The Federal Reserve’s interest rate decisions influence the rates you pay for variable-rate home equity lines of credit (HELOCs) and new home equity loans.
Fed officials announced on June 12 that they would hold interest rates at a 23-year high as policymakers wait for signs that inflation’s rise is slowing, moving closer to their desired 2 percent rate.
“We know that reducing policy restraint too soon or too much could result in a reversal of the progress we’ve seen on inflation,” says Jerome Powell, chairman of the Federal Reserve. “At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment.”
This is the seventh straight meeting the Federal Open Market Committee (FOMC) kept its key benchmark federal funds rate in the 5.25 to 5.5 percent target range. Previously, the central bank had indicated plans to slash rates three times in 2024. Now, however, “the Fed is not in a hurry to start cutting interest rates as the progress toward 2 percent inflation has encountered some turbulence,” says Greg McBride, CFA, Bankrate’s chief financial analyst.
So what does that mean for home equity products? Let’s break down how the Fed’s monetary policy affects HELOCs and new home equity loans.
How does a Fed rate affect HELOCs?
When the Fed changes the federal funds rate, the interest rate banks charge each other for overnight loans to meet reserve requirements, it affects other benchmarks — such as the prime rate, the interest lenders charge their largest, most favored clients. The prime usually runs 3 percentage points higher than the fed funds rate. When the fed fund rate moves, the prime rate moves up or down in tandem. Many lenders directly tie the rates on HELOCs and home equity loans to the prime rate — often adding extra percentage points onto them — for the ultimate rate you, the borrower, pay.
Maintaining the status quo at this last Fed meeting suggests HELOCs should remain roughly the same, short-term. But they’ve had a bumpy ride: In November 2023, the average HELOC interest rate eclipsed 10 percent — the highest HELOC rate in over 20 years, according to Bankrate’s national survey of lenders. They dipped back down into the single digits with the new year, though. And, along with home equity loans, they’re forecast to retreat further in 2024.
Don’t expect any dramatic changes, though. “Interest rates took the elevator going up but are going to take the stairs coming down,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “Many home equity lines that now carry double-digit interest rates are going to remain high and interest rates won’t fall fast enough to provide meaningful relief.”
What home equity borrowers should know about the Fed
Because HELOCs usually have variable interest rates, the cost of borrowing can rise or fall with the federal funds rate. If the fed funds rate goes up, your HELOC gets more expensive.
Home equity loans, on the other hand, come with fixed rates, so they aren’t as deeply impacted by fed funds rate movement. Once you close the equity loan, your rate won’t change. But of course the rate you get on a new loan reflects the fed funds rate activity and its impact on the prime rate.
If you want stability in your budget, know that with a HELOC, there’s no real way to predict whether rates will rise, fall or stay the same. Not only does your interest rate affect monthly costs; it can also greatly impact how much you pay for the line of credit overall.
Before you open a HELOC, understand the maximum interest rate, when the draw period ends and whether you’re responsible for interest payments only (or not) during this period.
If you already have a HELOC but don’t have a balance (in other words, haven’t drawn from it), rising rates won’t affect your wallet all that much. If you do owe, you’ll have a larger monthly payment to cover, usually within the next two billing cycles. This applies whether you’re in the draw or repayment phase.
If rates do rise, you might want to explore whether you can lock in a fixed rate on a portion of your HELOC balance. This isn’t an option with every lender, and there might be some limitations if it is.
Overall, though, “having a debt repayment plan is the best way to reduce the impact of high HELOC rates,” McBride advises.
Home equity loan or HELOC: Which is better?
There’s no single answer. Depending on the Fed’s policy, where interest rates are heading and the nature of your financial need, one may be more ideal than the other.
HELOCs benefit most from rate decreases. With the Fed looking to lower rates later in 2024, a HELOC may be more beneficial than a home equity loan because the rate could go down. Also, with a HELOC, you can draw funds as you need them, and you only have to pay interest on the funds you actually take out. So, if you don’t need the full sum on your line of credit upfront, you can take what you need now and wait until rates drop to withdraw more.
On the other hand, home equity loans on average have lower interest rates than HELOCs. As of June 12, interest rates on HELOCs average 9.18 percent, while 15-year home equity loans average 8.75 percent, according to Bankrate’s national survey of lenders.
If the Fed doesn’t move its fed funds rate significantly this year, fixed-rate home equity loans could maintain a lower rate than HELOCs. If you need a set large amount, a home equity loan will get you the funds with a predictable monthly payment. Plus, if rates fall by a large amount, you could always consider refinancing your HE loan, though you will likely need to pay closing costs.
“If you’re undertaking a home improvement project where costs will be incurred in stages, that is best suited to a home equity line of credit,” says McBride. “If you’re doing a debt consolidation where all the funds are disbursed at once, a fixed rate home equity loan may be the better choice.”
Is now a good time to get a home equity loan or HELOC?
With the Fed’s current stance on taming inflation, rates could remain elevated until inflation falls within the Fed’s 2- percent benchmark.
“The decision about whether to take a home equity line of credit or a home equity loan depends more on the borrower’s need for the funds and purpose for borrowing than it does on the interest rate, especially now that interest rates have peaked and are poised to start pulling back,” says McBride. So, if you have a pressing need for funds, now may be the time to take action. If you wait, interest rates could fall, but when and by how much remains to be seen.
Bottom line on the Fed’s effect on HELOCs and HE loans
The Federal Reserve’s interest rate decisions affect borrowing costs for many types of financial products, including home equity loans and lines of credit (HELOCs). When the Fed lowers its key rate, it causes the rates that lenders ultimately set for HELOCs and new home equity loans also to drop, and vice versa.
At its meeting on June 12, the Fed decided to maintain its key rate for the seventh meeting in a row. But interest cuts could still be in the cards if inflation lessens enough. If you plan on taking out a home equity loan — or already have a HELOC — keep an eye on how their rates react following a Fed announcement.
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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.
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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.
Recommended: The Best Affordable Places to Live by State
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.
The impact of the elevated Federal funds rate and morgage rates on our economy is stark. The 5-unit sector, in particular, entered a recession in September 2023 and those permits have been at COVID-19 recession lows for an extended period. However, in the last few months, single-family permits have also been falling. The key turning point in every economic cycle is when construction workers lose their jobs in enough numbers that it pushes jobless claims higher.
Let’s take a closer look at today’s housing starts report.
From Census: Building Permits: Privately‐owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,386,000. This is 3.8 percent below the revised April rate of 1,440,000 and is 9.5 percent below the May 2023 rate of 1,532,000.
We want to keep this very simple. We have a backlog of orders that need to be built out, so that has kept labor on five-unit housing going, as it takes 21 months to finish a 5-unit construction project. Once those projects are done, there will be far less residential work for these construction workers and they will need to look at alternatives, like government-funded projects such as semiconductor fabrication plants. This is why we keep an eye on permit data.
We all know that 5-unit permits have been at COVID-19 recession lows for some time now, but what is different now is that the single-family permits are falling too. We still have a backlog of single-family homes that need to be built and the purchase application data for those new homes is growing. However, once those homes get built, and if permits for new single-family houses continue to fall, that will be an issue for construction labor. Construction labor for single-family homes already took a hit after rates rose toward 7% in 2022.
From Census: Housing Starts: Privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1,277,000. This is 5.5 percent (±9.4 percent)* below the revised April estimate of 1,352,000 and is 19.3 percent (±10.0 percent) below the May 2023 rate of 1,583,000.
As we can see below, housing starts are at the lows that we saw in the COVID-19 recession. This is happening while permits for single-family homes have only recently started to trend down. As more and more homes get built, if we don’t grow permits soon, then that labor force pool that are building homes are at risk when their jobs are completed. Hopefully, mortgage rates will fall soon, increasing builders confidence and getting more deals in the pipeline. This is what happened last year.
Why is this so important?
Economic cycles have similar patterns: one is that the Fed raises rates too much and is too restrictive, which leads housing to go into recession first, meaning construction workers on the residential side of things go down first. In the past few months we have been creating jobs in this sector, but if this trend of falling continues, then the labor pool is at risk of a decline.
All in all, it is a disappointing trend report on housing starts data, but this has been in the works for some time. The other side of this equation is that if construction labor breaks, mortgage rates will fall and that will spur demand, so hopefully we can limit the future damage of production when that happens.
However, for now, we will keep a close eye on it. For those who hear the stories about higher rates being inflationary, this is what they’re talking about: that eventually, the restrictive policy will prevent the future production of housing. As I always say: “Supply is the best way to defeat inflation. Demand destruction is a short-term fix, supply wins in the long run.”
Purchase loan applications have surged for two weeks in a row, but rates for conforming mortgages are inching back up toward 7 percent this week as investors weigh the odds of Fed rate cuts.
At Inman Connect Las Vegas, July 30-Aug. 1 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.
Homebuyer demand for purchase rates picked up last week for the second week in a row, as mortgage rates dropped to the lowest levels since March. But rates for conforming mortgages are once again inching back toward 7 percent this week as investors weigh the odds of Fed rate cuts later this year.
Applications for purchase loans were up by a seasonally adjusted 2 percent last week compared to the week before, according to a weekly survey of lenders by the Mortgage Bankers Association. While it was the second consecutive week-over-week increase in demand for purchase mortgages, applications were still down 12 percent from a year ago.
TAKE THE INMAN INTEL INDEX SURVEY FOR JUNE
Refinancing applications during the week ending June 14 were essentially flat from the week before, but up 30 percent from a year ago.
Mike Fratantoni
“Mortgage rates dropped last week following the latest inflation data and the [Federal Reserve] meeting, with the 30-year conforming rate dropping to 6.94 percent and reaching its lowest level since the end of March,” MBA Chief Economist Mike Fratantoni said in a statement Wednesday.
Federal Reserve policymakers held rates steady at their June 12 meeting, saying they wanted more evidence that inflation is subsiding before cutting interest rates.
But the Fed only has direct control over short-term rates. Bond market investors who fund most mortgages brought long-term rates down sharply last week after seeing the latest Consumer Price Index reading, which showed inflation eased in May.
Mortgage rates came down again the next day on reports showing May jobless claims jumped to their highest level since August 2023 and that wholesale prices unexpectedly dropped in May brought long-term rates down again.
Rates on 30-year fixed-rate conforming loans dropped to 6.81 percent on June 13, down nearly half a percentage point from a 2024 high of 7.27 percent registered April 25, according to rate lock data tracked by Optimal Blue.
Mortgage rates bounce
But mortgage rates have been on the rebound this week as a number of Fed policymakers — including the presidents of the Federal Reserve banks of New York, Boston, Dallas and St. Louis — continue to stress that the Fed is looking for more data confirming that inflation is headed toward their 2 percent target before cutting rates, Reuters reported.
Optimal Blue data shows that after climbing for three days in a row, rates on 30-year fixed rate loans were averaging 6.88 percent Tuesday.
An index maintained by Mortgage News Daily showed rates for 30-year fixed-rate loans had climbed back above 7 percent Monday but flattened out since then.
(Rates reported by Mortgage News Daily are higher because they are adjusted to estimate the effective rate borrowers are offered, regardless of what points they’re willing to pay. Optimal Blue tracks contracted rates, including those locked in by borrowers who paid points to get a lower rate.)
The next big move in mortgage rates could be triggered on June 28, when the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, is set to be updated with data from May.
PCE and Core PCE trending down
The PCE price index showed inflation dropping to 2.65 percent in April, the first improvement since January. Core PCE, which excludes the cost of food and energy and can be a better indicator of underlying inflation trends, has been moving in the right direction for 15 consecutive months, falling to 2.75 percent in April.
Forecasters at Pantheon Macroeconomics are predicting the PCE price index will show inflation cooled more in May than many economists are predicting. Recent evidence that inflation will continue to ease includes:
Oliver Allen
“The sharp falls in total housing starts and building permits are surprising; they take both series to their lowest levels since June 2020,” Pantheon Senior U.S. Economist Oliver Allen said in a note to clients Thursday. “Lower rates will help sales eventually, but we expect them to be accompanied by a weaker labor market and a rising unemployment rate, thinning the ranks of potential homebuyers.”
The latest jobless numbers show claims for unemployment insurance during the week ending June 15 dropping slightly from the week before, to 238,000. But the four-week average increased to 232,750 — the highest level since September 2023.
“The Fed’s forecast that the unemployment rate will be unchanged throughout the rest of this year looks implausibly upbeat,” Pantheon Chief Economist Ian Shepherdson said in a note to clients Thursday.
Pantheon is forecasting that the unemployment rate will rise to 4.5 percent by the end of the year, up from 4.0 percent in May.
While Fed policymakers indicated they only expect to cut short-term rates once this year, futures markets tracked by the CME FedWatch Tool are expecting at least two cuts, with the first coming in September.
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Taking off from the Zayed International Airport’s recently opened Terminal A in Abu Dhabi, United Arab Emirates, was a special treat, especially considering I was flying on an Airbus A350-1000 in Etihad Airways’ business class, which offered sliding doors at each seat.
From on demand a la carte dining to a new triple-level lounge in the airport, traveling aboard Etihad, one of the national airlines of the UAE, is a unique way to learn about Emirati culture while also enjoying top-notch service.
Etihad’s many partnerships with other airlines puts award flights more easily within reach for those who want to redeem their points and miles. Here is what to expect when traveling business class with Etihad.
The airport experience
Etihad offers chauffeur service in Abu Dhabi for business class passengers, which was easy to book online. My personal driver arrived right on time to take me from my city-center hotel to the new terminal. The driver dropped me off at the business class check-in area, which was bright and airy.
There was a short wait, and an agent from the first class check-in area flagged me over to check me in. All in all, check-in took two minutes. In addition, there were comfortable seating areas and even refreshments to enjoy before heading through security.
Terminal A, which just opened in November 2023, is bright and airy. It showcases enormous windows and an undulating roof sculpture that looks like the shape of the region’s desert sand dunes.
After a little shopping, I made my way to the terminal’s new Etihad business class lounge, which has three floors.
Etihad business lounge in Abu Dhabi
Once I arrived at the Etihad Airways lounge for business class passengers, I asked the friendly check-in agent which floor they recommended and made my way to the suggested top floor. A full-service bar and buffet setup proved an interesting way to pass the time.
My flight was departing at 3:05 a.m., which was a difficult time to stay awake for, but surprisingly, I was hungry and helped myself to the large selection of salads and curries on offer. When it was time to board, there was no extra security check, and I was in my seat in minutes.
The business class seat
The 1-2-1 layout in Etihad’s business class meant the seats have spacious side counters and wireless charging surfaces, which worked brilliantly.
Several storage compartments allowed me to keep my belongings in order, and the enormous touch-screen monitor in front had a wide range of movies and TV shows. Even with a flight duration of 14 hours and 30 minutes, I had barely enough time to even scratch the surface of entertainment options.
The best part of the seat was the sliding privacy door that was unlocked by the crew after takeoff. This keeps movement in the aisle from disturbing passengers while trying to rest. I kept mine closed most of the flight except when eating.
Waiting near my seat was a large pillow, padded seat cover, blanket and beige Acqua di Parma amenity kit. It had hand lotion, lip balm, eyeshades and socks. Cushioned noise-reducing headphones were wrapped in a compartment to one side with a bottle of water.
I appreciated how often the crew offered to refill my water bottle, as I prefer to stay hydrated in flight.
Meal service
Etihad offers a dine-on-demand service, and I struggled to decide when I wanted to eat and when I wanted to sleep.
Not wanting to miss out, I decided to try a light snack after takeoff and ordered the Arabic mezze with a glass of Chardonnay plus an acai bowl for dessert.
Just what you want at 4 a.m., right?
It was quite tasty, and I liked how my flight attendant brought out a bowl of warm nuts before serving my food.
After the light snack, I reclined my seat into bed mode and slept for four hours. My plan was to sleep for eight or nine hours and then have a larger meal before landing, but I could not stay asleep.
So what do you do on an Etihad flight when you can’t sleep? Eat again!
I went to the galley to see if there were snacks available. Sure enough, a display of potato chips, chocolate bars and fruit was laid out. I grabbed a few snacks and informed the flight attendant I also wanted to order something more substantial.
Another glass of wine soon arrived along with a tray of lentil soup and a side salad. It was served at the perfect temperature and with a slice of lemon to squeeze onto it.
After this, my next course arrived, Indian paneer curry. Other options on the menu included a roasted chicken dish and local Emirati grouper fish.
Etihad has a new partnership with Armani Casa to supply its cutlery, dishes and glassware from the brand. It was very elegant and had the appearance of a fine restaurant.
🤓Nerdy Tip
Interestingly, Etihad uses trays in business class rather than putting the dishes one by one on the table like its peers. Still, this made the service more efficient for the flight attendants and did not detract from the presentation.
For dessert, I ordered the cheese plate, which had cheddar, brie and blue cheeses with fresh fruit. After working a little on my laptop, I reclined my seat again to doze until landing.
The details
I loved how the crew was from different parts of the world. In addition to the Lebanese flight attendant who took care of me, the purser was from Thailand, another flight attendant in my aisle was from Egypt and the pilot was from Ireland.
Etihad has a very international crew, and its uniforms, in hues of beige and purple, made them look like runway fashion models.
The bathrooms were clean and tidy the entire flight, and they had Armani Casa toiletries, although I was surprised and disappointed there were not more products like shaving or dental kits on display.
Another bummer was the lack of air nozzles at each seat, as the cabin was rather warm.
One unique feature about U.S.-bound flights from Abu Dhabi is that the airport has a preclearance facility. This means passengers complete U.S. customs and immigration formalities before boarding, allowing them to land in the U.S. as a domestic passenger.
Unfortunately, the new airport terminal meant that not all U.S. flights were eligible yet for this service, as the U.S. officers worked only during the morning hours. This added some extra time to my itinerary when arriving at Chicago O’Hare International Airport, but normally, this is an excellent reason to connect on Etihad in Abu Dhabi versus other area airports.
How to book Etihad business class
Redeem points and miles
In addition to paying cash for Etihad’s premium cabin, members of its own Etihad Guest loyalty program can redeem miles for the experience.
The airline uses a distance-based chart, which means the number of miles you need varies by flight. This flight clocks in at more than 7,000 miles, which means a business class seat requires 110,000 miles in each direction.
Transfer travel rewards from airline partners
Another popular way to enjoy business class is by redeeming American Airlines AAdvantage miles, as Etihad is one of the carrier’s partners. A one-way business class flight from the U.S. to Abu Dhabi costs 70,000 miles based on its partner award chart.
Smart cards for Etihad flights
The Platinum Card® from American Express
Citi Premier® Card
Capital One Venture Rewards Credit Card
Annual fee
Earning rates
• 5 points per $1 on flights booked directly with airlines or with American Express Travel, on up to $500,000 spent per year.
• 5 points per $1 on prepaid hotels booked with American Express Travel.
• 1 point per $1 on other eligible purchases.
Terms apply.
• 10 ThankYou® points per $1 spent on hotels, car rentals and attractions booked through the Citi Travel site.
• 3 points per $1 on air travel and other hotel purchases.
• 3 points per $1 on supermarkets.
• 3 points per $1 on gas stations and EV charging stations.
• 3 points per $1 on restaurants.
• 1 point per $1 on all other purchases.
• 5 miles per $1 on hotels and rental cars booked through Capital One Travel.
• 2 miles per $1 on all other purchases.
Learn more
Etihad impresses on ultra-long-haul flights
Etihad offers an impressive business class product on the A350-1000. If you can’t redeem miles to fly on one of the airline’s first class A380 flights (complete with in-flight shower), this is the next best thing.
To view rates and fees of The Platinum Card® from American Express, see this page.
The information related to Citi Premier® Card has been collected by NerdWallet and has not been reviewed or provided by the issuer or provider of this product or service.”
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?
Real estate technology firm Knock announced Thursday that its bridge loan product is being integrated into the borrower application process at Baltimore-based NFM Lending.
The bridge loan estimate is being integrated into the lender’s workflow through an Encompass plugin. NFM loan officers will be automatically notified when a homeowner can tap into the equity of their current home to buy a new one before selling.
The Knock option is available to loan officers and real estate agents in 22 states across the country, the company explained in its announcement. The product is designed to make buyer offers more attractive to sellers by removing contingencies. The financing can be used to make a down payment, pay down debt, or cover repairs and moving expenses.
“Over the past 18 months, Knock has become our go-to solution for helping homeowners compete and win in today’s housing market,” Bob Tyson, president and chief operating officer at NFM Lending, said in a statement.
“With so many of our lending officers turning to the Knock Bridge Loan as a financing solution, this integration will streamline the approval process. More importantly, it gives them another tool to differentiate themselves and provide more personalized and tailored service to their clients.”
According to Knock’s website, the company charges a fixed fee of 2.25% of the estimated list price of a client’s departing property, plus a closing fee that can vary based on the loan amount and state-specific regulations. The loan includes no interest for six months.
The Knock bridge loan also includes a “purchase guarantee,” meaning that Knock will buy the departing residence if it does not sell in timely fashion. The company claims that “the majority of our customers sell their home to someone other than Knock,” that 92% of its homes are on the market for less than 90 days, and that its average sale-to-list price has exceeded 100% over the past three years.
“NFM was the first to work with us when we gave lenders the added power of using our financing solution to help their clients access the money tied up in their current house to purchase their next home, and they are the perfect partner to launch our Encompass plugin with,” Knock co-founder and CEO Sean Black said in a statement.
“In today’s limited inventory, high interest rate environment, the biggest value a service provider can offer is helping homeowners get unstuck. The Knock Bridge Loan solves this problem by allowing homeowners to tap into the equity in their current home before they sell. They become more competitive buyers and can flip the process to move on their own terms.”
NFM Lending is licensed in 49 states and Washington, D.C. Its subsidiaries include Main Street Home Loans, BluPrint Home Loans, Elevate Home Loans and Element Home Loans.
According to data from Scotsman Guide, NFM was the 21st-largest lender in the country last year, originating nearly 15,600 mortgages with an aggregate volume of $5.62 billion.
If you’re in a bind and there aren’t many other options available to you, it is possible to get a personal loan for paying rent. However, you’ll need a solid credit score and credit history to get a good interest rate on a rental assistance loan.
Before you’d get a loan for rent, you may want to evaluate the costs involved and the pros and cons. Read on to learn more about getting a loan for rent payment.
What Types of Loans Can You Use for Rent Payments?
There are several different types of personal loans that you can obtain for paying rent. These include secured and unsecured personal loans for rent assistance, as well as payday loans.
Secured Personal Loans
Secured loans require putting up collateral, which is an item of value used to back up the loan. If the payments on the loan are not made, the lender can seize the collateral and sell it to make up for their losses. Some types of collateral that may be used include cash savings, stocks, a car, a boat, a home, jewelry, fine art, and future paychecks.
Securing a loan with collateral may result in a lower rate, but all conditions are dependent on what the lender is willing to take and what terms they’re willing to offer on a personal loan.
Unsecured Personal Loans
Unsecured personal loans do not require collateral. Since the lender has fewer options for recovering the funds should the borrower default, these types of loans often come with higher rates and shorter terms.
Payday Loans or Cash Advances
A payday loan, or cash advance loan, is a small, expensive loan you repay all at once, typically on your next payday. Interest rates and fees can be exorbitant. As a result, this type of loan should generally only be a last resort for covering rent payments.
Recommended: The Problem With Online Payday Loans and Fast Cash
Reasons Why You May Need to Use Loans for Rent
Using a personal loan for rent isn’t something you’d want to do routinely, but you may come across certain scenarios where it may make sense, such as when:
• You have a short-term financial setback.
• You’ll soon have the funds to pay the loan back.
• You have a good to excellent credit score.
• You can afford to make the monthly payments.
• Your only other option is a payday loan.
Keep in mind that while there’s a lot you can use a personal loan for, taking one out still involves assuming debt. If you’re not confident you can repay a loan for rent, then it’s worth considering if you have any other options available to cover your rental costs for the month.
What Happens If You Do Not Pay Your Rent?
If you do not pay your rent, your landlord can start eviction proceedings against you. Laws vary from state to state and city to city, but it’s important to pay your rent on time.
If you know you’re going to have trouble paying rent, dig out your lease agreement and find out if you have a grace period, what the late fees are going to be, and who to contact if you need to pay late. If you reach out to your landlord before you miss a due date and explain your situation, they may be willing to give you a grace period and delay eviction proceedings.
Is It a Good Idea to Use Personal Loans for Rent Payments?
Generally, experts advise against using a personal loan for paying rent. Ideally, you should have an emergency fund that can cover these essential costs if something unexpected arises.
However, if you’ve decided this is your best course of action, there are some positive aspects to obtaining loans for rent over other potential options. Of course, there are downsides to take into account as well.
Recommended: How to Start an Emergency Fund
Pros of Using Loans for Rent Payments
Personal loans are known for their flexibility and versatility. Here are some of the upsides of turning to a personal loan for paying rent.
Potentially Competitive Loan Terms
A personal loan can come with competitive terms. If you’ve kept your credit in good shape, you may be able to qualify for a low interest rate with low fees and a reasonable repayment term. Your credit score doesn’t have to be perfect to be approved for a personal loan, but a score higher than 670 can increase your chances of getting approved for a personal loan with a competitive interest rate.
Recommended: Typical Personal Loan Requirements Needed for Approval
Versatility and Accessibility
Personal loans are known for being flexible. Borrowers can use them for a wide variety of purposes. For instance, you can use a personal loan for debt consolidation or to cover home renovations, an upcoming vacation, or even rent, among other things. Plus, personal loans offer quick access to funds — sometimes even the same day you apply.
Could Help You Build Credit
If you make all of your payments on time, having a personal loan could improve your credit profile. Adding an installment loan can also improve your credit mix, which is factored into your score.
Affordability
Interest rates on personal loans are generally lower than interest rates for credit cards. Your landlord may not even be able to take a credit card payment.
Cons of Using Loans for Rent Payments
Using a personal loan to pay rent generally isn’t recommended unless it’s a last resort. There are a number of drawbacks to consider.
Additional Fees
Personal loans aren’t free. You may have to pay an upfront fee to take out the loan, not to mention late fees if you miss a payment or even prepayment penalties if you pay in advance.
Possible Harm to Credit Score
If you run into trouble making your loan payments on time, it could have a negative impact on your credit. This could make it harder to qualify for other types of loans, such as auto loans and mortgages, with favorable interest rates in the future.
Interest Rates
If you’re having trouble making your rent payment, other areas of your financial life may have taken a hit. This could mean the interest rate you’re given for a personal loan will be less than ideal. Even if you’ve been able to maintain great credit, you’ll still need to pay interest on a loan for rent.
Increased Debt
Personal loans add debt to your bottom line. You’ll pay more over time by financing your rent payment into a loan. If you’re experiencing financial woes, adding a loan payment on top of what you’re going through may not be a good option.
More Personal Loan Tips
It’s possible to obtain a personal loan for a wide range of purposes, including paying rent. However, it’s important to weigh the pros and cons of getting a loan for rent before you do so. You’ll owe interest (and possible fees), and you could do harm to your credit if you’re not timely about repayment. But if it’s your last resort, a loan for rent is an available option.
If you do decide to get a personal loan — whether for covering rent or another purpose — it’s important to shop around to find the best possible offer.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.
FAQ
Are you able to use loans for rent payments?
Yes, you can use loans for rent payments. You may want to examine all your options before you do, though. Personal loans carry fees and interest, and if you miss payments, you can drag down your credit score.
Is it hard to get a loan for rent payments?
It can be hard to get a loan if you have poor or thin credit or a low income. A lender will analyze your credit score, credit history, and income to determine what amount you can afford to borrow and on what terms.
What type of loan is good for rent payments?
Personal loans are a flexible means to pay for a number of things, including rent. Payday loans and credit card cash advances are high-cost ways to make rent payments, and generally should be avoided.
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