in 2024? If you’re well prepared with a budget and a mortgage preapproval, you might not even need to knock on wood. Let’s look at the good news, the challenges and the wild cards that remain for home buyers this year.
Good news: Mortgage rates drop to a one-year low
Finally, some relief: In the week ending Aug. 15, 30-year mortgage rates dropped to an average 6.28%, their lowest weekly average since February 2023. That’s welcome news for shoppers who have felt burned by high rates — or maybe even put their house hunt on ice until the cost of borrowing cooled down.
Over the past two years, buyers have been at the mercy of mortgage rates’ meteoric rise, holding on as the average 30-year fixed rate climbed from 3% to nearly 7% in 2022. In October 2023, rates topped 8% for the first time since 2000 — a surprise even many top economists didn’t predict. Higher interest rates make it more expensive to get a mortgage.
To put that in perspective: Let’s say you can afford $1,800 per month in principal and interest. At a 7% interest rate, you could afford to borrow $270,600. But at a 6% interest rate, you could afford to borrow $300,200 — nearly $30,000 more — for the same amount per month. When interest rates go down, home shoppers’ purchasing power goes up.
For now, economic signals suggest more positive news for buyers in the latter half of 2024. Dan Moralez, regional vice president at Dart Bank in Holland, Michigan, points to a cooling economy and a potential cut to the federal funds rate. “All of that stuff really lends itself to mortgage rates getting better and the cost to borrow getting cheaper, which is really good for those people who have maybe sat on the sidelines hoping to see rates get better,” Moralez says.
More good news: It’s nearly certain the Federal Reserve will cut the federal funds rate by at least 25 basis points at its next meeting Sept. 17-18, according to CME Group’s FedWatch tool. (A basis point is one one-hundredth of one percent.) While the Fed doesn’t set mortgage rates directly, the federal funds rate influences the cost of long-term loans, including mortgages.
Your strategy: If you’re ready to buy, jump in now
A potential Fed rate cut is welcome news, but in the meantime, it’s not a reason to put off your search. Changes take time to trickle down, so avoid the self-induced pressure of timing the market perfectly. Instead, focus on shopping within your budget right now.
Also: When rates go down, competition goes up — another reason there’s no time like the present to start house hunting.
Whichever way rates move in the remainder of 2024, you’ll save money if you shop around. Aim to get an estimate from at least three mortgage lenders. The Consumer Financial Protection Bureau estimates borrowers can save $100 per month (or more) this way. And look at the annual percentage rate, or APR, to understand the total cost of the loan, which includes fees and other charges.
One final tip about rates: Do your research before picking a mortgage lender with the flashiest discount. This year, some lenders have been advertising “buy now, refinance later” offers. Others are offering temporary buydowns, where the buyer’s effective monthly payment is reduced for a year (or a few). Each option could potentially save money, but Moralez says it could also be “smoke and mirrors” if the deal is offset by higher fees.
“It’s one of those things where I tell folks, ‘There’s no free lunch, OK?’” he says. “You know, somebody is paying for it somewhere.”
Good news: More inventory, less intense competition
Recently, the supply of homes for sale could be summed up in two words: Slim pickings.
But in June, shoppers got some good news: The number of existing homes for sale reached a four-year high, according to the National Association of Realtors (NAR). Nationwide, there was a 4.1-month supply of homes for sale, meaning it would take just over four months at the current pace for all properties to sell. The U.S. market hasn’t seen that much housing inventory since May 2020, when the supply was 4.5 months.
Demand still outpaces supply, but with more homes to choose from, buyers are less likely to encounter intense bidding wars reminiscent of the pandemic years. Houses for sale are getting fewer offers compared to last year, according to the NAR’s June 2024 Realtors Confidence Index, a survey of its members. In June, a home listed for sale received an average 2.9 offers, compared to 3.5 offers in June 2023.
Another sign of cooling competition: Houses are staying on the market longer. In June, 65% of homes sold in less than a month, compared to 75% at the same time last year. The median time on the market in June was 22 days, a full four days longer than June 2023, when the median time on the market was 18 days.
With pending home sales also on the rise in June, NAR Chief Economist Lawrence Yun says he expects to see even more houses getting listed ahead of typical seasonal declines in winter. “The rise in housing inventory is beginning to lead to more contract signings,” Yun said in a news release. “Multiple offers are less intense, and buyers are in a more favorable position.”
Your strategy: Cast a wide net
While an improvement from recent years, a 4.1-month supply of homes for sale is still technically a seller’s market. A balanced market has about a six-month supply of homes for sale; a buyer’s market has more than six months’ worth.
You can’t control who puts their house on the market, so in the meantime, focus on the options available now. Let go of the fantasy of finding the perfect home when a “good enough” home can get your foot in the door sooner. That’s especially true for first-time home buyers who are eager to build equity.
“Last year, we certainly didn’t have enough houses — and we still don’t,” says Ellie Kowalchik, a real estate agent who leads the Move2Team with Keller Williams Pinnacle Group in Cincinnati, Ohio. “Don’t wait until the spring to start looking.”
For now, maybe you expand your search to include condos or townhouses. Maybe you settle for fewer bathrooms or a dated interior. Keep your chin up — even if you have to tolerate less square footage or weird linoleum floors for a while, you’ll have equity to remodel or sell in a few years.
Still challenging: Home prices climb to record highs
While some aspects of homebuying have gotten easier as 2024 rolls on, one challenge remains: home prices. The sales price of existing homes has risen for 12 straight months, according to the NAR. In June, the national median sales price hit a record high of $426,900.
As more inventory hits the market, though, the degree of home price growth has slowed somewhat over the summer, according to an August 2024 report from ICE Mortgage Technology. Still, if you compare the cost of buying a house to the median household income, July 2024 was one of the least affordable months to buy a home in more than three decades. Why? Home prices are growing faster than wages, and on top of that, high mortgage rates increase the cost of borrowing.
Until supply catches up to demand, prices are unlikely to fall. Realtor.com estimates prices will fall less than 2% by the end of 2024. No one can predict exactly what the market will do, but if you’re an optimist, there’s reason to be hopeful that prices are reaching a plateau.
“Even as the median home price reached a new record high, further large accelerations are unlikely,” Yun said in a press release. “Supply and demand dynamics are nearing a balanced market condition.”
That’s another reason to jump in now: A big drop in prices could trigger more competition.
Your strategy: Make a budget and stick to it
If you’re Zillow-stalking houses you can’t afford, stop. Instead, channel that energy toward your plan to shop for a house in real life — starting with setting a realistic budget.
First, talk to a financial advisor or use an online calculator to see how much house you can afford. Understand how mortgage lenders will determine your eligibility, including analyzing your credit score, cash savings and monthly debt payments.
Next, find a buyer’s agent who knows how far your budget can go in your local market. An experienced agent can advocate for you and help you snag a good deal.
Wild card: Changes to real estate commissions
One of the year’s biggest shakeups has been a major legal settlement with the NAR, which changes the way your buyer’s agent gets paid. While the NAR admitted to no wrongdoing, it will pay $418 million to settle more than a dozen antitrust lawsuits accusing the organization of enforcing rules that inflated real estate commissions. These changes take effect Aug. 17.
Previously, home sellers generally set the agents’ commission — typically 5% to 6% of the home sale price that was then split between the buyer’s and seller’s agent. Now, a new system is in place: You’ll have to sign a contract with your buyer’s agent, which spells out the terms of how they get paid.
For now, many real estate brokerages will likely stick with the familiar commission structure of a percentage of the sales price. But the settlement opens the door for new ways for agents to get paid, such as a flat fee or an hourly rate. Time will tell what becomes the new standard.
Your strategy: Brush up on your negotiating skills
When hiring a buyer’s agent, be polite but firm when negotiating. If the commission is more than you want to spend, ask if the agent would be willing to lower it. Point out any fees you don’t understand. And if you still aren’t comfortable with the terms, it’s OK to shop around or walk away.
While the new rules are more complex, they also give you, the buyer, more leverage in negotiating for your best interests. Buying a home is a big journey, and when you sign that contract with a buyer’s agent, you should feel supported and empowered about the business relationship that lies ahead.
The bottom line: Set realistic expectations
Things are looking better compared to the beginning of this year, but if you haven’t found a house yet, it’s fair to feel bummed out about high costs and complexity.
The solution: Think long-term. Holding out for lower rates or “perfect” buying conditions likely means you’ll face steeper prices and more competition. So if you’re determined to buy, find a place that suits your needs and budget as-is. Expecting perfection often means setting yourself up for disappointment.
“Sometimes I have clients that think they’re going to hit a home run the very first house they buy,” Moralez says. “And a lot of times I tell clients, well, sometimes it’s OK to be happy just getting on base.”
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The report has outlined that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac absorbed the largest portion of the multifamily loan volume, accounting for 42% of the total amount. The top five lenders in this sector by dollar volume were Berkadia, Walker & Dunlop, JP Morgan Chase & Company, CBRE, and Greystone. In addition … [Read more…]
The FHA Streamline Refinance program is a simplified version of a mortgage refinance for borrowers who already have a loan backed by the Federal Housing Administration (FHA). It’s possible for borrowers to refinance without a new property appraisal, credit check, or income verification — but owners do have to be current on their existing FHA mortgage.
The FHA Streamline Refinance does have its limitations. For example, if you need cash out or want to eliminate the mortgage insurance premium, you can’t do it with the FHA Streamline Refinance and you’ll need to find another mortgage type.
We’ll explore exactly what is an FHA Streamline Refinance, how it works, what the requirements are, the process of getting one, and what the benefits are to help you determine if this program is right for you.
What Is an FHA Streamline Refinance?
An FHA Streamline Refinance refinances an existing FHA loan into a new FHA loan with limited credit and underwriting requirements for the borrower. It’s faster and sometimes cheaper to obtain than a full refinance, especially since it doesn’t require a new appraisal.
Typically, the main goal is to lower monthly payments by refinancing to a lower interest rate, but if the mortgage term is reduced or the loan type is changed to a fixed-term loan, that could also be considered a “net tangible benefit” of the refinance by the FHA.
There are two types of FHA Streamline Refinance: credit qualifying and non-credit qualifying.
Credit Qualifying
As the name implies, your credit and income are used to qualify for an FHA Streamline Refinance and for the lowest interest rates. An appraisal isn’t needed for this type of refinance.
Non–Credit Qualifying
A non-credit qualifying mortgage doesn’t require the lender to assess your credit or ability to repay the loan, but all borrowers on the original loan must remain on the new loan. Like the credit-qualifying refinance, a non-credit qualifying one doesn’t require an appraisal, but there are other eligibility requirements.
Recommended: FHA Loan Buyer’s Guide
Eligibility Requirements for FHA Streamline Refinance
To qualify for an FHA Streamline Refinance, the borrower must derive a “net tangible benefit” from the refinance, such as a lower interest rate, a shorter loan term, or a switch from an adjustable-rate mortgage to a fixed-rate mortgage. If you’re considering a refinance, you might want to run your numbers through an FHA loan calculator to see if a refinance will save you money.
Other requirements relate to the loan type, occupancy, credit score, and payment history.
Loan Type
The loan being refinanced must be an existing FHA loan. The refinanced loan will remain an FHA loan, which means you’ll still need to pay mortgage insurance. If you’re current on your payments, it could make sense to take a look at other types of mortgage loans beyond FHA.
Occupancy Status
An FHA Streamline Refinance can be used in the following occupancy scenarios:
• Owner-occupied one- to four-unit properties
• HUD-approved second homes
• Investment properties with existing FHA-insured mortgages
Credit Score and Payment History
There is no credit score requirement for the FHA Streamline Refinance under the non-credit qualifying option. However, FHA Streamline Refinance rates can be better for those who use the credit-qualifying option and supply credit qualifications to the lender.
Borrowers do need to have made at least six payments and wait 210 days before applying for a refinance on their FHA loan. Borrowers must also be current on their mortgage payments with no delinquencies.
Recommended: Minimum Down Payment for an FHA Loan
Benefits of an FHA Streamline Refinance
Here are a few of the ways in which a homeowner may benefit from the FHA Streamline Refinance program:
A Lower Interest Rate
For borrowers who bought a home when their credit was bent out of shape or interest rates were high, FHA Streamline Refinance rates could be lower than the rate they currently have.
A Different Loan Type
If you have an adjustable-rate mortgage, the FHA Streamline program can change it to a fixed-rate mortgage and help stabilize your payments.
Remove or Add a Borrower
If you need to remove a borrower from the loan, such as the case with death, divorce, or separation, you may be able to do it with a streamline refinance. This may be done if the borrower can supply supporting documentation, such as a divorce decree.
Pay Off a Loan Faster
By refinancing to a shorter loan term, you’ll likely pay off the loan faster and save yourself a good amount of money.
Avoid an Appraisal
The FHA Streamline Refinance uses the value of the home from the original FHA mortgage, with a maximum loan amount of the existing loan balance. Because these numbers don’t need to be adjusted upwards, no new appraisal is needed.
Reduce Closing Costs
There are costs involved with an FHA Streamline Refinance, but they may be less due to the reduced requirements. For example, you do not need to pay for an appraisal with an FHA Streamline Refinance.
Close Quickly
With reduced documentation and underwriting requirements, and no appraisal required, it’s possible to close on the loan relatively quickly.
FHA Streamline Refinance Process
The FHA Streamline program reduces the documentation and underwriting requirements for the lender, which usually translates into a quicker refinancing process. Here’s what you’re looking at when it comes to documentation, timeline, and costs.
Documentation Needed
Your lender will be able to see your payment history with a credit check, but there are a few more documentation requirements. If you’re applying as a non-credit qualifying borrower, these include:
• Residency verification, such as a utility bill in the occupant’s name
• Evidence of payment history for the past 12 months
• If a secondary residence, approval from jurisdictional FHA Homeownership Center
If you’re applying with a credit-qualifying mortgage for the lower rate, you’ll likely need to provide the typical documentation required by the lender, such as:
• Credit score and history
• Proof of income and employment history
• Bank statements
• Debt obligations
• Assets
Lenders use this information to determine if you have enough income to qualify for the loan, what rate you qualify for, and to verify funds to close the loan.
Refinancing Timeline
An FHA Streamline Refinance takes less time because there’s no appraisal required. In a general sense, the process looks something like this:
• Find FHA-approved lenders. For an FHA Streamline Refinance, lenders must be approved by the FHA as a direct endorsement lender to qualify.
• Apply. Talk with lenders to see if your situation fits with this type of mortgage. Apply with your top choices, noting the closing costs and interest rates offered by lenders.
• Submit documentation. Since there are fewer forms to find and submit, you may be able to complete your part of the application faster.
• Wait for underwriting. Since the loan isn’t contingent upon an appraisal, income, or credit, your loan will be ready to process more quickly than other types of loans. Alas, it’s still a government-backed loan, so you could be waiting 30 days or more.
• Close on the loan. Once underwriting has approved your loan, you can close and start making your new payment.
Upfront and Closing Costs
When you refinance with an FHA loan, you’ll need to pay an upfront mortgage insurance premium on the new FHA loan. You may be able to get a refund on a part of your mortgage insurance premium that you previously paid.
You also need to pay other closing costs, such as title insurance. Since the loan amount can’t be greater than the existing loan balance, these closing costs cannot be wrapped into the loan. However, you may see lenders offer no-closing-cost loans in exchange for a higher interest rate.
The Takeaway
An FHA Streamline Refinance makes sense in certain situations, but it’s not always the right option. Going through the FHA Streamline process makes sense if you don’t want your credit pulled or you’re looking to save time or money on a refinance. These types of refinances don’t require an appraisal and there are fewer closing costs as a result.
However, you can’t get rid of your monthly mortgage insurance payment and you won’t be able to refinance to a higher loan amount if you need more than $500 cash out. It’s common to see borrowers refinance to conventional mortgages over FHA mortgages to eliminate mortgage insurance and take cash out.
It all comes back to your goals. If you want a mortgage without the mortgage insurance premium or need cash out, you’ll want to look into other types of mortgages. But if you want to keep an FHA mortgage and go through minimal underwriting, then an FHA Streamline may be the right move for you.
SoFi offers a wide range of FHA loan options that are easier to qualify for and may have a lower interest rate than a conventional mortgage. You can down as little as 3.5%. Plus, the Biden-Harris Administration has reduced monthly mortgage insurance premiums for new homebuyers to help offset higher interest rates.
Another perk: FHA loans are assumable mortgages!
FAQ
Can you remove mortgage insurance with an FHA Streamline Refinance?
No, you can’t remove mortgage insurance from an FHA Streamline Refinance. All FHA loans require mortgage insurance, even if you’re replacing one FHA loan with another.
How long does an FHA Streamline Refinance take?
Give it around 30 days. How long it takes to close on an FHA Streamline Refinance depends a lot on your lender, and it can be quicker due to the limited underwriting requirements. When there’s no appraisal, no loan-to-value ratio, and no credit requirement, the loan can be completed faster than when it was originally funded.
Can you get cash out with an FHA Streamline Refinance?
The maximum amount of cash you can take out from an FHA Streamline Refinance is $500. If you need more, you’ll want to look for another mortgage.
Photo credit: iStock/Jacob Wackerhausen
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¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Mortgage rates mostly leveled off in the week ending Aug. 15, following last week’s comparatively precipitous drop.
30-year fixed-rate mortgages fell one basis point to 6.28%. A basis point is one one-hundredth of a percentage point.
While rates may be cooling slightly, home prices continue to heat up around the country.
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Median home prices hit mega millions in some metro areas
The sale prices of single-family existing homes rose in the second quarter of 2024 in 89% of tracked metro areas, according to the National Association of Realtors (NAR).
Within these areas, three metros saw price gains of nearly 20%: Racine, WI (19.8%), Glen Falls, NY (19.8%) and El Paso, TX (19.2%). The national median single-family existing-home price grew 4.9% from this time last year, reaching $422,100.
Seven of the top 10 most expensive metros at the end of Q2 are in California. The most expensive metro measured was San Jose-Sunnyvale-Santa Clara, where the median home price grew 11.6% to an eye-watering $2,008,000.
NAR Chief Economist Lawrence Yun acknowledged that this is a boon for homeowners who continue to see their equity bloat, while would-be buyers face an even steeper climb up the economic ladder. “It’s difficult for those wanting to buy a home as the required income to qualify has roughly doubled from just a few years ago,” he said.
In fact, the national median home sale price is $100,000 more than in Q2 2019, in which the St. Louis Federal Reserve pegs at $322,500. That’s an increase of nearly 31% in just five years. To add additional perspective, the average 30-year mortgage rate never went above 4.65% in all of 2019, compared to 2024’s peak (so far) of 7.448% in May.
While price growth may seem discouraging, it is decelerating
Those in the market to buy a home may find these numbers disheartening, but price growth is ever-so-slightly slowing down. The national median home price increased 4.9% in Q2, compared to 5% in Q1. And though sale prices rose in 89% of tracked metro areas in Q2, this is down from 93% in Q1.
10% of tracked metro markets actually saw price declines, up from 7% in Q1.
If you’re planning to purchase a home, there are steps you can take now to maximize affordability — namely, shopping around for the best rate.
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