Mortgage rates fell below 7% last week for the first time since March — leading to an uptick in the number of applications for loans from would-be home buyers.
The rate for a 30-year fixed mortgage fell from 7.02% to 6.94% for the week that ended June 14, according to Mortgage Bankers Association data released on Wednesday.
The five-year adjustable-rate mortgage fell to 6.27% from 6.45% — the lowest level since February, according to the data, which was first reported by Bloomberg News and MarketWatch..
Mortgage rates fell below 7% last week for the first time since March. Getty Images
There was also an increase in the number of mortgage applications for home purchases in the seven-day period that ended on Friday.
The market index rose 0.9% to 210.4 for the week ending June 14 from a week before. A year ago, the index stood at 209.8.
“Purchase applications increased a small amount for the week, led by applications for conventional loans,” Mike Fratantoni, MBA chief economist, said in a statement.
Federal Reserve is more likely to cut interest rates sometime this year.
Investors are banking on at least one rate cut.
Last week, Fed officials said that while inflation has crept closer to their 2% target, they still expect to cut their benchmark interest rate just once this year — possibly as late as December.
The housing market has been in a slump which has been exacerbated by sky-high interest rates and sticky inflation. REUTERS
The policymakers’ forecast for one rate cut was down from their previous projection of three cuts.
Inflation has remained stubbornly high, forcing the Fed to keep the benchmark rate between 5.25% and 5.50% — the highest in 23 years.
The benchmark rate has remained at that level since July of last year, after the Fed raised it 11 times to try to slow borrowing and cool inflation.
High mortgage rates and rising prices continued to put a damper on the spring home-buying season.
Existing home sales fell 1.9% to a seasonally adjusted annual rate of 4.14 million in April from a revised 4.22 million in March, the National Association of Realtors reported.
An anticipated interest rate cut by the Fed could spur more home-buying. REUTERS
Sales dropped across the country — down 4% in the Northeast, 2.6% in the West, 1.6% in the South and 1% in the Midwest.
The median price of previously occupied homes rose 5.7% to $407,600 — the tenth straight increase and a record for April.
Lawrence Yun, the association’s chief economist, called the sales drop “a little frustrating.’’ Economists had expected sales to come in at 4.2 million.
FHA loans have made their mark as Federal Housing Administration-insured mortgages whose generous terms make homeownership accessible to many borrowers. They come with either a fixed or adjustable interest rate.
The latter, known as FHA ARMs, are very much a niche product – less than 1 percent of FHA loans originated in April 2024 had adjustable rates, according to federal data. But they offer a lot of benefits, particularly a low introductory rate.
Before signing on the dotted line for an FHA adjustable-rate mortgage (ARM), however, it’s important to know what’s involved and how these types of mortgages work. Here are the basics of FHA ARMs.
What is an FHA adjustable-rate mortgage?
First, here’s a quick primer on how ARMs and FHA loans work.
An adjustable-rate mortgage, or ARM, is a type of home loan with an interest rate that changes over time. It has a lower fixed rate at the start of the repayment period, which usually lasts three, five, seven or 10 years. Afterward, the rate adjusts at predetermined intervals, such as every six months or one year, up to a certain percentage limit. This means your monthly mortgage payment could increase or decrease over the remaining loan term. If the payment goes up, it might no longer be affordable. For this reason, lenders typically qualify ARM borrowers based on their ability to repay a higher payment.
FHA home loans are insured by the Federal Housing Administration (FHA) and offered by FHA-approved mortgage lenders. These loans are geared toward lower-credit score borrowers, including first-time homebuyers, who often wouldn’t qualify for a conventional loan with no federal guarantee. FHA loans only require a 3.5 percent down payment but mandate the borrower to pay mortgage insurance premiums (MIPs). They also limit how much you can borrow.
FHA loan rates often run lower than conventional mortgages too, but sometimes the presence of their various fees (including the MIPs) actually makes their APRs higher.
How do FHA ARM loans work?
An FHA adjustable-rate mortgage works similarly to other adjustable-rate mortgages: The interest rate initially remains the same for a set time, then changes at preset times until the borrower fully repays the loan.
These changes are based on an index of prevailing interest rates — for FHA loans, either the Constant Maturity Treasury (CMT) index or the Secured Overnight Financing Rate (SOFR) — plus a margin, or extra amount, that the lender opts to add on. After the loan’s initial fixed period ends, the lender adds this margin to the index to come up with new rates. Depending on current economic conditions and prevailing interest rates, the adjusted rate might be higher or lower.
Your rate can’t increase or decrease beyond a specific amount, however. On ARM loans, there are both annual and lifetime caps, which limit annual rate changes, as well as changes over the loan’s entire term.
Types of FHA ARM loans
There are five kinds of FHA ARM loans:
1-year FHA ARM: Your interest rate stays the same for the first year of the loan’s term. After that, the rate can only increase by one percentage point (for example, 5.5 percent to 6.5 percent) per year and five percentage points for the life of the loan.
3-year FHA ARM: Your interest rate stays the same for the first three years, but the caps are the same as the 1-year ARM.
5-year FHA ARM: Your interest rate stays the same for the first five years. After that, the rate can only increase annually by one percentage point, and by five percentage points over the life of the loan; or by two percentage points annually and six percentage points over the life of the loan.
7-year FHA ARM: Your interest rate stays the same for the first seven years, then can adjust by up to two percentage points per year and six percentage points over the life of the loan.
10-year FHA ARM: Your interest rate stays the same for the first 10 years, but the caps are the same as the 7-year ARM.
There is also a difference between standard and hybrid ARM loans. The FHA has a one-year standard ARM loan, whose interest rate changes regularly based on the market. In addition, the FHA has four hybrid ARM loan products. These hybrid loans have a fixed introductory rate for a set number of years (3, 5, 7 or 10), after which the rate will adjust after a set period for the remainder of the loan term.
FHA ARM loan requirements
Borrowers and the homes they wish to buy must meet certain FHA loan qualifications, including:
Acceptable properties: Primary residences
Borrowing limit: For 2024, $498,257 for a one-unit property; $1,149,825 for a one-unit property in high-priced housing markets
Credit score: At least 580, or as low as 500 with a bigger down payment
Debt-to-income (DTI) ratio: 43 percent for housing and other long-term debt (some lenders may go up to 50 percent if the borrower has compensating factors); 31 percent for just housing debt.
Down payment: 3.5 percent with a credit score of 580 or higher; 10 percent with a credit score of 500-580
Employment: Proof of steady employment from the past two years
Income: Latest pay stub along with proof of any bonuses, commissions, etc., if consistent
Mortgage insurance premiums (MIP): 1.75 percent of the amount borrowed at closing, plus annual premiums based on the amount borrowed, down payment and loan term (15 or 30 years)
If your credit history is lacking, especially in the realm of handling debt, the FHA now allows lenders to include a borrower’s rental payments in their underwriting assessment, as well. You need to be able to show proof you’ve paid your rent on time every month for the past year.
FHA ARM loan rates
ARMs’ introductory rates tend to be lower than those of fixed-rate loans. As of June 13, 2024, the average interest rate for 5/1 ARM loans is 6.48 percent, compared to the average rate of 30-year fixed-rate mortgages at 7.08 percent, according to Bankrate’s survey of national large lenders. Even a 7/1 ARM loan has an interest rate of 6.72 percent.
When comparing FHA ARM offers, consider the introductory rate along with the lender’s margin. Generally speaking, the lower the margin, the better.
With rates rising, consider the type of FHA ARM, as well. The one-year and three-year ARMs, for example, have lower caps, meaning you won’t see as big of a jump in your rate if prevailing rates do go up in the future.
Should you get an FHA adjustable-rate mortgage?
If getting a lower initial interest rate will help you afford a home, choosing an FHA adjustable-rate mortgage can be a good option — as long as you factor in your ability to afford potentially higher payments later. An FHA ARM loan can also be a smart option if you only plan to own your home for a couple of years. You can take advantage of the lower introductory rate and then sell your home before the rate adjusts. Even if you do not sell your home, you might be able to refinance your loan into a fixed-rate mortgage, which will keep your monthly payments the same for the remainder of the loan term.
There might also be some instances where you expect you’ll be able to afford a higher payment in the future. For example, a future raise or promotion could mean an increase in earnings, enabling you to afford a higher mortgage payment later. However, if the prospect of a higher rate in the future is scary to you, then you should skip the ARM and opt for a fixed-rate mortgage.
Pros and cons of FHA ARM loans
Pros
Attractive introductory interest rates
Easier to qualify for if your credit needs work
Gets you into a home sooner thanks to a lower down payment and more affordable monthly payment
Cons
Risk of future increases to your rate, which can make monthly payments unaffordable, potentially forcing you to sell the home and move or increasing your risk of foreclosure
Need to refinance to remove mortgage insurance premiums
Limited to buying a home with a mortgage within loan limits and for use as a primary residence
Alternatives to FHA ARM loans
An FHA mortgage is not your only option. Some alternatives to FHA ARMs that can help you buy a home include:
HomeReady mortgage: Fannie Mae‘s HomeReady program requires a minimum 620 credit score. You do not have to be a first-time homebuyer, but you will need an income lower than 80 percent of the area median income. You’ll also need to take a homeowner’s education course.
Standard 97 Home Loan: Also provided by Fannie Mae, this mortgage requires 3 percent down, and at least one borrower must be a first-time homebuyer.
HomeOne Loan: Freddie Mac offers the HomeOne Loan for first-time homebuyers, and it has no income or geographic limits. You can put down a minimum of 3 percent on a home with this loan.
Home Possible Mortgage: Also offered by Freddie Mac, the Home Possible mortgage is a loan option for very low- to low-income homebuyers. You must meet qualifying income limits: no more than 80 percent of the area median income.
These mortgages are for primary residences only, so you will need to look at other options should you require a mortgage for a second home or investment property.
Refinancing an FHA ARM
Many borrowers refinance before the first ARM rate reset. You might want to refinance out of an ARM loan into a fixed-rate one if rates have dropped since you first obtained the loan and you want the stability of a non-fluctuating rate. You can also refinance to another ARM.
If you qualify, you might want to refinance from an FHA mortgage to a conventional loan, too. This allows you to eliminate (or work toward eliminating) mortgage insurance premiums, as conventional loans only require insurance if you have less than 20 percent equity in your home. In contrast, most FHA loans require you to pay insurance for the entire loan term, regardless of how much you’ve paid down the mortgage.
Keep in mind, refinancing is typically only worthwhile if you can get a lower rate and pay the closing costs. If you won’t be in the home long enough to recoup those costs and realize the savings, it might not make financial sense to refinance.
Bottom line on FHA adjustable-rate mortgages
The considerations for getting a FHA adjustable-rate mortgage vs. a fixed-rate one are similar to the considerations for their conventional loan cousins. ARMs work best for homeowners who are pretty sure they’ll be leaving their home within a certain number of years (coinciding with the end of the ARM’s fixed-rate period, or before) or who anticipate a big increase in income (because the ARM’s new, reset rate often means higher repayments).
Other than that, your main decision is whether it’s worth jumping through the extra application/appraisal hoops and paying the MIP that comes with FHA loans. If the better terms still seem worth it, then go for it.
After you purchase a new home, there are many things to budget for, including moving costs, new furniture, and ongoing expenses such as your mortgage. Although it may seem like many of the significant expenditures are out of the way once you close on a property, there are additional costs that can add up.
To avoid financial surprises, it’s wise to jot down and budget for all of the extra expenses you will encounter when you move into your new place. To help you organize your finances, here are the things to budget for after buying a house.
Moving-Out Expenses to Budget for
Before you take up residence in your new home, you must move all of your things. Even if you pack and move all your belongings yourself, you’ll still have to spend on things like boxes, packing materials, and a truck. And if you use movers, it will cost you even more.
Recommended: The Ultimate Moving Checklist
Moving Your Belongings
There are three main options for moving your belongings:
• Renting a truck and doing it yourself. It’s more cost efficient than using professional movers, but DIY moving yourself still adds up. You’ll have to pay for the truck rental fee, gas, and damage protection. If you’re moving across the country, you may also have to factor in the costs of shipping some of your items. Even though you can enlist your friends and family to help you do the heavy lifting, the cost of moving yourself can still be significant, and it’s a lot of work.
• Hiring movers. If you decide to use professional movers, it’s wise to shop around to find the best price. Here’s why: For moves under 100 miles away, the national average cost of moving is $1,400, and it ranges from $800 to $2,500. If you’re moving long distance, the average cost can be as high as $2,200 to $5,700. To cut costs, you can do your own packing, which may save you money.
• Moving your things in a storage container. Another option is to use a hauling container — you load your things in it, and the container company moves it to your new location. This usually costs between $500 and $5,000, depending on the distance and how much stuff you’re moving. Long-distance moves will usually cost more than local ones.
Moving Supplies
If you decide to go the DIY moving route, you will need to buy boxes, bubble wrap, labels, and tape. And you likely have more items to wrap and box up than you think, which requires even more supplies.
Cleaning Supplies
You’ll probably want to clean your current property before you move out, and you’ll definitely want to clean the new place when you move in. That means buying mops, sponges, cleaning solutions, and paper towels. You may also want to get the carpets cleaned or hire a professional house cleaner if the place needs a deep cleaning.
10 Common Expenses After Buying a Home
Once the move is done, there are other expenses you’ll need to account for as you settle into your new abode. Here are a few things to budget for after buying a home.
Furniture and Appliances
You’ll likely bring some furniture and decor from your old place, but you’ll probably want to purchase some new things as well. For example, if the appliances are outdated, you might want to upgrade to new ones. And you may have more rooms to furnish, which requires additional furniture.
Consider opening a savings account for the new items you want to purchase. It can also help pay for any unexpected costs, such as having to replace a hot water heater that breaks.
Mortgage Payments
As a homeowner, every month you will making a mortgage payment that typically includes:
• The principal portion of the payment. This is the percentage of your mortgage that reduces your payment over the life of the loan. The more you pay toward principal, the less you will have to pay in interest.
• The interest. This is the amount you pay to borrow funds from the bank or lender to purchase your home.
If you are using an escrow account to pay your mortgage, other things may be included in your payment, such as your property taxes, insurance, and private mortgage insurance. This guide to reading your mortgage statement can help you understand all the costs involved in your mortgage payment.
Property Taxes
Property taxes are the taxes you pay on your home. In many cases, these taxes are the second most significant expense after your mortgage. Property taxes are based on the value of your home, which is typically governed by your state. The county you live in collects and calculates the sum due. Usually, property tax calculations are done every year, so the amount you owe may fluctuate annually.
Homeowners Insurance
Homeowners insurance helps protect your home from damage or destruction caused by events like a fire, wind storm, or vandalism. It can also protect you from lawsuits or property damages you are liable for. If someone slips and falls on your sidewalk, for instance, homeowners insurance will pay for the injured person’s medical bills and the legal costs if they decide to sue you.
The cost you pay for this coverage will vary by the type and amount of coverage you select.
Private Mortgage Insurance (PMI)
For borrowers who can’t afford a down payment that’s 20% of the mortgage value, lenders usually require private mortgage insurance (PMI). This type of coverage is designed to protect the lender if you default on your mortgage payments.
PMI can cost as much as a few hundred dollars per month, depending on the sum you borrow.
HOA Dues
This is a Homeowner’s Association fee, which goes toward the upkeep of property in a planned community, co-op, or condo. The amount can range from a couple of hundred dollars a year to more than $2,000, depending on the amenities you’re paying for (like a pool and landscaping). You typically pay HOA fees monthly, quarterly, or annually.
Utilities
Your utility payments include water, gas, electric, trash, and sewer fees. Some bills like water and electricity are based on the amount you use every month, so monitoring your electric and water usage, like taking short showers and turning lights off, can help lower your cost. Other payments, such as your trash or recycling, might be a fixed amount.
Lawn Care
Maintaining the curb appeal of your home requires landscape services and lawn care. If you choose to mow your own lawn, you may need to factor in the purchase of a mower, which can cost about $1,068 on average. If you hire a lawn service to cut your grass, you may pay $25 to $50 a week.
Pest Control
Pests, such as ants, ticks, rodents, or mice, can wreak havoc on your home and your family’s health. For these reasons, many homeowners hire a pest control company to prevent the infestation of pests around their homes. The company’s initial visit may cost between $150 to $300, then $45 to $75 for every follow-up.
Home Improvement Costs
As a homeowner, there are likely things you want to change about your house. From painting the walls to a complete kitchen renovation, transforming your property can add to the cost of owning a home. According to the HomeAdvisor 2023 State of Home Spending Report, homeowners spend an average of $9,542 on home improvement each year.
Additionally, as the features of your home age, you will need to replace and repair them accordingly.
Common Mistakes After Buying a Home
One of the most common mistakes people make when buying a home is spending more than they can afford. For instance, you may forget to factor in utilities, lawn care, HOA fees, costs of upkeep, and other hidden expenses that come with owning a home. It’s crucial to do your research to determine extra costs and add them up before you move forward with purchasing a property.
Another mistake new homeowners make is taking on too many DIY projects. TV shows can make home renovations look easy. However, many of these projects require professionals who know what they are doing. Attempting a home improvement project could cost you more to fix than hiring a pro in the first place. In fact, about 80% of homeowners that attempt their own renovation projects make mistakes — some of them serious.
Unless you can afford an expert, you may want to rethink purchasing a home that requires a lot of renovation.
The 50/30/20 Rule
For help planning your budget as a homeowner, you can use the 50/30/20 rule, which breaks your budget into three categories:
• 50% goes to to needs
• 30% goes to wants
• 20% goes to to savings
That means you’ll be budgeting 50% of your income to go toward necessities such as housing costs, grocery bills, and car payments. Then 30% will go toward things you want, such as entertainment (movies, concerts), vacations, new clothes, and dining out. The remaining 20% goes towards saving for the future or financial goals such as home improvement projects.
Using a 50/30/20 budget rule is simple and easy. It allows you to see where your money is going and helps you save.
Recommended: How to Track Home Improvement Costs
Lifestyle Tradeoffs in Order to Budget
With so many things to budget for after buying a home, you may need to cut back on spending. Start by looking at your discretionary spending and think about where you can trim back. For example, instead of eating out regularly, you can cook more meals at home. Or perhaps you can put your gym membership on hold and do at-home workouts for a while to stay in shape physically and financially.
Recommended: How to Budget in 5 Steps
The Takeaway
After you buy a house, there are many expenses you may not have accounted for, such as the cost of hiring movers; buying furniture; and getting your new place painted, cleaned, and ready to move into. Making a budget is vital to keep you on track financially, so you can enjoy your new home.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
FAQ
How much money should you have leftover after buying a house?
After buying a home, the amount you have left will vary depending on your financial situation. However, it’s a good idea to have at least three to six months of living expenses in reserve. That way, in case of an emergency, you can stay afloat financially.
Is it worth putting more than 20% down?
Putting more than 20% down on your home can help lower your monthly mortgage payment and interest because you’ll be borrowing less money. It also gives you more equity in your home from the beginning. But make sure you can afford to pay more than 20% in order not to stretch beyond your budget.
What’s the 50-30-20 budget rule?
The 50/30/20 rule means that you budget 50% of your expenses for needs (housing, groceries, loan payments), 30% for wants (entertainment, eating out, shopping), and 20% toward savings goals (retirement, renovations, new furniture).
Photo credit: iStock/ArtMarie
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Inside: Here are fun things to do with no money. You don’t have to spend money to enjoy yourself! Plus you save money!
Having fun doesn’t have to cost a fortune! You can have a good time without spending a dime.
But, that is the trap, we find ourselves in. We believe that in order to have fun, you must spend money.
However, we are going to debunk that myth.
It is possible to have fun without spending money. This is something my family does ALL-THE-TIME. There are plenty of places to go when you have no money. There is so much available in our society to explore that you never get bored or run out of ideas. And your wallet and bank account will thank you!
If you are looking for fun things to do when hanging out with friends or fun things to do with kids, your boyfriend, girlfriend, mom, spouse, or anyone in your life, this list is for you!
You will find plenty of activities to do at home, at night, or near you.
Plus the best part… we have tons of memories and experiences from these no money activities ideas!
Today, you will get a glimpse into how you can live differently with your money. Show you fun things to do when you’re broke. Maybe you’re not broke, but choosing to live a frugal lifestyle like us. Either way, you will save money along the way that you can use for something else.
It doesn’t matter if you make $15 an hour or have a 6 figure salary, these tips are for you!
We have found plenty of things to do without spending money.
Today, you are going to learn fun stuff to do that doesn’t cost money.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What Can You Do Without Money?
Honestly, a whole lot.
There are so many free activities available today. You just need to put on a different perspective than the urge to spend money. These no money activities will keep your hard-earned cash in your hands and then you can use it towards your money goal. That is a win! Actually a HUGE WIN!
The question is… are you willing to try something new? In this case, something new would be a money free weekend or maybe a no spend month.
There are so many free fun things to do available to us, but we opt to spend money because that is the natural societal habit. Whatever your reason for finding fun things to do that don’t cost money, you are in the right place.
We are going to cover an extensive list of things to do instead of spending money.
This will make your no spend challenge easier or just a desire to save more money to reach your money goals.
Without further ado, let’s cover the 101 plus things to do that don’t cost money.
Fun Things to Do With No Money
We are going to dive into plenty of things to do instead of spending money. This list might surprise you with how many things to do for free.
For the frugal green person, this is exactly what they want to do.
You will find specific ideas for fun things to do with friends, over here.
1. Call a Friend: Back in the day, we spent many hours on the phone just talking with our friends. (Hint: like hours on end talking). Pick up the phone and call your friends. I am pretty sure you will come up with another fun thing to do next.
2. Bucket List: This is a must-have for everyone! Do you have a bucket list of things you want to do? Use timeframes to help create your list – one month, one year, three years, five years, 10 years, 20 years. Or in your lifetime? Don’t be worried if some of these ideas on your bucket list cost money. That will be figured out later. It doesn’t cost any money to make your bucket list.
3. Head to your Local Library: This is the best way to begin a frugal lifestyle. Libraries are jam-packed with free things – books, music, videos, games, or events. Plus you can find options for physical items as well as digital versions. Many libraries now have maker spaces, interaction labs, and kid play areas. These STEM spaces are available to further your creativity and not to spend money on equipment. Check to see if your library offers 3D printing!
4. Volunteer Usher. This is a great tip for Money Bliss reader, Elizabeth and one many of my friends did recently. By volunteering your time, you are able to check out the hottest concert or play for free. The key is your availability and finding the right contacts.
5. Explore Like a Tourist: Have you explored your own city the way you would if you were traveling? More than likely not. There are so many no money activities available. Just grab a tourist guide and start exploring.
6. Geocaching: Join in on the world’s largest scavenger hunt. It is easy to participate and a free activity. The goal is to catch hidden caches using GPS coordinates. All you need is a smartphone or a GPS device to participate. Time to find your next treasure!
7. Volunteer: Have you a passion? Then, find a local charity where you can volunteer. There are plenty of great organizations that are always looking for additional help to reach and help
8. Games: This is a favorite in our house. Each Sunday, you can find us playing games. Whether a card game, dominos, or board game, the options are endless. This is a class thing to do with friends and family. One of our favorites is Taco vs Burrito!
9. Get Outside: We are blessed to live in such unique and beautiful areas. Yet, we barely manage to step foot outside. As a family, this is one of the best ways we save money. It probably tops my list of the best frugal living tips. The world is full of free things to do for free and explore!
10 Start a Club: Remember your favorite after-school club from elementary school? What was your favorite part about it? More than likely, it was about connecting with your friends with the same interests and spending time together. The same concept is the same as adults. Dedicated time to hang out with your friends with the same interests. There are plenty of clubs that you can start. Here are some ideas: reading club, sewing club, cooking club, fishing club, mom and tots club, etc.
11. Explore the Outdoors: Fresh air is amazing for our bodies. Plus our world is filled with no money activities to do. Get outside, explore, and see your surroundings in a fresh perspective. You don’t need a ton of fancy equipment that comes to mind when wanting to explore nature. Just head outside and follow where your feet take you.
12. We Got No Money Party: When you are looking for places to hang out with friends, look no further than your own place. Gather some friends and have them over for the night. The only ground rule is they can only bring food and drinks from their house. Same goes for games and other fun activities.
13. Teach Others about your Hobby: What is your passion? Teach others about your favorite hobby. Who knows… maybe you can turn it into a side hustle and earn extra cash.
14. Scavenger Hunt: Kids love scavenger hunts and guess what… inside every adult is someone who loves a good scavenger hunt. Plenty of free scavenger hunt ideas with a little Google search.
15. People Watch: This is probably one of my favorite money-free activities to do when bored especially at IKEA. Just head to any local place and people-watch. Many times it is better than TV sitcoms. Grab a friend and you can create stories to attach to those you are observing.
16. Puzzles: When is the last time you have taken on a puzzle? Research shows it is one of the best things we can do to slow aging and diseases like Alzheimer’s. More than likely, you don’t have an extra puzzle lying around. Ask to borrow some from friends. Also, you can get ones for free on Next-door or Buy Nothing Facebook groups.
17. Host a Vision Board Party: This is a trending activity right now! There is no better time to manifest your dreams and goals than with your favorite people. Plus you can create a better life for yourself. Learn how to host a vision board party today!
18. Museums and Zoos: Many of the smaller museums and zoos are free entry. To check out the major museums and zoos, check their website to see when they offer free days. Most local cities are required to offer many free days in order to get funding from the city. Another way to get free admission is with your credit card, business affiliation, or college affiliation.
19. Free Tours: These are places to go when you have no money, especially in a big city. The options are endless on the types of businesses in the area. Some free tours include the U.S. Mint, candy factories, capital building, parks, brewery tours, etc. The list can be endless when finding free tours.
20. Apple Classes: Want to learn how to use your phone and be more productive? Need to cap your kid’s time on their devices? Want to learn how to take better pictures with your iPhone? You can do that in one of the many classes. Look for classes near you.
21. Pinterest Party: Let’s face it… We pin a lot of things that we want to do. Recipes we want to cook. Desserts to book. Crafts to make. Skills to learn. Time to brush off those Pinterest boards and find something to do.
22. Movie Marathon: Time to sit back and enjoy all of your favorite movies! If you don’t already have cable or Netflix, then you can still do this without spending money. Start a free Paramount+ trial (just make sure to cancel it), head to the local library, or swap movies with friends.
23. Learn a New Skill: Another productive way to use your spare time is learning a new skill. With learning, the options are endless. With the library and YouTube, it is easy to learn new skills without paying for lessons. The new skill I want to learn is how to play the drums. What is the new skill you want to learn?
24. Local Events Calendar: Hello free activities! Every city will offer some local activities throughout the year. Just mark your calendar. These events are perfect for hanging out with friends and for local fun.
25. Go for a Walk or Run: This is the ultimate no money activity. Grab your shoes and head outside to clear your head. The fresh air will do wonders and doesn’t cost a thing. Maybe this is the time to challenge yourself for that 5K or half marathon?
26. Go for a Bike Ride: For those who own a bike, it would be time to dust it off and go for a bike ride. This is a great way to exercise without a gym membership. Plus, if you are a spender on the way home from work, then look at commuting on your bike to avoid temptations. Personally, I enjoyed cycling so much that it made sense to upgrade my road bike. There may be a small cost to maintaining a cycling lifestyle, but it brings hours of exercise and I am too tired to do anything later.
27. Go Hiking: Find a local hiking trail. Before you go, make sure you have water and some sunscreen.
28. Make a Meal: The caveat is you can only use ingredients that you have currently in your house. No running to the store and spending money. Create a meal from what you have available.
29. Go on a Picnic: This is a favorite in our house! Change up your lunch or dinner by eating in a different location. Load uptake food, choose a spot, and go! You can go on foot, on bike, or take a little trip by car. Either way, you have to eat!
30. Write a Letter: When was the last time you wrote a letter? Not an email, text, or social media post. An actual letter that can be given to someone or mailed for a tiny price. Another great idea is to write a letter to someone to open at a future date. Some examples include: to your kids on their 16th birthday or when they get married.
31. Swap Items: This is one of the best ways to not spend money and get something in return!! Go shopping through someone else’s stuff and swap. You can create a host a swap party for items like clothing, toys, games, kitchen supplies, home decor, books, tools, etc. One person’s trash is another person’s treasure. This is something that you can do in person or online.
32. Birdwatch: Never been bird-watching? Then, grab a bird-watching book from your local library to make sure you can tell the birds apart and learn a few new facts.
33. Pick up a Book: What do you prefer – fiction or nonfiction? There are plenty of books to keep you entertained for hours. Also, you could ask a friend to read the same book and then plan a time to discuss it. If your local library doesn’t offer what you are looking for, then start a free trial of Kindle Unlimited.
34. Check Out a Local Gym: Almost all gyms want people to check out their place. Many will offer a free class or up to a free week. Try out a new spin class, yoga class, pilates class, or CrossFit. There are so many gyms popping up on every block that this can keep you busy and fit for a couple of months.
35. Photography: We all know that we have one of the best cameras at our disposal, but do you use the camera in your phone to the best of its ability? You can fiddle around with it, check out some YouTube channels, or head to the Apple store for a free class.
36. Photo Shoot: I stopped buying professional pictures of my kids a long time ago. There wasn’t a point in spending the extra money because as a parent I seriously have taken thousands (if not hundreds of thousands) pictures of them. And we have saved tons of money over the years, especially on sports and team photos.
37. Slideshows: Now, that we have tons of photos… what should we do with them? Turn them into a slideshow or some other digital way to view your photos.
38. Nature Walks: These types of walks have a purpose. To explore and realize the nature around you. Typically, in our house, the goal is to find 10 different types of objects (smooth, rough, prickly, big, small, etc.) or look for something with the same characteristics (like various rocks). The list of types of nature walks you can come up with is endless.
39. Go Sightseeing: There are so many beautiful places to look at in our cities. You can head up to the mountains, the beach, or even urban areas. You can plenty of things to do around here. Don’t forget your camera!!
40. Clean Your House: Really? Does this have to go on the list of ways to spend weekends with no spending money?!?! But, what a great way to spend your time especially when bored. Plus you will have something to show for your elbow grease and hard work.
41. Projects You Put Off: Raise your hand if you can think of a project or two (or ten) that you have put off. When you don’t want to spend money, it is a great time to dust off that list and dig in.
42. Make a Budget: If you are broke or struggling with no money, then it is time for a budget. A budget isn’t meant to be constricting. It is designed to help you spend money the way you want to. Manage your money ahead of time. Learn how to make a budget.
43. Take Surveys for Money: Have spare time, then make some extra money by taking surveys. One of the easiest things to do and not spend money. The best surveys to do include:
44. Declutter: This is one of my favorite things to do, but also one of the hardest. Why? I realize all of the money I spend on wasteful items that we don’t even use in the house. Many were impulse purchases or out of boredom. Then, it is hard for me to declutter and get rid of the items because of wasted money. However, living with less stuff means more meaningful time on things that matter.
45. Dive into Basement Storage: You could be doing one of two things. Cleaning out the basement area and getting rid of the unnecessary stuff burdening your life. Or pull out some of your favorite treasures and find a way to use them.
46. Clear Out Garage: This one makes me cringe, too! A great way to make productive use of your time on a no spend day is to clean out the garage. Clean out the unnecessary items and organize what is left. That way you can find a screwdriver the first time you look.
47. Neighborhood Cleanup: Since we are in the cleaning mood, let’s spread out to your local neighborhood. This is a great activity to do with a group of friends. With just a trash bag, you can leave a beautiful area for many to enjoy.
48. Redecorate a Room: What is more fun than a refreshed space? This is easy to do when changing out seasonal decor. Or just move the furniture around to create a whole new look. We did that with our dining room table direction and people would always think we did something massive!
49. Take a Nap: Who doesn’t want a nap (except for that young child who needs a nap)? Take care of yourself and take a step back from the busyness of life. Nap time is a special treat. Plus you can’t spend money when you are sleeping!
50. Video Gamer Competition: You can get free games through your library or with a free trial on Twitch. Just make sure to grab a friend to join you for a little bit of people socialization.
51. Playgrounds: Something that is easy things to do around here is found right in your neighborhood. Head to the local playground and run around crazy after your kids. Play tag and you will wish you had all of the energy they do! Change things up and find a new playground to check out.
52. Dump Debt: I always felt broke when I was in debt. If I spent money, I felt guilty about it. Figure out your debt free date and learn how to pay off debt faster. Use an app called Tally to help you overcome your debt.
53. Play Chess: This is a classic game that everyone should learn how to play. Plus it is one of the best free no no-money activities. Many cities have full-size chess pieces in local parks that make playing that much more fun!
54. Watch a Documentary: This is spare time well spent. A documentary will open your eyes to various views and perspectives. This is a productive use of your time.
55. Dance Party: This is always a hit, especially with kids. You don’t need to worry about where to go when you have no money. You can bring the party to you! There are so many free ways to listen to tunes and no money is spent for moving your body.
56. Delete Unused Apps: Take a few moments and delete any unused apps off your phone. This will help improve phone efficiency.
57. Art Supplies: Gather up all of the art supplies and see what type of creations you can make with stuff that you already have. Double bonus if you create some gifts, too! This is a great idea of things to do with friends! Here are things to draw when bored.
58. Cancel Unused Subscriptions: When you are broke, you need things to do, then look at what you spend money on but don’t use. This is a great money-saving tip! Use a service like Trim or Paribus to help you.
59. Daydream Life Without Debt: Okay, one of the top reasons people are broke is because of debt. We were in that situation too. I would always daydream about life without debt. And then it happened! Read more about our story on why we became debt free. Now, you can start to daydream about life without debt, too!
60. Listen to Podcasts: This is a great way to increase your knowledge around a certain subject or topic. Find your favorite podcast.
61. Post Skills & Make Money: Do you have a specialized skill or service that you can offer? You can post your skills and services on NextDoor, TaskRabbit, or Fiverr. It could be something as simple as shoveling walks or raking leaves. This is great if you want to double $10k quickly.
62. Make Extra Money: One of the best things to do instead of spending money is to be making money. There are plenty of ways to keep you entertained and not bored. Check out this list 20 Genius Ways on How to Make Money Fast. This cannot be stressed enough!
63. Feed the Ducks: Okay, well today, you aren’t allowed to feed the ducks. But, they are interesting creatures to watch and keep you entertained. But, this is somewhere to go when you have no money.
64. Memory Lane: Let’s take a stroll down memory lane. Pull out old photo books, find your keepsake box, and scroll to the of your pictures and videos. Grab some Kleenex and take a walk down memory lane.
65. Visit a Nursing Home: Looking where to go when you have no money? Then, look no further than the closest nursing home. Their residents are always looking for people to interact with. After striking up a conversation or two, you will walk away with golden nuggets of life lessons and a chance to learn from your mistakes.
66. Meal Plan: This one is a productive use of time plus will save you money over the next week. Use this money saving tip and learn how to meal plan like a pro.
67. Mediation: We are constantly on the go. When was the last time, you were just still? Take time and meditate. Start with mindfulness meditation. This is when you learn to pay attention to your breath as it goes in and out. Clear your mind.
68. Try a Budgeting App: This is a great time to stop living paycheck to paycheck and truly figure out where you spend money. Here are some great budgeting apps:
69. Set Goals: When you are asking yourself, “How can I spend weekends with no money?” Start by setting goals. Without an idea of where you go in life, you will be just bobbing along from one thing to another. Get help on making money goals.
70. Bake: More than likely, you probably have all of the baking necessities on hand. Try a new recipe or make an old favorite. Grab a friend or family member to make it more fun! Have too many cookies? Take them to a fire station or a nursing home.
71. Open Houses: In the market for a house, looking to remodel, or just want to redecorate, then check out open houses for ideas and inspiration. There are hundreds each week and a great way to spend weekends with no money. To add more fun, create a persona and a story on why you are looking at houses.
72. Watch a Sunrise: What better way to experience the wonderful beauty of nature! Find a spot to watch a sunrise and soak up the morning rays. Maybe even combine it with a short hike.
73. Watch a Sunset: The sunsets are us can be magical and absolutely colorful. There are so many spots to watch a sunset. Plus no two sunsets will be the same. Maybe even back a picnic.
74. Time Capsule: Make yourself a time capsule to be opened on a big birthday or in a big life year.
75. Craw Dad Fishing: Calling all dads (and maybe moms)! Head to a local creek with some sticks and hot dogs as bait. This is probably my kid’s favorite summertime activity.
76. Build a Fort: This is the only reason I keep so many blankets on hand. Kids can spend hours on end creating a fort with blankets. Pull in the chairs and start building. This will also include STEM learning because it is a science to get blankets to stay up on the fort without caving in.
77. Camp in Your Fort: Yay! Spend the night in your fort and pretend you are camping. This is a great stay-at-home idea for young kids.
78. Play in the Snow:I will admit it is snowing while I type this. All you need to do is head outside and find plenty of things to do without spending money. You can make snow angels, have a snowball fight, color the snow funny colors, catch snowflakes on your tongue, or shovel for extra money.
79. Built an Igloo Fort: This takes me back to feeling like a kid (at least until the soreness kicks in). Building a fort out of snow is so much fun! You can quickly spend hours outside and have a blast. Then, have fort wars!
80. Visit a Farmer’s Market: Learn what fruits and vegetables are local to your area. This is one of my favorite activities especially in small towns.
81. Learn a Foreign Language: With so many cool apps and websites, you can teach yourself how to speak a foreign language. Maybe you just need to brush up on those high school classes. Then, you can volunteer at a local community center to practice!
82. Find a Pet to Love: Head to your local animal shelter and love some pets that need to be rescued. This is a great way to not spend money and help the community. Maybe donate extra blankets to help out the rescue.
83. Figure Out Your Net Worth: This one hasn’t been popular with many of my readers. But, your net worth has to start somewhere (even if it is negative). However, we have been working to increase our liquid net worth this past year. If your goal is to become a millionaire next store, you have to start somewhere.
84. Dress Rehearsal. This one may be harder to find, but an awesome idea if you can. Some venues will allow people to attend their dress rehearsals for big shows. You won’t have the same experience as the real show. At the end of the show, you will save lots of money and may be asked to provide feedback.
85. Sound Checks: Is your favorite bank headed to town and you can’t afford to go? Then, go a couple of hours before the start of the concert and keep your fingers crossed they are doing sound checks. This works really well for outdoor concert venues. I have a cousin who has become a pro at this!
86. Get on a Realtor’s Mailing List: Realtors are always marketing their services and vying for attention. Many realtors will send out mailers with local activities that you can explore for free. Others may invite you to special events that are really fun and totally free for you!
87. Minute to Win It: Play this game against the clock which will have you laughing for hours. Most of the minute to win it games are with items you can find all throughout your house. This one is a winner to hang out with friends, kids, or families!
88. Find Grand Openings: This is where to go when you have no money. Search for grand openings in your local area. Many times you will walk away with freebies and other goodies! Plus more than likely you will have a story to share about your experience.
89. Free Exercise Routines: No need for a gym anymore! You can download apps for plenty of workouts to keep you fit and healthy. Scroll YouTube for yoga classes. If your goal is to lose weight, then try Healthywage and get paid for losing weight.
90. The Bad Gift Exchange: Plan a party with friends and tell everyone to bring the worst gift they got from the previous holiday. Hold a funny white elephant exchange and laugh at what people spend money on.
91. Free Class at Community Colleges: Check out your local community college for the free classes they are offering. You should be pleasantly surprised at how many free classes you can take.
92. Free Classes at Stores: Hitting up stores may seem backward on where to go when you have no money. However, many stores offer free classes or projects. The goal for stores is to get you in the store in hopes that you will buy one or two things while you are there. Resist the urge to buy something and go for the free projects. Stores I know that offer free classes, projects, and crafts: Ikea, Home Depot, Lowe’s, Joann’s, Michaels, and smaller mall stores.
93. Favorite Recipes List: Too many times we forget some of our favorite recipes and they go un-made for months. Create your go-to recipes that everyone in your family loves. This will make your meal planning much easier and faster. Even better… convert your recipes to a digital file.
94. Research your Genealogy: If you want to know more about your family history, then you can spend hours learning more on the various genealogy websites. Even better, call the family historian to learn more about your heritage.
95. Fly a Kite: Don’t worry about having to buy a kite in order to have fun! Get creative and make your own. This is something my kids have figured out how to do on their own with store grocery bags and string.
96. Invite Your Kid’s Friends Over: Kids always want time to hang out with friends. They can always find something to do with their friends. Then, you can get some quiet time. You don’t need to spend any money for everyone to have fun. It is a win-win situation.
97. Get Your Personal Finances in Order: This is one of the most important things to do. Yet, it always slips to the bottom of your list. Learn how to organize your personal finances and make sure your wills are up to date.
98. Make a To-Do List: There is no better time to power through your to-do list. It is a great idea to not spend money and be productive. You may have to DIY projects or save money to finish them another day. But, you can tackle the hard stuff.
99. Last Text Message: Scroll all the way to the bottom of your text message list and find that friend you haven’t talked to in a long time. Invite them over and have a conversation.
100. Free Apps: There are so many free apps available. You can learn a new skill, play a game, organize your life, sharpen your brain, and connect with friends. The options are endless on this one!
101. Local Festivals or Events: Once again, there are so many free activities. Check out your local area for weekend activities. Bonus hint: pack your own food and snacks so you aren’t tempted to spend money with the food vendors.
102. Camp in Your Backyard: You don’t need to drive anywhere to camp. My kids love setting up the tent to camp right here at home. The tent gets more use and the bathrooms are mighty convenient.
103. Check Newspapers. From Money Bliss reader, Elizabeth recommends checking the local newspaper as they list out all of the local events in the community. Her money saving tip is to use the library’s copy for free. Also, the online digital version may have the same info.
104. Free Trials: When you are looking for things to do for free and that don’t cost money, then look no further for free trials. The options are endless because people want to try out their product. At a bike event, I was able to do a free trial for a road bike. It was a great way to check out what I liked and not spend any money.
Ideas for possible free trials:
Just make sure to cancel before the trial ends!!
105. Count Your Blessing: Too many times we take for granted everything that we have. Take the time a start writing a list of everything you are grateful for. These blessings have enriched your life. Find ways to enrich someone’s life.
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The popular book of coupons is now a downloadable app!
The Entertainment® Book and Digital Membership offer 2-for-1 and up to 50% off discounts, all conveniently accessed on our mobile app, online or in the book.
Great way to save money on local restaurants, activities, hotels, adventures, and more!
Groupon’s top deals updated daily.
Discover and save on thousands of great deals at nearby restaurants, spas, things to do, and more.
How do you have fun without spending money?
Now, we have covered an extensive list of things to do with no money. Hopefully, you have learned that you don’t need to spend money to have fun.
You can enjoy your time and not spend money. You can be productive when bored.
You will always have an answer to what do you do for fun!
There are so many ideas to help you through your no spend days.
That should be a smile on your face (and your bank account).
You can figure out what should I do today.
The less money you spend each day the more money you can save for one of our money saving challenges. That is one of the best things you can do for your finances.
Don’t Miss… 90+ Fun Things to Do on Christmas Day
What are your favorite places to go with friends when you have no money? If I missed one of them, please tell me in the comments.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Purchasing a home is one thing, but purchasing a luxury home is a project at a different level. And if you’re planning to take out a $700,000 mortgage — one that’s just shy of the 2024 conforming loan limit of $766,550 — you’re going to need some pretty serious income to repay that debt. We’re talking about an annual income of around $180,000 – $200,000.
When it comes to qualifying for a mortgage, it’s more than just income that matters — and there’s no one-size-fits-all answer to the question, “What income do I need for a $700K mortgage?” That said, there are some important rules of thumb around how much of your income should be spent on a mortgage that can help you determine what’s appropriate for your income — and other factors that mortgage lenders look at during the qualification process.
Income Needed for a $700,000 Mortgage
Again, there’s no set income level required for a $700,000 mortgage — but a mortgage that large is likely to have a hefty monthly payment, which means you’ll need some decent cash flow to be able to make it work.
One rule of thumb states that your housing costs should be no more than 30% of your gross monthly income — that is, your income before taxes or any other deductions. We can use this rule to estimate how much income you need to make a $700,000 mortgage payment feasible.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
How Much Do You Need to Make to Get a $700K Mortgage?
Let’s start by using a mortgage calculator to get a rough estimate of how much money per month a $700,000 mortgage will cost.
To create an example, we’ll assume the property value is $750,000, and that you start out with a $50,000 down payment. While your interest rate will vary depending on factors like market conditions and your credit score, we’ll put it at 7.00%, which is fairly typical as of the second quarter of 2024.
Plugging those numbers into the calculator, you’ll see that the estimated monthly payment comes out to about $4,657 per month. To make our 30% rule above even simpler, we can multiply that total by three to get a low-end ballpark income that’s appropriate for a payment that large. That figure comes to around $170,000 per year. Keep in mind, though, that this figure doesn’t include taxes and insurance, which can add an appreciable amount to that monthly bill. And if you’re putting down a smaller down payment, you’ll also have to pay private mortgage insurance (PMI). Add all that to the mix and you’re looking at an annual income requirement that is closer to $180,000 – $200,000.
For many Americans, that income requirement probably sounds pretty hefty: Per the most recent Census data from 2022, the median household income in the United States is $74,580. (Of course, exact income and cost-of-living figures vary by state.) Still, such a large loan may be within reach for some households — though it’s not just income that matters.
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What Determines How Much House You Can Afford?
Income is obviously an important part of what qualifies you for a mortgage. After all, lenders are interested in your being able to repay the loan over time. However, your ability to earn enough money to support the payment is only one factor that goes into their overall assessment. While each lender has its own specific requirements and criteria, they all look at similar factors.
What Mortgage Lenders Look For
Some of the factors lenders consider when qualifying a borrower for a mortgage include:
• Income
• Job stability
• Credit history and credit score
• Existing debt
• Existing assets, such as bank and investment accounts
• Money available for down payment
To verify all this information, your mortgage loan officer will likely ask for documentation including your tax returns, W-2s, pay stubs, bank statements, and potentially more. Speak with your loan officer directly to learn exactly what you’ll need to submit as part of the mortgage preapproval process.
What Is a Good Debt-to-Income Ratio?
Let’s take a closer look at one very important part of your mortgage application: your debt-to-income (DTI) ratio. This important measurement is expressed as a percentage, and shows lenders how the debt you already carry compares to your available monthly income. It’s calculated by dividing your monthly debts over your gross monthly income.
While, again, specific requirements vary, most lenders require a DTI of 36% or lower, though in some cases borrowers can be qualified with a DTI of up to 50%. Generally speaking, though, the lower your DTI, the better; even if you can qualify with a higher amount of debt, it’ll be more difficult to make your monthly payments.
$700,000 Mortgage Breakdown Examples
As we’ve seen above, in order to qualify for a $700,000 mortgage loan, you’ll likely need a household income of at least about $180,000 per year — although again, whether or not you qualify will depend on many factors aside from your income, like your credit score and existing level of debt.
One way to get a good sense of how much house you can afford at your current income level is to use a home affordability calculator. If you toggle the “advanced” settings, you can also include costs like homeowners insurance and property taxes along with your income and existing debts. The calculator will spit out an estimate of how much house you can afford given all these circumstances — but remember, again, that this is only an estimate and not a guarantee.
Pros and Cons of a $700,000 Mortgage
Like any financial product (and anything in life), a $700,000 mortgage has both drawbacks and benefits to consider. Here are a few to keep in mind.
Pros of a $700,000 Mortgage
• Home appreciation may pay for the amount you spend in interest and prove a worthwhile investment
• Home ownership offers stability
• If you make timely payments, your mortgage could reflect positively on your credit history — and boost your credit score over time
Cons of a $700,000 Mortgage
• A mortgage is still a form of debt, and you will pay for the loan in the form of interest
• When you own your home, you’re responsible for any and all maintenance and repairs — which isn’t true for those who rent
• Depending on your interest rate, you may end up paying far more than the original home price over the loan’s lifetime
How Much Will You Need for a Down Payment?
There’s an old rule of thumb that states you should save up at least 20% of the home’s purchase price for a down payment. On a property listed for more than $700,000, that would come out to at least $140,000 — a pretty sizable chunk of change to save up!
However, these days, even conventional loans allow some first-time borrowers to put down as little as 3.00% on their home purchase — which, in this case, comes out to a far more reasonable $21,000. There is a caveat to be aware of, though: Borrowers who put down less than 20% will likely be required to pay PMI, which can add a few hundred dollars a month to your mortgage payment. Still, for those who have the cash flow to support this additional cost, it can be a worthy trade for earlier access to homeownership.
Can You Buy a $700K Home With No Money Down?
Some mortgage programs do allow borrowers to take out a mortgage with no money down — though you may have to meet certain eligibility requirements to qualify. For example, government-backed loans from the U.S. Veterans Administration (VA) and U.S. Department of Agriculture (USDA) loans don’t have a minimum required down payment, though these are only available to service members, veterans, and their families or to those looking in designated rural areas, respectively.
Is a $700K Mortgage With No Down Payment a Good Idea?
Even if you do qualify for a $700,000 mortgage with no down payment, it may not be the best idea financially speaking. Along with potentially being on the hook for the additional expense of mortgage insurance, you’ll start out with very low equity in your new investment, and your monthly payments may be substantially higher than they would be otherwise.
Can You Buy a $700K Home With a Small Down Payment?
Short answer: Maybe! As we’ve discussed, your ability to qualify for a mortgage is multifactorial, and the size of your down payment is only one of the many pieces mortgage lenders will consider. If the rest of your application is solid, a lender may qualify you for a $700,000 mortgage with a down payment as low as 3.00% ($21,000) if you’re a first-time homebuyer. Again, though, the only way to know for sure is to actually apply.
Can’t Afford a $700K Mortgage With No Down Payment?
If you’re not yet in financial shape to afford a $700,000 mortgage, or the process of saving up a down payment is getting you, well, down, there are steps you can take to get ready to make the purchase.
Pay Off Debt
It may be one of the most common tips to qualify for a mortgage — but it’s for good reason. Having even a small amount of debt can seriously impact your buying power, so paying off what you can and lowering your DTI can go a long way toward making a larger mortgage possible.
Look into First-Time Homebuyer Programs
If you’re a first-time buyer, it’s worth looking into first-time buyer programs that may be able to help you with your down payment or qualify you for a mortgage when you might otherwise not. One of the best-known first-time homebuyer programs is the FHA mortgage, which is backed by the Federal Housing Administration and may help you qualify even with a lower credit score.
Build Up Credit
Along with lowering your overall debt, building up your credit score can also help you qualify for a lower interest rate — which, over the course of a 30-year loan, can translate to big savings. Even a percentage point difference could save you thousands of dollars in the long run, so taking the time to repair or strengthen your credit today may be a well-placed effort.
Start Budgeting
If you don’t yet have a budget, the time before you purchase a home is a great time to start one. After all, homeownership usually comes with its own slate of expenses, from repairs to maintenance items and more, so ensuring you know where your money is going will help you prepare to meet those financial needs. (And, in the meantime, you may find some areas where you can make cuts that will make the upfront expenses, like your down payment, more feasible.)
Recommended: Refinance Your Mortgage and Save
Alternatives to Conventional Mortgage Loans
While conventional mortgages are the most common — and one of the most affordable options for those who qualify — there are different types of mortgage loans to consider. For example, as discussed, if you’re a first-time homebuyer, you may be able to qualify for an FHA loan from the Federal Housing Administration, which helps buyers qualify with lower credit scores than a conventional loan requires.
USDA and VA loans are also viable options for those looking in rural areas or who are (or are married to) service members or veterans.
Mortgage Tips
Need more mortgage help? Visit a home loan help center to study up on everything from amortization to escrow.
The Takeaway
While it takes a higher income to qualify for (and successfully pay off) a $700,000 loan, for many borrowers, it’s within reach — especially once you’ve found the right lender. Getting a mortgage doesn’t only depend on your income. There are multiple factors in play and learning the right mix could land you in a new home.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
How much income do I need for a $700K mortgage?
While there’s no one set income level that will automatically qualify you for a $700,000 mortgage, using the rule of thumb that your housing payment should be no more than a third of your gross monthly income, you’ll likely need somewhere between $180,000 and $200,000 per year to qualify, depending on other factors like your interest rate.
What is the monthly payment on a $700K mortgage?
Specific payment amounts depend on a wide range of factors including the interest rate you qualify for, the property taxes in your location, and the size of your down payment. In an example where you’re purchasing a $750,000 home with a $50,000 down payment at a 7.00% interest rate, your monthly payment would be close to $4,700 before insurance or taxes.
Can I afford a million-dollar home if I make $100K?
Again, how much money you make is only one factor that qualifies you for a mortgage — no matter its size. That said, because of the size of the monthly payment of a large mortgage, a $100,000 salary likely wouldn’t be enough to get you into a million-dollar home.
Photo credit: iStock/DMP
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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.
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.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Want to know what the best businesses that run themselves are? Have you ever dreamed of having a business that runs by itself? Whether you want extra income or a full-time job, these businesses make money without needing you all the time. Having a business that runs itself means more time for you to do…
Want to know what the best businesses that run themselves are?
Have you ever dreamed of having a business that runs by itself? Whether you want extra income or a full-time job, these businesses make money without needing you all the time.
Having a business that runs itself means more time for you to do what you love. This could be more family time, traveling, pursuing passions, or starting another venture. These kinds of businesses are perfect for making your dreams a reality.
Now, that doesn’t mean that all of the businesses below will require zero hours of work from you – they will need varying amounts of time dedicated to them. Maybe some time in the beginning to get it started, some time to maintain it, or even hiring an employee to keep it going or check in occasionally.
Recommended reading: 18 Passive Income Ideas To Earn $1,000+ Each Month
Businesses That Run Themselves
Below are the best businesses that run themselves.
1. Self-service laundromat
A laundromat business can be a great business idea if you want something that mostly runs itself.
With the right setup, you might only need to check in occasionally. Laundromats can give you a steady source of income because people always need clean clothes.
The day-to-day operations of a laundromat include opening the business up in the morning, maintaining machines (the washers and dryers) and keeping the business clean, stocking detergents, and having someone handle the finances. The average self-service laundromat has 2 employees or less, so this is a business where you can outsource that job even.
Running a laundromat can be rewarding and mostly hands-off, making it a popular choice among business owners. If you’re looking for a steady income with minimal daily effort, this could be the option for you.
Recommended reading: Are Laundromats Profitable? How Much Do Laundromats Make?
2. Sell printables
Digital products, such as printables, can be a great way to have a business that runs itself.
Making printables on Etsy can be a great idea because you just need to create one digital file per product, which you can then sell an unlimited number of times. This is what makes it a great passive income opportunity, plus, you can make printables without anything other than just your laptop/computer and internet connection.
Printables are digital products that customers can download and print themselves at home. Examples of printables include:
Grocery shopping checklists
Gift tags
Candy bar wrappers
Printable quotes for wall art
Patterns
Planners
Coloring sheets
Stickers
These items are designed to be easily printed from a computer or other devices, being convenient for buyers who want to customize and use them right away.
Recommended reading: How I Make Money Selling Printables On Etsy
Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
3. Blogging
Blogging can be a business that runs itself mostly, but it’s not passive, especially at the beginning. It requires a lot of hard work and can take up most of your time when you’re starting out. Over the years, I’ve automated much of my blog so that it runs with about 10 hours of maintenance from me each week.
Starting a successful blog is challenging – it’s not something everyone can easily do!
That said, learning how to start a blog has been one of the best decisions I’ve made. It’s a great way to earn semi-passive income and extra money.
I think it’s one of the best businesses that run themselves, and it’s something that I have been doing for years. I can take weeks off at a time and still earn a great income during that time.
Blogging can generate passive income because you can create a blog post (high-quality content is key) and continue to earn money from it for years. This income can come from affiliate marketing or display advertising. Unlike traditional jobs where you have to work daily to earn money, a blog allows you to make money around the clock – even while you sleep – thanks to the work you’ve already done in the past.
I have a free training that you can take – How To Start A Blog FREE Course. Want to see how I built a $5,000,000 blog? In this free course, I show you how to create a blog, from the technical side to earning your first income and attracting readers.
4. Affiliate marketing
Affiliate marketing is a great way to make money with a business that mostly runs itself and can make money in your sleep.
Among these businesses that practically run themselves, this one is my favorite. I’ve earned more than $2,000,000 through affiliate marketing over the years, and much of it is semi-passive. I can earn money while I’m on vacation, without internet, while I’m sleeping, and more.
Affiliate marketing is when you earn money by placing a special link on your website or social media. When people buy something through your link, you get a commission. For example, if you link to a book on Amazon (after joining the Amazon affiliate program) from your website and someone buys it through your link, you earn a commission. Companies like Amazon value good affiliates because they help promote their products and services.
You earn a commission by promoting other companies’ products or services. When someone buys through your link, you get paid.
Now, this doesn’t mean that affiliate marketing completely runs itself. You will need to write the content that draws readers in and find ways to get page views. But, once you get things started, you can earn money without always actively working for it.
Recommended reading: Affiliate Marketing Tips For Beginners – Free eBook
5. Rental real estate and rental properties
Being a property owner and managing properties can be a great way to run a business that makes money on its own.
One way to earn extra money is by listing your property on Airbnb or another short-term rental platform. You can rent out your entire house, apartment, or just a room to travelers looking for short stays.
Another way to earn money is through long-term rentals. Long-term rentals involve renting out a property for an extended period, typically six months to a year or more. For example, you might rent out an apartment or house to a family who will live there full-time.
One advantage of long-term rentals is the stable and consistent income they provide. By leasing your property to tenants for a longer duration, you establish a steady stream of rental payments. This reliability can be particularly appealing for those seeking a reliable source of passive income. Plus, managing a long-term rental is usually less demanding than a short-term rental since you don’t need to clean the property frequently or find new renters regularly.
Whether you rent out your property short-term or long-term, you can lessen your involvement by hiring a property manager to do any of the day-to-day work that may be needed. This can make your rental property business more of a hands-off business model.
Recommended reading: 23 Best Real Estate Side Hustles To Make Extra Money
6. Online courses
Creating and selling online courses can be a great way to earn passive income. Once you develop the content and put it on a platform like Teachable, it mostly takes care of itself.
With an online course, you share what you know with others. Maybe you’re good at math, photography, or playing guitar. You can turn those skills into a course.
Creating online courses is a smart way to take what you know and turn it into a business that runs almost by itself. It can be fun too, and you can help a lot of people at once.
I created Making Sense of Affiliate Marketing, my first online course, several years ago and have earned over $2,000,000 from it.
Creating a course is not the easiest way to start a business that runs itself, but it can be a great way to earn an income around the clock. Most of the work is done in the very beginning, and then there is some maintenance along the way to keep the course updated, help students, and so on.
Recommended reading: How I’ve Made Over $1,000,000 From My First Course Without a Big Launch.
7. Storage facility
Running a storage facility is a great way to have a business that can largely manage itself. Plus, this can be a steady income stream, and many storage facilities have long waiting lists and are in high demand.
Self-storage facilities are places where people store their belongings, like boxes of their keepsakes, vehicles, RVs, and more, in storage units or in a big lot.
Owning a self-storage business can be a way to earn money with low expenses. These businesses usually only need a couple of employees.
Often, when I visit a self-storage lot, it’s just the owner or one employee working, and there are very few customers around. Sometimes, no one is working and I just use a code to go in and out.
Another idea similar to this is to rent out your storage space on Neighbor.
Neighbor.com is a platform where you can rent out your space to people who need storage for their belongings such as boxes, furniture, and even cars. You can list spaces like your driveway, garage, closet, and more on Neighbor.com. It’s similar to Airbnb but for storage – no one stays overnight, just their belongings! Depending on demand in your area and the type of storage space you have, you can earn between $100 to $400 or more each month.
Recommended reading: How To Invest In Self-Storage For Beginners
8. Stock photography
Stock photography is a great way to start a business that will eventually run itself. With this type of business, you take photos and upload them to stock photo websites. When someone buys your photo, you get paid.
Once your photos are online, they can sell again and again too.
Stock photos have many different purposes for websites, companies, blogs, and more. Businesses use stock photos because they may not have the resources to photograph everything they need. Instead, they can use stock photos to improve the visual appeal of their content, website, or business.
I personally use stock photos in my blog posts, as do many others. All the photos in this article are stock photos, actually.
There are several well-known stock photo websites such as Shutterstock, iStock by Getty Images, Adobe Stock, and Dreamstime.
To sell photos on these sites, you’ll need to create a contributor account and upload your images following the site’s rules. Each time someone downloads your photos, you earn a commission.
On stock photo websites, having high-quality photos is very important, but having a larger portfolio also matters. The more pictures you have in your stock photo collection, the more potential income you can generate.
Recommended reading: 18 Ways To Get Paid To Take Pictures
9. Car washes
Running a car wash business can be a great way to earn money with minimal effort. Automatic and self-serve car washes are especially popular because they require less work to manage day-to-day.
A self-service car wash is a place where customers pay to use equipment to wash their own cars.
An automatic car wash is a place where customers drive through a tunnel where machines do all the cleaning.
Starting a car wash can be cost-effective over time. The equipment can handle many customers with little human help. You just need to check the machines and refill supplies.
10. Write ebooks
Creating ebooks can be a great way to generate passive income streams. Once you write and publish an ebook, it can keep earning you money with very little effort.
Writing a book can provide passive income because you only need to write it once, yet you can continue to earn money from it for years. While you may need to do some promotion to keep readers engaged, the writing itself is a one-time effort. This makes it possible for the income to be passive over time.
Plus, you can start by self-publishing an ebook and selling it directly on Amazon or on your own website.
11. Dropshipping
Dropshipping is a popular business model that lets you sell products without keeping any inventory. You simply partner with a supplier who ships the items directly to your customers.
Dropshipping can be a great choice because there are low start-up costs as you don’t need to buy stock or rent a warehouse. This keeps costs down at the beginning.
Plus, there’s a lot of flexibility. You can run your dropshipping business from anywhere with an internet connection. This makes it perfect for those who like to travel or work from home.
There are many different things you can sell in a dropshipping business, such as T-shirts (you could even have a print-on-demand business), home decor, mugs, kitchen tools, pet supplies, and baby items.
12. Run a membership website
Membership websites are a great way to run a business that can almost take care of itself. These are websites where people pay regularly to access exclusive content or services.
Now, these will require work and some maintenance. But, you can earn recurring income 24/7, without actively needing to work.
Plus, as more people join, your income grows without adding lots more work.
Some examples of membership sites can include running a Patreon for your YouTube channel, a stock photo membership site, a paid forum, and an online school.
13. ATM business
If you want a low-maintenance business idea that almost runs itself, you may want to look into ATMs.
ATMs can be great because they don’t need much daily work. Once set up, you just need to check them regularly and refill cash.
To start, you’ll need one or more ATM machines (these typically cost around $2,000 to $10,000), you’ll need to find locations (such as convenience stores, malls, gas stations, etc.), set up the ATM (connect it to a network), and monitor and maintain it.
You would earn money through the ATM transaction fees that people are charged when they withdraw money.
Using ATMs can be a good way to make extra money without a lot of effort. They need some work at first but can become a reliable source of income.
14. Parking lots
Parking lots can be great businesses that mostly run themselves.
People always need places to park, such as in cities, near popular venues, at airports, and at shopping centers. If you can find a good location, your parking lot can bring in steady income without much daily work from you.
To get started, all you need is a plot of land. You can set up pay stations to handle money collection. Some lots even use apps for payments, making the process easier for everyone.
And, with the right setup, you can keep things running smoothly with just occasional cleaning and repairs.
15. App development
If you have technical skills, developing and selling an app can be a way to start a business that operates autonomously.
Creating your own app, whether it’s a useful tool, a fun game, or something else, can be profitable.
Although it requires initial effort and investment, once your app is available in app stores, it can generate revenue around the clock through in-app purchases or with the initial download.
You can create mobile apps like a budget tracker, meal planner, fitness tracker, meditation guide, travel planner, and others that cater to specific needs or interests.
16. Billboards
A billboard business is a great way to make passive income. Once set up, it needs little maintenance. You can rent the advertising space to companies for their ads.
Now, building new billboards isn’t allowed everywhere, but in many places, you can still add them onto your own land or buy one that already exists. You’ll want to check local laws to know more before you begin.
Billboards require minimal upkeep, which makes it a great business that runs itself. Regular checks and occasional repairs are needed. Digital billboards need more maintenance, but they can display multiple ads and increase income.
17. Sell on Amazon
Amazon FBA (Fulfillment by Amazon) allows sellers to store their products in Amazon’s warehouses. Amazon takes care of shipping to customers, handling returns, and managing customer service for the seller. This setup frees sellers from storing inventory or dealing with shipping logistics.
While you still need to find products to sell, Amazon FBA makes it possible for anyone, even without experience, to earn money selling items like household goods, toys, books, electronics, and more through their platform.
Recommended reading: How To Work From Home Selling On Amazon FBA
18. Vending machine business
A vending machine business can be a great way to earn passive income. With some initial investment and a bit of planning, you can start making money with minimal effort. Vending machines typically need minimal upkeep and the hours are low.
You can start with as little as $1,500 to $3,000, and even buy used or refurbished vending machines to save money.
Vending machines can be placed in high-traffic areas (with permission and an agreement, of course), such as schools, offices, gyms, hospitals, and more. You may need to pay 5% to 25% of your earnings to use their space.
Vending machines run on their own for the most part. You will have to refill the machines regularly and make any needed repairs.
A vending machine business can be a smart way to generate passive income while requiring little hands-on work. With the right location and products, you can see steady profits.
Recommended reading: How To Start A Vending Machine Business – How I Make $7,000 Monthly
Frequently Asked Questions
If you are thinking about having a self-running business, here are some common questions and helpful answers that might guide you in the right direction.
How can I start a business that doesn’t need me to be there all the time?
To start a business that doesn’t need you to be there all the time, I recommend finding a business model that can be easily automated. Examples include online stores using dropshipping or print-on-demand services. These models let you automate order processing and inventory management, reducing your need to be involved in daily operations. Other businesses include running a laundromat, selling printables on Etsy, blogging, rental real estate, and stock photography.
What are some top businesses known for making money while the owner sleeps?
The best businesses known for making money while the owner sleeps include rental real estate, blogging, stock photography, dropshipping, ATMs, developing an app, and selling an online course. These businesses have systems in place that handle most tasks automatically, allowing you to earn money with minimal hands-on management.
How to have a business that runs itself?
To have a business that runs itself, you need to try something like vending machines, ATMs, blogging, stock photography, dropshipping, and more. Then, you can either automate as much as you can, or outsource the hours where something needs to be done (such as refilling the vending machine).
What is the easiest business to start and run?
Among the easiest businesses to start are online stores using dropshipping, vending machines, and digital products like printables. These business ventures require low upfront investment and minimal ongoing management, making them accessible for beginners.
How do you find a self running business for sale?
To find a self-running business for sale, you can look for listings on business-for-sale websites or contact business brokers. Many websites list businesses for sale, such as BizBuySell and LoopNet. Always research and vet any business thoroughly before buying.
Businesses That Run Themselves – Summary
I hope you enjoyed this article on the best businesses that run themselves.
Self-sustaining business examples include online businesses like blogging and affiliate marketing, where you create content or promote products and enjoy passive income.
Even offline options like laundromats and car washes can be mostly self-sustaining, needing only occasional maintenance. Another good example is a vending machine business. You just put your machines in good spots and let them do the work.
Managing a rental business can be another way to have a business plan that doesn’t require a lot of active hours from you.
For me, I have a business that I work a low amount of hours and can run itself for the most part. I have automated a lot to make this possible, as well as have worked a lot of hours in the beginning. I love having a business that can run itself, as it means that I have more time for other things in life.
What do you think are the best businesses that run themselves?
Maryland family closes on dream home with a 3.4% mortgage rate — paying $1K a month less than the market rate
With house prices and mortgage rates hovering at painful highs, many Americans have tossed aside their dreams of homeownership — but are they missing a trick?
The Sutton family in Northeast Maryland recently secured their dream home with a mortgage rate of around 3.4% — which was roughly half the average 30-year fixed mortgage rate at the time of purchase.
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How did they beat the home buying odds? They used something called an assumable mortgage — a special type of home loan where the buyer essentially takes over the seller’s mortgage.
The young family shared their story with NBC News. By going down the assumable mortgage route, the Suttons not only managed to avoid the stress and fees associated with qualifying for a conventional mortgage, but they also saved themselves about $1,000 to $1,500 a month by taking on the low interest rate.
Here’s how assumable mortgages work and how to determine if one might be right for you.
What is an assumable mortgage?
An assumable mortgage is a type of home loan where a qualified buyer can take over (or assume) a seller’s mortgage terms, including the existing balance, repayment period and interest rate.
These loans can be appealing for both buyers and sellers, particularly those, like the Suttons, looking to capitalize on lower mortgage rates of the past. But they do also have their limitations and are bound by strict regulations.
Christopher Sutton admitting he’d “never heard of” assumable mortgages before his realtor suggested one is unsurprising.
Assumable mortgages are a relatively niche product today, but they were immensely popular back in the 1980s, when mortgage rates lingered in double-digit territory for years and many lenders (including conventional banks) accepted the practice.
Since then, the majority of lenders have restructured their loan terms (in line with regulatory and market developments) to prohibit the practice. Today, conventional loans are no longer eligible for assumption. They must be paid in full — and a new one issued — whenever a property is sold or transferred to a new owner.
There are three exceptions, where home loans are assumable:
FHA loans: These loans are backed by the Federal Housing Administration and are popular with first-time buyers and those with lower incomes who may not qualify for a conventional loan. Like conventional loans, borrowers still have to qualify under all FHA terms, including credit and employment standards.
USDA loans: These loans are intended for low-income borrowers in rural areas. They’re backed by the U.S. Department of Agriculture and don’t require any down payment.
VA loans: These loans are offered to active or retired members of the U.S. military.
The Suttons assumed an FHA loan in order to secure their dream home in Maryland.
Read more: ‘You didn’t want to risk it’: 80-year-old woman from South Carolina is looking for the safest place for her family’s $250,000 savings. Dave Ramsey responds
Things to be wary of
To successfully assume someone else’s mortgage, you need to cover all of the equity already built up in the house. So, if the seller bought the home for $200,000 and paid off $50,000 in principal, the buyer would have to bring $50,000 to the table (a bit like a down payment) and qualify to assume the remaining mortgage.
This worked out for the Suttons because the previous owner of the house had only made about 18 months of mortgage payments before relocating to Florida for work, meaning they had not built up a ton of equity that the Suttons would have to match.
“It was just one more of those stars that had to align for this to work,” the family’s realtor, John Gatsoulas from REMAX, told NBC News.
It’s also important to consider the property value before assuming a mortgage. If the home has appreciated significantly since the seller first bought it, the original home loan that you assume may not cover your costs.
So, if you assume a mortgage for $350,000, but the house is now worth $500,000, you’ll need to pay the $150,000 difference out of pocket. You may be able to secure financing to cover that cost, but second mortgages are typically expensive, hard to qualify for and not really suitable for families, like the Suttons, seeking assumable mortgages for their affordability.
What to read next
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Finding an affordable city to buy a house can be challenging. Getting a good deal is key to my investing strategy. To help you find the best investment opportunities, here’s a list of the top ten most affordable large cities to buy houses in the US. These cities offer not only affordable housing but also promising growth prospects and quality of life.
To measure, we’ll look at housing prices and wages.
Table of Contents
Overview
Of course, a low price doesn’t necessarily mean a great deal. To learn more about finding great deals, check out my Master the Deal course.
This data is from May 2024 and comes from National Association of Realtors (NAR), the Zillow Home Value Index, U.S. Census Bureau, Local Economic Development Reports, and the U.S. Bureau of Labor Statistics (BLS).
There are many smaller towns that are even more affordable in many areas of the country. It may surprise many people but people making lower wages actuallty have a better shot of buying a house than many who make much more in expensive areas.
Top Ten Most Affordable Cities (Wages and House Prices)
1. Detroit, Michigan
Detroit has been making a remarkable comeback over the past decade. The city is known for its affordable housing market, with the median home price around $70,000.
The median wage in Detroit is approximately $36,000.
With ongoing revitalization projects and a growing tech scene, Detroit is becoming an attractive option for first-time homebuyers and investors alike.
2. Cleveland, Ohio
Cleveland offers a blend of affordable housing and vibrant cultural life. The median home price in Cleveland is approximately $85,000.
The median wage in Cleveland is around $38,000.
The city’s diverse economy, driven by healthcare, education, and manufacturing sectors, makes it a target for real estate investment.
3. Pittsburgh, Pennsylvania
Pittsburgh is another city where affordability meets opportunity, with a median home price of about $150,000.
The median wage in Pittsburgh is approximately $42,000.
Pittsburgh provides a strong job market, particularly in technology, healthcare, and education. The city’s rich history and growing infrastructure add to its appeal.
4. Indianapolis, Indiana
Indianapolis combines affordability with a high quality of life. The median home price is around $175,000.
The median wage in Indianapolis is about $44,000.
The city is known for its strong job market, excellent schools, and vibrant cultural scene. Indianapolis may be ideal for families and investors seeking long-term growth.
5. Buffalo, New York
Buffalo is experiencing a resurgence, with a median home price of approximately $130,000.
The median wage in Buffalo is around $40,000.
The city’s affordable cost of living, coupled with its robust job market in healthcare and education, makes it an attractive place for homebuyers.
6. Memphis, Tennessee
Memphis offers an affordable housing market with a median home price of about $120,000.
The median wage in Memphis is approximately $37,000.
Known for its rich musical heritage and vibrant culture, Memphis also boasts a strong economy driven by transportation, healthcare, and education sectors.
7. Birmingham, Alabama
Birmingham combines affordability with economic growth. The median home price is around $160,000.
The median wage in Birmingham is about $38,000.
The city’s economy is diverse, with strong sectors in finance, healthcare, and manufacturing. Birmingham’s southern charm and historical significance make it a desirable place to live.
8. Kansas City, Missouri
Kansas City offers affordable housing with a median home price of approximately $190,000.
The median wage in Kansas City is around $45,000.
The city is known for its robust job market, particularly in the finance, healthcare, and engineering sectors. Kansas City’s thriving arts scene and friendly community add to its appeal.
9. Oklahoma City, Oklahoma
Oklahoma City provides affordable housing with a median home price of about $160,000.
The median wage in Oklahoma City is approximately $40,000.
The city has a growing economy driven by energy, aerospace, and biotechnology industries. Oklahoma City’s low cost of living and family-friendly environment make it an excellent place to buy a home.
10. St. Louis, Missouri
St. Louis rounds out our list with a median home price of around $150,000.
The median wage in St. Louis is about $41,000.
The city offers a diverse economy with strong healthcare, education, and manufacturing sectors. St. Louis’ rich history, cultural attractions, and affordable housing market make it an interesting place to invest.
This table summarizes the information here. The Affordability Ratio is the wages divided by home price. The higher the Affordability Ratio, the more affordable.
City
Median Home Price
Median Wage
Affordability Ratio
Detroit, Michigan
$70,000
$36,000
0.51
Cleveland, Ohio
$85,000
$38,000
0.45
Buffalo, New York
$130,000
$40,000
0.31
Memphis, Tennessee
$120,000
$37,000
0.31
Pittsburgh, Pennsylvania
$150,000
$42,000
0.28
St. Louis, Missouri
$150,000
$41,000
0.27
Indianapolis, Indiana
$175,000
$44,000
0.25
Oklahoma City, Oklahoma
$160,000
$40,000
0.25
Birmingham, Alabama
$160,000
$38,000
0.24
Kansas City, Missouri
$190,000
$45,000
0.24
Conclusion
These ten cities offer some of the most affordable housing markets in the US, each with its unique blend of economic opportunities, cultural attractions, and quality of life. Whether you are a first-time homebuyer or an investor looking for promising real estate markets, these cities provide a great starting point.
What do you think of this list? Let me know in the comments below.
WASHINGTON, D.C. (June 12, 2024) – Karen Kreutziger Powell, CEO of Flat Branch Home Loans, testified today at a hearing on pending legislation before the Committee on Veterans’ Affairs Subcommittee on Economic Opportunity.
Hearing details can be found here. Click here for Powell’s written statement.
[Note: Please find Karen Kreutziger Powell’s prepared oral statement below. She may add to or subtract from these remarks during the course of his testimony. Portions of the text may be omitted during the testimony.]
ORAL STATEMENT
Karen Kreutziger Powell, CEO of Flat Branch Home Loans
6/12/2024
Chairman Van Orden, Ranking Member Levin, and members of the Subcommittee, thank you for the opportunity to testify today on behalf of the MBA.
My name is Karen Kreutziger Powell. I serve as the Chief Executive Officer at Flat Branch Home Loans, an independent, residential mortgage lender, headquartered in Missouri and licensed in 38 states.
I have extensive experience originating, securitizing, and servicing VA Home Loan Program mortgages and am honored to appear before this panel.
MBA appreciates the focus of today’s hearing on proposed legislation aimed at authorizing a permanent partial claim program. This program is designed to give our nation’s heroes loss mitigation options comparable to those in other federal housing programs.
The VA Home Loan Program is a significant benefit earned by Veterans through their sacrifice and service. MBA recognizes the need to make this program more accessible, operationally efficient, flexible, and competitive.
This is particularly crucial during times of individual crisis for Veterans and their families, and it’s important this benefit is not diminished. That’s why I want to emphasize MBA’s strong concern that the VA Funding Fee should not be used for expenses unrelated to the home loan program.
MBA has worked closely with Committee staff on the topic of partial claims – and we are pleased to offer recommendations aimed at improving the proposed legislation. The VA may require additional resources from Congress to implement these suggested program improvements.
MBA welcomes legislation that authorizes a permanent partial claim for the VA Home Loan Program. A partial claim is a standard, simple, and time-tested foreclosure prevention solution available to borrowers in other federal housing programs but one that is missing from the VA’s loss mitigation toolkit.
It allows a borrower who has resolved a financial hardship to move missed payments to the back of the loan, without interest, following a period of forbearance. This helps borrowers get back on track with regular mortgage payments – or pursue a modification for a more affordable payment.
Despite the introduction of the VA’s newest loss mitigation program, known as VASP, MBA believes Veteran homeowners facing temporary financial hardship deserve access to partial claims to reinstate their loans and remain in their homes.
Access to both these solutions will provide struggling borrowers with a more durable set of loss mitigation options to preserve affordable homeownership.
We are, however, concerned that certain provisions of the current bill text, such as the repayment plan, could adversely affect Veteran homeowners, mortgage servicers, and the VA.
As drafted, this legislation adds hurdles that may negatively impact borrower benefits. These changes might be motivated by a desire to generate revenue through interest income, but VA will recoup the initial outlay most of the time, as a partial claim requires repayment at payoff, refinance, or maturity of the first lien mortgage. No other government program requires repayment with interest, and we urge amendments to the bill to achieve parity with other federal housing programs.
MBA appreciates your consideration of these recommendations. Our association and its members will continue to work with the agency, this committee, and other key stakeholders to ensure Veterans and their families have access to more affordable, sustainable homeownership opportunities.
The final topic I want to highlight today concerns the settlement agreement of the National Association of Realtors to resolve various class action lawsuits alleging antitrust violations. If approved, changes could impact decisions by sellers to cover buyer agent commission fees. VA’s regulations prohibit Veterans from paying fees or commissions to real estate agents in relation to a VA home loan.
This prohibition puts Veteran borrowers at a severe disadvantage, as they are prohibited from compensating real estate agents who guide them through the home-buying process. MBA is pleased that the VA has taken temporary measures to address the problem. We urge the VA to permanently amend its regulations.
Once again, MBA appreciates the opportunity to comment on the issues impacting the VA Home Loan Program – and the specific legislation before the Subcommittee today. We value our partnership with Congress and the VA to help Veterans utilize their earned benefit to achieve homeownership.
MBA looks forward to continuing to work with the Subcommittee to forge practical solutions and provide the VA with the necessary resources to implement changes and improve the Home Loan Program.
I look forward to answering any questions you may have on this or any of the proposed legislation.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
For many people, budgeting can be really tedious, and feel like it traps their freedom and spirit. While there are plenty of advantages of budgeting, it is nice to have one area of free-spending with money.
That is where a slush fund comes in.
A place to spend money with freedom and not worry about ruining your budget and the inability of not being able to reach your money goals.
When you work hard for your money, it is hard to be disciplined with your money every single step of the way.
You want to reward yourself and treat yourself! Specifically with no questions asked.
That is where the slush fund comes into play.
What is a Slush Fund?
The definition of slush money or pocket money is simple – money set aside to spend as you see fit.
A reserve of money set aside for an unknown and undetermined purpose.
Everyone will have their own meaning for their personal slush fund. That is because we all have ways we want to spend our little reserve of fun money.
And this one thing can save a marriage and many, many arguments!
Slush Fund Examples
Each person will have their own purposes for spending their fun money. Here are some slush fund examples:
Spa Treatments
Car Accessories
Lunch Dates
Helping others
Music or cable subscription
Golf outings
Happy hour fun
Crafting
Honestly, the best slush fund example is something both people do not want to include in their budget. It could be something they do not agree with, or the cost, or the need.
Did you know all of the names for the slush fund?!?! Call it what you want… the purpose is still the same:
Pocket Money
Spending Cash
Pocket Change
Allowance
Petty Cash
Kitty Fund
Chump change
Just pick your favorite name for it and understand it is money set aside to spend how you choose.
Regardless of what you call slush fund money, one meaning holds true.
It is a small amount of money earmarked for one person to spend as they choose.
How to Create a Slush Fund?
These are the four rules of slush fund money. It is not hard or difficult to create a slush fund.
You just need to decide in advance how a few line items we will cover shortly.
Nothing complicated. Pretty simple. You just need to follow them.
1. Agree on amount Given to Slush Fund
Every month or week a predetermined amount is given out for each person’s slush money. Remember, the slush fund meaning is their reserve of cash to spend or save as they deem fit.
In the Money Bliss Cents Plan, there are 3 lines dedicated to Slush Fund Money – His, Hers, and Kids.
Slush fund money is just as important for adults – probably more important than any age group.
Everyone in the household can have a little chump change to spend as they see fit. So many times, we hear of using pocket money for kids. However, very few people use it as adults.
2. Fun Spending Your Way – No Questions Asked
The biggest ground rule is no questions can be asked about how or why you spent your slush fund money in this or that way. Period.
Don’t test the boundaries. Respect the rule of no questions asked.
It is hard for a couple not to argue on every single line when they make a budget. So, agree on a slush fund amount and stop pestering the other party on how they spend their money.
3. Cash Only (Or Seperate Cashless Account)
Spending must be in cash. And cash only. At the very minimum, that chump change account is only used for your fun spending.
The temptation to overspend is way too great especially when it is spent on ourselves. Staying away from credit cards is necessary. Especially because it helps with #2 rule of no questions asked.
Here are great options to help you succeed:
4. No Judging
Human nature is quick to judge. Someone spent their money in a way you don’t agree with and you want to speak up to say something.
Not up to you to judge.
Slush money is meant for whatever you want to spend money on. This is not the time or place to be judging how to spend under $20-100 per month.
Plus – Don’t Be an Idiot
This isn’t the time or place to be sneaking behind your significant other’s back. If you are unable to honestly say how you spent the money, then you are on a slippery slope.
Honest and open communication is the key to success.
This isn’t an opportunity to start hiding your actions.
Bonus Tip for Kids –
***A side note on the Kid’s Slush Fund Money…this is how we introduce paying commissions to our kids for jobs done around the house.
That in itself is another post for another day. But, the same rule holds true, we can’t judge how they use their “spend” money.
Advantages of Slush Fund Money
There are many benefits of using a slush account when you are budgeting money. This is especially true at the beginning of your proper money management and budget journey.
You need freedom in your life if not you will be so constricted that you will not meet the smart financial goals you planned for yourself.
1. Agreed Upon Amount
First of all, the amount of money designated to each person’s slush fund money is set at the beginning of the month (or week). Everyone agreed to the budget, so no changing money in the funds.
Sit down and discuss what amount is doable based on your situation. This is based on yourbudget.
The key is to stick to the agreed amount of money. Use cash to stick to the agreed-upon amount.
2. No Arguments
Remember, no questions can be asked!
No judgments can be made!
A very simple way to steer clear of arguing. One person spends their money before the first week of the month is up – more power to them! Another person saves their slush fund money for a bigger purchase – high five!
There are bigger things to discuss in the journey to financial freedom than how someone spends their slush money.
Pick your battles.
Money is one of the leading causes of divorce. Save your marriage and use a slush fund account. That right there is one of the huge advantages of pocket money.
Related Post: How to Talk about Money with your Spouse
3. Breath of Fresh Air / Freedom
Many people find living in a budget or Cents Plan very constricting and overbearing.
This is why slush fund money is SO very important. It provides a breath of fresh air. A moment to spend money and not worry about the money spent.
Freedom to savor life’s little moments. Enjoy!
Especially if you are struggling to make ends meet, this is a big advantage of pocket money.
4. No Guilt
The last advantage of slush money is not carrying guilt. Regardless of how an adult decides to spend their pocket money, there is no guilty feeling about buying x, y, or z.
Remember rule #3 – no judging, you are free to purchase whatever your heart desires and not be overwhelmed by guilt.
Disadvantage of Slush Fund Money
After listing out all of the advantages of pocket money, you may be thinking there have to be disadvantages, right?
Honestly, the only disadvantage is it is one more category to track and separate out money.
However, that is menial given the advantages of slush money.
Related Post: Complete Guide to Sinking Funds; Why They are So Important?
Ready for Your Slush Account?
This is a key point to remember…
Regardless of where you are on your journey to Financial Freedom, slush fund money is utterly important.
The key to money is to build a strong foundation. That includes how you spend money, how you save money, and how you discuss money.
Even if you start at $5 or $10, you will begin to reap the benefits and advantages of pocket money. The small amount of money will change your perspective and how you relate to money.
As you get further in your journey, you can increase your slush amount to $100+ of fun money!
Just remember the rules of slush fund money in order to see the advantages in your household!
Further reading:
From all of the free and paid budgeting apps, here are our top budgeting apps to check out!
This section may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. Please read the full disclosure below.
Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
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