By late spring, homebuying season is in full swing. And right when all the good listings start popping up, so does summer wanderlust — especially if you were cooped up all winter.
House hunting can be exhausting, especially in today’s competitive market. So if you need a vacation, are you throwing away your shot at success?
Karen Wilder, a real estate agent with Mott & Chace Sotheby’s International Realty in Charlestown, Rhode Island, doesn’t think so.
“Sometimes, it can be the best thing for your search for you to just take a little time off,” she says.
If you want to travel and house-hunt at the same time, you have to plan ahead and consider your short- and long-term goals. Here’s how to balance the homebuying process with a much-needed summer getaway.
Weigh your priorities
First, gut-check your travel plans against FOMO: the fear of missing out. In a hot market, home shoppers need to act fast when a great house gets listed. Maybe you have a truly can’t-miss trip — say, your bestie’s destination wedding or a major work conference. But if you have the option to schedule your travel later, it might be worth it to wait.
To help you decide, consider how you’d feel if “the” house came along while you were out of town. Would you regret not being there for an in-person walkthrough? Would you rather be on the beach than on the phone with your buyer’s agent?
“Everybody needs to consider their own comfort level with shopping remotely — their own sort of FOMO when it comes to going away and unplugging,” Wilder says.
The homebuying process is less familiar for first-time home buyers, who might prefer to handle things in person. In her experience, Wilder notes that seasoned real estate buyers or investors are often more comfortable with overseeing a transaction from a distance.
Find a proxy
Krystal Stearns, branch manager at Valor Home Loans in Colorado Springs, Colorado, is one of those seasoned pros. She has purchased six properties across three states without seeing any of them in person first. Digital tools like virtual walk-throughs and listing videos can help, but nothing beats a boots-on-the-ground perspective, she says.
Before you travel, ask an experienced buyer’s agent, trusted friend or family member to attend walk-throughs or open houses on your behalf. When Stearns bought her Florida vacation home sight unseen, she knew she could trust her buyer’s agent to give candid feedback on the place.
“You really need someone who is going to be honest with you, that’s going to look out for you and your family and understand your goals,” she says.
If any must-see listings arise while you’re away, your proxy can walk through the house with you in real time on a video call. They might notice things the listing photos can’t fully capture, from a breathtaking view to a troublesome odor.
“You cannot scratch and sniff online,” Wilder says.
Stay plugged in
Unless you can accommodate a complete pause on your homebuying journey, it’s wise to remain somewhat connected during your travels.
“It might not be the time to climb Mount Everest or, you know, go somewhere completely off the grid,” Wilder says.
Heading on a cruise or long flight? Buy the Wi-Fi. Going camping? Bring a portable power bank to charge your devices (and make sure its battery is full before you leave). Share your travel plans with your buyer’s agent and mortgage team so they know the best way to reach you and how quickly you’re able to respond.
If you’re under contract, your homebuying squad can explain which time-sensitive requests to expect and who will be sending them. For example, if your loan is in underwriting, you might have to submit recent bank statements or pay stubs. Following a home inspection, you’ll want to review the inspection report and negotiate any requests for repairs.
“A closing is, you know, three to four weeks,” Stearns says. “A lot happens in that time period.”
Before you reply to any urgent-sounding emails, check the sender’s address to make sure the request is legit. If something looks off, it could be a mortgage closing scam. Identity criminals can send convincing lookalike emails that attempt to steal your money or personal information.
Watch your spending
A home is one of the biggest purchases you’ll ever make, so now isn’t the time to drain your savings. Before you leave, make a travel budget and stick to it. That’ll save you the stress (or regret) of wondering if you can afford something while you’re in vacation mode.
After mortgage preapproval, lenders keep a close watch on your finances. While you’re traveling, avoid making any unexpected large purchases or opening new lines of credit (like signing up for that airline credit card offer after too many tiny bottles of wine on the plane). Doing so could affect your credit score or debt-to-income ratio, potentially putting your loan approval at risk.
Ultimately, buying a house while enjoying summer travel is possible if you plan ahead and remain reachable by phone or email. It all depends on how you prefer to spend your time.
“Life is short, so live your life as much as you possibly can,” Stearns says. “Don’t let a vacation stop you from buying a house, and don’t let buying a house stop you from going on vacation. Just know it’s going to be a little bit of extra work.”
Flight to quality, also known as flight to safety, is when investors shift their assets away from riskier investments — like stocks — into conservative securities – like bonds. This reaction often occurs during turbulent times in the economy or financial markets, and investors want to put their money into relatively safe assets.
Because flight to quality is a term that’s often thrown around in the financial media, investors need to know what it is and how it can potentially impact an investment portfolio. A flight to quality is a short-term trading strategy that might not be ideal for long-term investors. But it’s still important for investors to know how the broader trend may affect the financial markets.
What Causes Flight to Quality?
Economic uncertainty is why investors look to reorient their portfolios away from volatile investments to conservative ones. Moments of economic uncertainty that spook investors can arise for various reasons, including geopolitical conflict, a sudden collapse of a financial institution, or signs of an imminent recession.
A flight to quality usually refers to a widespread phenomenon where investors shift their portfolio asset allocation. This large-scale change in risk sentiment can generally be seen in declines in stock market indices and government bond yields, as investors sell risky stocks to put money into more stable bonds.
Though a flight to quality usually refers to a herd-like behavior of most investors during economic uncertainty, individual investors can make a similar move at any time, depending on their risk tolerance and specific financial situation.
💡 Quick Tip: How to manage potential risk factors in a self-directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.
What Are the Effects of Flight to Quality?
During periods of flight to quality, investors tend to trade higher-risk investments for lower-risk ones. This shift commonly results in a decrease in the price of high-risk assets and boosts the price of lower-risk securities.
As mentioned above, investors can see one effect of a flight to quality in the price of major stock market indices and bond yields, as the market shifts money from the risky stocks to safer bonds.
But a flight to quality doesn’t mean that investors will necessarily shift out of one asset (stocks) into another (bonds). For example, investors worried about the economy might sell growth stocks in favor of more reliable value or blue-chip stocks, pushing the price of the growth stocks down and boosting the price of the blue chips.
💡 Recommended: Value vs. Growth Stocks
A flight to quality may also shift investment from emerging market stocks to domestic stocks or from corporate bonds to government bonds.
In addition to moving funds from stocks to bonds or other assets, investors may also move money into cash and cash-equivalent investments, like money market funds, certificates of deposit, and Treasury bills, during periods of economic uncertainty.
Real-World Example of Flight to Quality
A flight to quality occurred during the early stages of the COVID-19 pandemic and related economic shutdowns in 2020. Investors scrambled to figure out their portfolio positions in the face of an unprecedented global event, selling stocks and putting money into relatively safe assets.
The S&P 500 Index fell nearly 34% from a high on Feb. 19, 2020, to a low on Mar. 23, 2020, as investors sold off equities. But investors didn’t rush to put this money into high-grade corporate and government bonds, as many would have thought in a regular flight to quality. A record $109 billion flowed out of fixed-income mutual funds and exchange-traded funds (ETFs) during a single week in March 2020. Instead, investors moved capital into cash and cash-like assets during this volatile period in a desire for liquidity.
💡 Quick Tip: How do you decide if a certain trading platform or app is right for you? Ideally, the investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.
The Takeaway
A widespread flight to quality that creates volatility in the financial markets can be scary for many investors. When you see decreases in a portfolio or 401(k), it can be tempting to follow the broader market trends and shift your asset allocation to safer investments. However, this is not always the best choice, especially for investors trying to build long-term wealth.
Flights to quality have happened in the past (such as during the early stages of the pandemic in 2020), and will, in all likelihood, happen again. But even if you don’t get caught up in it, it’s good to know what’s happening in the markets, and why.
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Drug shortages are an ongoing fact of life, and many Americans have known the inconvenience of having to wait to fill a prescription. But shortages have mounted in recent years, alarming observers and generating headlines.
The number of prescription drugs in shortage climbed to a 10-year high of 323 in the first quarter of 2024 — but it’s not just about the numbers. Patients and their health care providers are also being hit with much more consequential shortages, some with potentially life-altering results.
Hospital crash carts, used to provide emergency treatment to patients with critical conditions like cardiac arrest, have run short of premeasured packages of drugs like epinephrine, forcing clinicians to spend extra time measuring a dose from a vial, and increasing the odds of a medication error.
Some cancer patients, if their first-choice chemotherapy is unavailable, have had to take another drug that has much worse side effects.
Shortages can affect everyone connected with health care in any setting. “Drug shortages impact patients, families, caregivers, pharmacists, hospitals, nursing homes, hospices, and other individuals and entities across the health care system,” according to an April 2024 white paper from the U.S. Department of Health and Human Services.
To make matters worse, over the past 12 months, there have been shortages of medicines for which there is no alternative, says Erin Fox, senior pharmacy director at University of Utah Health. Fox gives one example: oxytocin, a drug that’s ordered by obstetricians to induce labor or, after delivery, to help stop maternal bleeding.
Which drugs are in short supply?
Hundreds of prescription medications are difficult or impossible to obtain as of April 2024. Among them are quinapril, which is primarily used to treat hypertension; injectable acyclovir, an antiviral; and propofol, for general anesthesia.
You can check the availability of a prescription drug by searching the U.S. Food and Drug Administration’s FDA Drug Shortages database or the American Society of Health-System Pharmacists’ ASHP Drug Shortages List. Click on any drug name to learn more about that specific shortage.
The effects of shortages on patients and their providers can be profound. Scott Matsuda, a member of the Patient and Family Advisory Council at the nonprofit Patient Access Network (PAN) Foundation, has worked with cancer patients “who, all of a sudden, find their chemotherapy drugs aren’t available.” Sometimes, patients report that symptoms of their cancers return soon after they stop taking their first-choice chemo, he adds.
No health care setting has been spared, not even hospital operating rooms. Dr. Jesse Ehrenfeld, an anesthesiologist and the president of the American Medical Association, at times has had to use second-choice drugs to induce anesthesia. These medications may have additional side effects, such as lasting longer than necessary, he said.
“Complex workarounds also have the potential to introduce errors,” says Ehrenfeld. “And I’ve had colleagues who had to delay or cancel care due to a shortage.”
Why are so many drugs in short supply?
What causes shortages? About 12% of them are due to manufacturing problems, as when a tornado hit a Pfizer plant in North Carolina, according to drugmakers’ reports compiled by the ASHP. Another 14% of shortages happen when demand suddenly outruns supply; for example, that occurs when demand for the antiviral Tamiflu spikes during a severe flu season. And 12% are due to a business decision, like when a drug manufacturer decides they can reap greater profits by making a different drug.
But the biggest category of reasons that manufacturers give for a shortage, at 60%, is “unknown/would not provide.” Ehrenfeld says, “That’s called flying blind. In most cases, we really don’t have an attributable cause, which makes it hard to pinpoint sustainable solutions.”
What’s being done to solve this multifaceted problem?
Drug shortages are a tough problem because they have such diverse causes. Stakeholders have been seeking solutions for decades, but shortages have continued throughout health care.
ASHP has recommended that, for starters, Congress give the FDA the power to levy “meaningful penalties” on drugmakers that fail to report manufacturing and supply chain problems. Failure to report is rampant in the industry.
“We think FDA requiring greater transparency in manufacturing and distribution could help us understand the causes and mitigate the challenges,” says Ehrenfeld.
The pharmacist group also recommends that to improve the profitability of generics, the FDA waive some fees on manufacturers who promptly bring these lower-priced drugs to market.
Some observers are hopeful that momentum is gathering for impactful action. “I’ve been working on drug shortages since 2001, and we now have the most interest in Congress and elsewhere that I’ve ever seen,” says Fox, who has testified about the problem at Senate committee hearings.
How can you work around a shortage of your drug?
The bottom line for health care consumers is that systemic problems with prescription drug supplies will likely persist. If you’re faced with a shortage of a drug you need, these steps will improve your chances of getting hold of it more quickly.
Refill prescriptions as early as your insurer will let you. Ordering prescriptions ahead can give you more options for obtaining a refill before you run out.
Contact your prescriber. Let them know that your prescription isn’t available at your pharmacy or will be delayed. Solicit their suggestions for other ways to get the drug, a generic or brand-name equivalent, or an alternative medication that would work for you.
Ask your insurer to cover the brand-name version if the generic drug is unavailable. If your insurer resists paying for the more expensive brand-name drug, ask your prescriber to go to bat for you.
Develop a long-term working relationship with your pharmacist.
If the pharmacist knows you’re a regular customer, they may be more likely to hustle to find a supplier that has your medication.
Try other pharmacies. Drugs in shortage are often distributed unevenly among pharmacies. Call around and see if another retailer in your area has a supply. If your insurer has a mail-order prescription option, consider trying it.
Have you been thinking, “Should I move to Charleston”? Known for its rich history, charming architecture, and Southern hospitality, Charleston has been capturing the hearts of people for centuries. But before you start packing your bags, it’s essential to weigh the pros and cons of calling this coastal gem home. In this article, we’ll dive into everything Charleston, exploring its unique culture, lifestyle offerings, and potential challenges to help you decide if the Holy City is the right move for you.
Charleston at a Glance
Walk Score: 40 | Bike Score: 50 | Transit Score: 24
Median Sale Price: $560,000 | Average Rent for 1-Bedroom Apartment: $1,500
Charleston neighborhoods | Houses for rent in Charleston | Apartments for rent in Charleston | Homes for sale in Charleston
Pro: Beautiful historic architecture
Charleston is renowned for its well-preserved historic architecture. The city’s Rainbow Row is a testament to this, offering a colorful glimpse into 18th-century life. Walking tours around the Battery showcase historic homes that have stood the test of time. These structures provide a unique backdrop for the city, attracting history buffs and architecture enthusiasts alike. The city is like a living museum, where every corner tells a story.
Con: Humidity and heat
The summer climate in Charleston can be a significant drawback. The combination of high temperatures and intense humidity makes outdoor activities challenging. This weather can be particularly oppressive in July and August, where it’s not uncommon for the heat index to soar. Many people find air conditioning a necessity, not a luxury, affecting both comfort and utility bills.
Pro: Thriving culinary scene
Charleston’s culinary scene is a major attraction. The city boasts an impressive array of dining options, from traditional Southern comfort food to innovative seafood dishes. Restaurants like Husk and FIG have received national acclaim, putting Charleston on the map for foodies. The annual Charleston Wine + Food Festival further highlights the city’s gastronomic prowess, drawing chefs and food enthusiasts from around the globe.
Con: Seasonal allergy concerns
For those sensitive to pollen, Charleston can be challenging, especially in the spring. The city’s abundant greenery and floral blooms, while beautiful, contribute to high pollen counts. This can lead to uncomfortable allergy symptoms for many residents. The high humidity levels also promote mold growth, which can exacerbate allergies and respiratory issues, making it a significant concern for some.
Pro: Beach proximity
Living in Charleston means being just a short drive away from some of the most beautiful beaches on the East Coast. Folly Beach, Sullivan’s Island, and Isle of Palms offer residents and visitors a chance to enjoy sandy shores and ocean waves. These beaches are perfect for a variety of activities, from surfing and swimming to simply soaking up the sun. It’s a coastal lifestyle that’s hard to beat.
Con: Risk of flooding
Located on the coast, Charleston faces an extreme risk of flooding, especially during hurricane season. The city’s low-lying areas are particularly vulnerable, with heavy rains often leading to street flooding and sometimes, property damage. Efforts to improve drainage and infrastructure are ongoing, but the threat remains a significant concern for residents, impacting both daily life and insurance costs.
Pro: Cultural events and festivals
Charleston is a hub for cultural events and festivals throughout the year. The Spoleto Festival USA, for example, is an internationally recognized arts festival that transforms the city into a dynamic stage for performers from around the world. There are also numerous other events, such as the Charleston International Film Festival, that celebrate the arts, music, and culture, providing endless entertainment and enrichment opportunities for residents.
Con: Limited public transportation
With a Transit Score of 24, many find the public transportation system lacking in Charleston. The CARTA bus service covers the city, but routes and frequencies may not meet everyone’s needs. This limitation affects daily commutes and accessibility to certain areas, emphasizing the need for personal transportation or reliance on ride-sharing services.
Charleston is often praised for its friendly and welcoming community. The city embodies a strong sense of Southern hospitality, where neighbors are quick to offer a smile or a helping hand. This warm atmosphere makes it easy for newcomers to feel at home. Community events, from local farmers’ markets to neighborhood block parties, foster a sense of belonging and togetherness.
Con: Seasonal tourists
While tourism boosts Charleston’s economy, the influx of visitors during peak seasons can be overwhelming. Popular areas like King Street and the Historic District become crowded, making it difficult to navigate and enjoy the city’s amenities. The demand from tourists can also lead to higher prices in restaurants and shops, further impacting locals’ daily lives.
Pro: Access to outdoor recreation
Charleston offers a plethora of outdoor recreation opportunities. The city’s parks, such as James Island County Park, provide spaces for hiking, biking, and picnicking. Water sports enthusiasts can enjoy kayaking and paddle boarding in the many rivers and inlets. The mild climate for most of the year supports an active lifestyle, encouraging locals to explore the natural beauty surrounding them.
Jenna is a Midwest native who enjoys writing about home improvement projects and local insights. When she’s not working, you can find her cooking, crocheting, or backpacking with her fiancé.
Personal loans are repaid in monthly installments over a set period called the loan term. Choosing the right personal loan term is important because it helps determine how much you’ll pay each month and the interest costs overall.
Here’s what you need to know about personal loan terms and how to choose the best one for you.
What is a common personal loan term length?
Personal loan terms are usually from two to seven years, though it varies by lender. Some lenders have one-year loans while others offer specific types of personal loans, like home improvement loans, with repayment periods of 10 years or longer.
How term length affects personal loans
The amount of time you have to pay off a personal loan affects your monthly payments and the total interest paid over the life of the loan.
A shorter-term loan has a higher monthly payment but costs less total interest, while a longer-term loan has lower monthly payments and higher interest costs.
For example, on a $10,000 loan with a 15% annual percentage rate (APR) and a three-year term, the monthly payment will be about $347 with $2,480 in total interest. That same loan with a five-year repayment term would have monthly payments of $238 and cost $4,274 in overall interest.
Use this personal loan calculator to see how different term lengths affect a loan’s monthly payment and interest costs.
Loan details
Your loan estimate
Monthly payment
$212.47
Total principal
$10,000
Total interest payments
$2,748.23
Total loan payments
$12,748.23
Payoff date
05 / 2029
Show amortization schedule
Payment date
Principal
Interest
Monthly payment
Principal balance
May 2024
$129.14
$83.33
$212.47
$9,870.86
Jun 2024
$130.21
$82.26
$212.47
$9,740.65
Jul 2024
$131.30
$81.17
$212.47
$9,609.35
Aug 2024
$132.39
$80.08
$212.47
$9,476.96
Sep 2024
$133.50
$78.97
$212.47
$9,343.46
Oct 2024
$134.61
$77.86
$212.47
$9,208.85
Nov 2024
$135.73
$76.74
$212.47
$9,073.12
Dec 2024
$136.86
$75.61
$212.47
$8,936.26
Jan 2025
$138.00
$74.47
$212.47
$8,798.26
Feb 2025
$139.15
$73.32
$212.47
$8,659.11
Mar 2025
$140.31
$72.16
$212.47
$8,518.80
Apr 2025
$141.48
$70.99
$212.47
$8,377.32
May 2025
$142.66
$69.81
$212.47
$8,234.66
Jun 2025
$143.85
$68.62
$212.47
$8,090.81
Jul 2025
$145.05
$67.42
$212.47
$7,945.76
Aug 2025
$146.26
$66.21
$212.47
$7,799.51
Sep 2025
$147.47
$65.00
$212.47
$7,652.03
Oct 2025
$148.70
$63.77
$212.47
$7,503.33
Nov 2025
$149.94
$62.53
$212.47
$7,353.39
Dec 2025
$151.19
$61.28
$212.47
$7,202.20
Jan 2026
$152.45
$60.02
$212.47
$7,049.74
Feb 2026
$153.72
$58.75
$212.47
$6,896.02
Mar 2026
$155.00
$57.47
$212.47
$6,741.02
Apr 2026
$156.30
$56.18
$212.47
$6,584.72
May 2026
$157.60
$54.87
$212.47
$6,427.12
Jun 2026
$158.91
$53.56
$212.47
$6,268.21
Jul 2026
$160.24
$52.24
$212.47
$6,107.98
Aug 2026
$161.57
$50.90
$212.47
$5,946.41
Sep 2026
$162.92
$49.55
$212.47
$5,783.49
Oct 2026
$164.27
$48.20
$212.47
$5,619.22
Nov 2026
$165.64
$46.83
$212.47
$5,453.57
Dec 2026
$167.02
$45.45
$212.47
$5,286.55
Jan 2027
$168.42
$44.05
$212.47
$5,118.13
Feb 2027
$169.82
$42.65
$212.47
$4,948.31
Mar 2027
$171.23
$41.24
$212.47
$4,777.08
Apr 2027
$172.66
$39.81
$212.47
$4,604.42
May 2027
$174.10
$38.37
$212.47
$4,430.32
Jun 2027
$175.55
$36.92
$212.47
$4,254.76
Jul 2027
$177.01
$35.46
$212.47
$4,077.75
Aug 2027
$178.49
$33.98
$212.47
$3,899.26
Sep 2027
$179.98
$32.49
$212.47
$3,719.28
Oct 2027
$181.48
$30.99
$212.47
$3,537.81
Nov 2027
$182.99
$29.48
$212.47
$3,354.82
Dec 2027
$184.51
$27.96
$212.47
$3,170.31
Jan 2028
$186.05
$26.42
$212.47
$2,984.25
Feb 2028
$187.60
$24.87
$212.47
$2,796.65
Mar 2028
$189.17
$23.31
$212.47
$2,607.49
Apr 2028
$190.74
$21.73
$212.47
$2,416.75
May 2028
$192.33
$20.14
$212.47
$2,224.42
Jun 2028
$193.93
$18.54
$212.47
$2,030.48
Jul 2028
$195.55
$16.92
$212.47
$1,834.93
Aug 2028
$197.18
$15.29
$212.47
$1,637.75
Sep 2028
$198.82
$13.65
$212.47
$1,438.93
Oct 2028
$200.48
$11.99
$212.47
$1,238.45
Nov 2028
$202.15
$10.32
$212.47
$1,036.30
Dec 2028
$203.83
$8.64
$212.47
$832.47
Jan 2029
$205.53
$6.94
$212.47
$626.93
Feb 2029
$207.25
$5.22
$212.47
$419.69
Mar 2029
$208.97
$3.50
$212.47
$210.71
Apr 2029
$210.71
$1.76
$212.47
$0.00
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How to choose between shorter and longer loan terms
Try to balance short- and long-term affordability when choosing a loan term. The ideal loan term is the shortest one you can get while still being able to comfortably afford the monthly payments.
A shorter loan term makes sense when:
You want to pay off the loan fast.
You want to save money in interest.
You can afford a higher monthly payment.
You’re borrowing a small amount of money.
A longer loan term makes sense when:
You want to keep monthly payments low for the full loan term.
You’re borrowing a large amount of money and need a longer time to pay it off.
What to consider when choosing a personal loan term
Loan amount: It may be easier to repay a small loan in a short period, but a longer term may be needed to repay a large amount of money. Some lenders, such as LightStream, offer terms of 10 years or longer for home improvement loans.
APR: A lender may offer lower APRs on shorter-term loans because there’s less time for a borrower’s financial situation to change during a short repayment term, which lowers the risk of default. When comparing personal loan offers, take note of the APR at different term lengths.
Monthly payments: Make sure you can comfortably afford the monthly payment for the full loan term. Many lenders charge late fees for missed payments, and your credit score can drop significantly if you miss a payment by more than 30 days.
Total interest costs: If your offer doesn’t outline the total interest costs, use a personal loan calculator to see how much you’ll pay in total interest for the loan. Gauge whether you feel comfortable with the overall cost of the loan at that term length.
Potential changes to your future budget: Personal loans are typically fixed-rate loans, which means monthly payments stay the same throughout the life of the loan. If you anticipate having less cash flow in the coming months or years, a loan term with lower monthly payments may be the right choice.
How to get a personal loan
Check your credit. Lenders typically use credit score, credit history, income and existing debts to determine if a borrower qualifies for a personal loan. Get a copy of your credit report before applying for a loan to understand what’s influencing your score. You can get your report for free at annualcreditreport.com or on NerdWallet. Dispute credit report errors that could be dragging your score down, such as an incorrect balance on a credit account.
Review your budget. Examine cash flow to see what size monthly payment you can afford. Use a personal loan calculator to determine the loan term and APR that would give you affordable monthly payments.
Pre-qualify. Many lenders let you pre-qualify for a personal loan with no impact to your credit score. Pre-qualifying shows the likelihood of loan approval, plus it gives an estimate of your loan amount, APR, loan term and monthly payments.
Compare offers. Once you’ve pre-qualified with multiple lenders, compare offers to see which best fits your needs. Use APR for an apples-to-apples comparison of the cost of the loan.
Apply. When you’re ready to accept a loan offer, you’ll submit a formal application. You’ll likely need to show documents to verify your identity and income, and the lender will run a hard credit check, which will cause a temporary dip in your credit score. If approved, most lenders will send funds within a week. Some lenders can fund a loan the same or the next day after you’re approved. Your first payment is typically due about 30 days later.
Frequently asked questions
How long do you usually have to repay a personal loan?
Personal loan repayment terms are generally two to seven years, but it varies depending on the lender.
Can you get a 10-year personal loan?
Most personal loan terms are capped at five or seven years, but some lenders offer 10-year repayment terms for home improvement projects.
Can you change your personal loan term length?
You usually can’t change the personal loan term, but you may be able to refinance your loan to replace it with a new loan that has a different term. Also, if the lender allows you to temporarily pause payments due to financial hardship, the loan term may be extended to make up for the skipped payments.
Can you pay off a personal loan early?
You can pay off your personal loan early by paying more than the required monthly payment or by making extra payments throughout the month. Most lenders don’t charge a prepayment penalty, but it’s a good idea to check the loan agreement just in case.
Welcome to the picturesque city of Newton where history meets modern charm and a strong sense of community prevails. Nestled just outside of Boston, Newton boasts a unique blend of suburban tranquility and urban convenience. With its tree-lined streets, top-rated schools, and diverse neighborhoods, Newton offers a welcoming environment for residents of all ages. There’s a neighborhood to suit every lifestyle from the historic architecture of Newton Centre to the bustling energy and Italian heritage of Nonantum.
Searching for the perfect apartment in the heart of Newton or a cozy condo in a peaceful corner of the city? You’ve come to the right place. In this Apartment Guide article, we’ll cut to the chase, breaking down the pros and cons of moving to Newton. Let’s get started and see what awaits in this charming town.
Pros of living in Newton, MA
1. Top-notch education
Newton is regionally renowned for its exceptional public school system. It consistently ranks among the best in Massachusetts. The city’s commitment to education is evident through its well-funded schools, dedicated teachers, and a wide range of academic and extracurricular opportunities for students. Newton is also close to several prestigious private schools such as the Newton Country Day School and the Commonwealth School, providing families with diverse options for their children’s education.
2. Green spaces and parks
Residents are fortunate to have access to an abundance of green spaces and parks. Newton has over 1000 acres of parkland, including the picturesque Crystal Lake and the Newton Commonwealth Golf Course. Whether it’s for leisurely strolls, outdoor sports, or simply enjoying nature, the well-maintained parks in Newton provide a tranquil escape from the bustle of Boston.
3. Vibrant cultural scene
Newton is home to numerous art galleries, theaters, and music venues. Events like the Newton Open Studios, run by the Newton Art Association, offer a unique opportunity to engage directly with talented local artists. Arts and culture lovers also have easy access to the incredible museums, theaters, and galleries of Boston.
4. Convenient access to Boston
One of the major advantages of living in Newton is its proximity to Boston, which is only a 15 minute drive away. With just a short commute via car, train, or bus, residents can easily travel to Boston for work, entertainment, and cultural experiences. This convenient access to Boston’s amenities and opportunities adds an extra layer of appeal to living in Newton. Conversely, Newton offers Boston residents a serene and charming alternative to the busy Boston streets.
5. Strong sense of community
Residents of Newton actively participate in local events, volunteer initiatives, and neighborhood associations. The city’s close-knit neighborhoods and friendly atmosphere create a welcoming environment.
6. Culinary diversity
Foodies in Newton are spoiled for choice with an array of dining options representing diverse cuisines. From cozy cafes and family-owned eateries to upscale restaurants like sycamore. and Tartuffo, the city’s culinary scene caters to a wide range of palates and budgets.
7. Historic charm
Newton boasts a rich history and architectural heritage, with many well-preserved historic buildings and landmarks that add character to the city. The Jackson Homestead offers a fascinating glimpse into the area’s past, while the picturesque Newton Centre Historic District provides a charming backdrop for leisurely walks and exploration.
Cons of living in Newton, MA
1. High cost of living
One of the primary drawbacks of living in Newton is the high cost of living, including steep housing prices and overall expenses. The city’s desirable location, excellent schools, and quality of life contribute to the premium cost of residing in this community.
2. Limited public transportation options
Despite its proximity to Boston, Newton has limited public transportation options, which can be a drawback for residents who rely on public transit for their daily commutes. While there are bus routes and commuter rail services, the overall public transportation infrastructure within the city itself may not be as extensive or convenient as in other urban areas.
3. Traffic congestion
During peak hours, the city’s roadways and intersections may become congested, impacting the overall ease of travel within and around the area. However, it’s important to remember that this is common in the Boston area and surrounding towns.
4. Limited nightlife options
For those seeking a lively nightlife scene, Newton may not offer as many options compared to nearby Boston. While there are bars, restaurants, and entertainment venues, the nightlife in Newton is relatively subdued and wraps up early.
5. Harsh winters
The New England region, including Newton, experiences harsh winters with cold temperatures, snowfall, and inclement weather conditions. While the winter season can be picturesque, it also brings challenges such as snow removal, icy roads, tire chains, and the need for extra precautions during the colder months.
6. Limited housing inventory
Housing in Newton primarily consists of single family homes so the share of apartment complexes and rental homes is smaller than many of the major cities. Furthermore, due to the high demand for housing in Newton there may be limited inventory available for sale, leading to a competitive real estate market.
7. Zoning restrictions
Zoning restrictions do not generally affect renters. But if you are hoping to buy a house in Newton eventually, you will want to be aware that the city has strict zoning regulations and restrictions. Many of these restrictions are in place to retain the character and history of the town. However, they can impact property development, renovations, and expansions. These regulations may pose challenges for homeowners looking to make major cosmetic or structural changes to their properties, requiring careful consideration and adherence to local zoning laws.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
To build credit with a secured credit card:
1. Keep your balance low.
2. Use it only for small regular purchases.
3. Monitor your spending.
4. Pay off the entire balance each month.
Whether you’re a teenager trying to start building credit or looking to rebuild your credit after some bad luck, it can be difficult to get creditors to give you opportunities. You know you need to build credit, but you can’t do it if no one will issue you credit. Fortunately, you can use a tool like a secured credit card.
Wondering how to build credit with a secured credit card? Read on to learn everything you need to know to start turning your credit around.
Table of contents:
Research your options
Put down your deposit
Spend wisely on your secured credit card
Never miss a bill payment
Track your progress on your credit report
Use your improved credit to graduate to an unsecured credit card
What is a secured credit card?
A secured credit card is just like a regular credit card, but it requires a deposit that covers the spending limit. Since the deposit will cover what you owe if you don’t pay your credit card bill, it reduces the credit card issuer’s risk when extending you credit.
It’s just like when your landlord requires you to pay a security deposit to cover any damages to the apartment. Even if you leave without paying for the repairs, the landlord can cover them using your security deposit.
Use the tips below to help you use your secured credit card responsibly and build your credit.
1. Research your options
Don’t sign up for just any secured credit card. Take the time to find the best secured credit card for your situation and carefully consider the pros and cons of secured credit cards before applying.
Start the process by checking your credit. While secured credit card issuers are more likely to extend you credit no matter your credit score, not all do. Make sure you know what your credit score is before applying.
Armed with your credit score, take some time to research different secured cards. While most secured credit cards don’t offer the same features as unsecured credit cards, you’ll find a few that do.
Consider which of the following features are most important to you:
Flexible deposits
Low annual fees
Automatic account reviews to determine if you’re ready for an unsecured credit card
No credit check (note that this may come with a higher annual fee)
Reward or cash back options
Finally, consider any potential costs associated with unsecured credit cards. Discover if the deposit is refundable and if there are any application or annual fees.
Once you’ve decided on a card, fill out the application and send in the application fee (if there is one).
2. Put down your deposit
After you’ve been approved, the credit card issuer will tell you your credit limit and ask you to pay your deposit. Make sure you do so quickly—if you don’t get your deposit in on time, they may close your account before you have a chance to use it.
Remember, the amount you’ll have to deposit will depend on your credit card issuer. Some secured credit card issuers require your deposit to cover the entire credit limit, while others may only require you to put down half of it. Some companies also allow you to raise your credit limit by increasing your deposit, while others aren’t as flexible.
3. Spend wisely on your secured credit card
After making your deposit, you can use your secured credit card like you would any other credit card to build credit. You can use your secured card to make purchases anywhere that takes a credit card, and when you hand your card to the sales clerk to make your purchase, they won’t be able to tell it’s a secured card.
But if you want to improve your credit, you must use your secured card wisely. Keep the following tips in mind:
Make regular small purchases with your secured card. Consider using your card for one type of purchase, such as gas or monthly subscriptions. This will keep your balance low while also keeping your spending in check.
Keep the balance as low as possible. Experts typically recommend keeping it below 30 percent, but since you’re actively working to improve your credit, try only using 10 percent of your available credit. This means that if your card has a limit of $1,000, you should keep your balance below $100. Small regular purchases will help you accomplish this.
4. Never miss a bill payment
The deposit on your secured credit card does not cover your purchases, so you still need to pay your monthly bill. While you are only required to pay the minimum balance, make it a habit to pay the entire balance off each month.
This will keep your credit utilization low and help you avoid paying interest on an unpaid balance. Avoiding interest charges is especially important on secured credit cards since they often carry higher interest rates than unsecured credit cards.
5. Track your progress on your credit report
As you use your secured credit card, monitor your credit score closely. While increasing your credit may be a slow process, seeing small gains can be motivating. Plus, it will help you ensure your credit report is accurate.
Some credit card companies are starting to offer credit monitoring services and include your credit score on your bill. If your credit card issuer doesn’t offer this, you can see your credit report at AnnualCreditReport.com.
6. Use your improved credit to graduate to an unsecured credit card
As your credit improves, you can upgrade to an unsecured credit card. Some companies also refer to this as “unsecuring” or” graduating” to an unsecured credit card.
Some secured credit card issuers will automatically upgrade you to an unsecured credit card, at which point they’ll usually apply your security deposit as a statement credit offsetting your purchases. You can also apply for an unsecured credit card, at which point you’ll close the secured credit card and the issuer will refund your deposit. The best time to upgrade to an unsecured credit card is when you feel confident in your credit card habits. You want to ensure you can use the credit card responsibly to keep building your credit.
What are the benefits of a secured credit card?
Secured credit cards offer several advantages:
Most of them report to the three major credit bureaus (Experian®, TransUnion® and Equifax®) so you can build your credit.
Since the security deposit covers their risk, secured credit card issuers are more likely to issue credit to people with no or poor credit.
You can gain credit card experience and develop healthy credit card habits.
Over time, you can work toward an unsecured credit card, which may offer better features.
How long does it take to build credit with a secured credit card?
How long it takes to build credit with a secured credit card depends on several factors, including your credit history and your behavior with the secured credit card. Someone who makes a lot of large purchases on their secured card might see their score improve slower than someone who only makes small purchases, even if both people pay their bills off in full each month.
Typically, it takes six months to a year to see your credit health improve, making a secured credit card one of the best ways to build credit relatively fast. Remember: a secured credit card doesn’t automatically improve your credit—you have to use the card responsibly.
FAQ
Learn more about using secured credit cards to improve your credit below.
How much will a secured credit card raise my score?
Using a secured credit card responsibly may help your credit slightly in the short term, especially when you combine it with other credit improvement strategies. Larger gains will come as you continue to work on your credit over the course of a year or two.
Your credit situation and how responsibly you use the secured credit card will determine how much it improves your credit. Increasing your credit takes time and patience—no credit improvement strategy offers an overnight fix.
Can you increase a secured credit card limit?
Secured credit cards often have low balances, but you may be able to get a credit limit increase. Contact your credit card issuer and ask if you can increase your deposit in exchange for a larger limit. You can also ask if you are eligible to graduate to an unsecured credit card, which typically comes with a larger credit limit.
Work on your credit with Lexington Law Firm
Remember: a secured credit card is a powerful tool to improve your credit, but only if you use it responsibly—spend wisely, pay your bill on time every time and keep your balance low. Take this time to develop a healthy relationship with credit card usage, be patient and trust the process.
If you’re looking to learn more about how to build your credit, the team at Lexington Law Firm can help. Get a free credit snapshot today to get started.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Obtaining a mortgage with a reduced interest rate is a crucial objective for many prospective homeowners. Getting a good interest rate can save borrowers thousands of dollars over the course of a loan and have a big impact on your financial health.
It takes research and preparation to navigate the complicated world of mortgage rates, but making the effort can pay off with lower monthly payments and significant long-term savings.
What Is the Best Way to Get a Lower Mortgage Rate?
Although there’s no one-size-fits-all approach that will help homebuyers qualify for a mortgage at a reduced mortgage rate, there are a few crucial steps one can take. These include carefully tending your credit score and diligently comparing lenders and financing choices.
This may be especially daunting to first-time homebuyers, but borrowers who learn how to lower their mortgage interest rate can better their chances of long-term financial stability and successful homeownership.
💡 Quick Tip: SoFi’s award-winning mortgage loan experience means a simple application — we even offer an on-time close guarantee. We’ve made $7.5 billion in home loans so we know a thing or two about what makes homebuyers happy.‡
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
Pros and Cons of a Lower Mortgage Rate as a Home Buyer
As a prospective homeowner, getting a reduced mortgage rate could offer many benefits, though there are a few potential challenges as well.
Pros:
• Decreased monthly payments: A lower interest rate usually results in a lower monthly mortgage payment, giving you more money for investments or other expenses.
• Long-term savings: Depending on the loan amount and term, even a small interest rate reduction can save a significant amount of money over the course of the loan — possibly tens of thousands of dollars. Experiment with a mortgage calculator to see how the interest rate and loan term impact the total interest paid over the life of the loan.
• Building equity faster: As a result of lower interest rates, a larger portion of your monthly payment is applied toward paying off the loan, hastening the process of building equity in your house.
Cons:
• Qualification requirements: Borrowers with a strong credit rating, steady income, and a sizable down payment are frequently eligible for the lowest rates offered by lenders. Achieving these requirements may prove difficult for some buyers.
• Higher upfront costs: Securing a lower interest rate may require paying higher upfront costs, such as points or a big down payment.
• Limited availability: Some purchasers may find that the lowest advertised rates are only accessible to customers who qualify for certain loan types under particular circumstances.
• Market volatility: Interest rates can change over time for an array of economic reasons. An adjustable-rate mortgage may offer a borrower a low initial interest rate, but savings could be outweighed by rate hikes in the future.
Recommended: The Best Affordable Places to Live in the U.S.
Ways to Get a Lower Mortgage Rate
If you’re wondering how to get a lower interest rate on a mortgage, here are tactics you’ll want to take a look at:
Shop for Mortgage Rates
Finding the best loan terms for a house purchase requires doing your research on mortgage interest rates. Get quotes first from a variety of lenders, such as banks, credit unions, and online lenders. Consider whether you are eligible for a loan guaranteed by the government, such as a VA loan (from the U.S. Department of Veterans Affairs) or an FHA loan, backed by the Federal Housing Administration. Don’t accept the first mortgage deal you run across; shop around and compare rates offered by different lenders.
To evaluate rates, fees, and terms side by side, make use of online comparison tools. Never be afraid to ask a lender if they can match a competitor’s rate or give better conditions. Other considerations, like closing expenses and the caliber of the customer service, may influence your choice of mortgage, and the lowest rate that is advertised may not always be the best one. Make sure you have researched your selection and that it is in line with your long-term financial objectives.
Nurture Your Credit Score
Borrowers with better credit scores usually receive reduced rates from lenders. A better rate might result from paying your bills on time, cutting overall debt, fixing any inaccuracies on your credit report — or all three. Get a copy of your credit report from each of the big credit reporting agencies, check it for accuracy, and quickly request fixes for any inaccuracies. Next, focus on paying off current debts on time, maintaining modest credit card balances, and refraining from creating new credit lines unnecessarily.
Choose Your Loan Term Carefully
Investigate different types of mortgage loans, including fixed-rate and adjustable-rate mortgages (ARMs). Each type has a different interest rate structure and set of requirements. Shorter loan terms of 15 or 20 years usually have cheaper interest rates than 30-year mortgages, which results in significant savings over the course of the loan. They also typically have larger monthly payments.
Longer loans spread out payments over an extended period of time, which lowers the monthly payment but comes with higher overall interest charges. When choosing a loan term, take your cash flow, long-term objectives, and financial status into account. While a longer term could offer more flexibility with lower monthly payments, choosing a shorter term can help save money and allow you to pay off the mortgage sooner.
Make a Larger Down Payment
Increasing your down payment is one of the best ways to get a lower mortgage rate. For borrowers who are able to make a substantial down payment — typically 20% or more of the purchase price of the home — lenders frequently offer lower interest rates. A higher down payment shows financial responsibility and lowers the lender’s risk, which makes for a more desirable borrower. Borrowers can also eliminate private mortgage insurance (PMI) with a sizable down payment, which further reduces your monthly payment. Although stowing away a down payment takes time and discipline, there could be significant interest savings over the course of the loan.
Buy Mortgage Points
Purchasing discount points, sometimes referred to as mortgage points, can be a calculated move to obtain a cheaper mortgage rate. Each point costs 1% of the total loan amount and lowers the interest rate by a specific amount, usually 0.25% per point. Although purchasing points necessitates a one-time payment, it might provide substantial savings during the loan term. Before you purchase points, make sure you set aside cash reserves for emergencies. And ask yourself if you plan to stay in the house past the breakeven point (the point at which the monthly savings from a lower payment equal the initial cost of purchasing points).
Lock in Your Mortgage Rate
Once you’ve found a good rate and gone through the mortgage preapproval process, locking in your rate is a crucial step in protecting against potential rate increases during the closing process. When a rate is locked in, the lender agrees to guarantee the agreed-upon interest rate for a predetermined amount of time — usually 30 to 60 days — while the loan application is being processed. This guarantees that the rate won’t change during this time, even if market rates rise. If rates drop, though, one might not be able to benefit from the lower rates unless the lender has a float-down option.
Refinance Your Mortgage
If mortgage rates drop significantly (or your financial profile improves markedly) after you purchase your home, refinancing your mortgage can cut monthly payments and total loan costs. But it’s crucial to take into account refinancing charges, like appraisal and closing costs, and balance these against the possible savings from a lower rate. Homebuyers should think about long-term financial objectives and how refinancing fits within their total budget. Working with a reliable lender and thoroughly weighing options can help one decide if refinancing is the best course of action.
💡 Quick Tip: Have you improved your credit score since you made your home purchase? Home loan refinancing with SoFi could get you a competitive interest rate with lower payments.
Searching for Mortgage Rate Tips
Start by keeping an eye on market developments and learning how the economy affects mortgage rates. To be eligible for reduced rates, carefully manage your credit score. You can also get reasonable rates and better conditions by shopping around and comparing offers from different lenders. To optimize savings, think about the advantages of increasing your down payment, buying discount points, and selecting the ideal loan term. Lock in a cheaper rate while the market is favorable.
Recommended: Home Loan Help Center
The Takeaway
Prospective homeowners can improve their chances of obtaining a favorable rate and ultimately save a large amount of money over the course of their loan by raising their credit score, shopping around for the best rates, and negotiating with lenders. Market conditions, lender competition, and your individual financial situation will factor into your mortgage terms. Greater financial stability can be achieved from taking proactive measures to achieve a cheaper mortgage rate, whether through buying discount points or increasing the down payment.
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
Can you ask your mortgage company to lower your interest rate?
Yes, you can negotiate with your mortgage company to potentially lower your interest rate before you sign on for a loan. After you have a mortgage, you could ask your lender about a mortgage recast or a refinance.
What makes mortgage interest rates go down?
Mortgage interest rates can decrease due to factors such as economic downturns, changes in federal monetary policy, and market competition among lenders.
Can you negotiate a lower interest rate on a mortgage?
Yes, you can use variables like your creditworthiness, the state of the market, and lender competition to negotiate a lower interest rate on a mortgage.
Photo credit: iStock/Delmaine Donson 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.
‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will give you a credit toward closing costs or additional expenses caused by the delay in closing of up to $10,000.^ The following terms and conditions apply. This Guarantee is available only for loan applications submitted after 04/01/2024. Please discuss terms of this Guarantee with your loan officer. The mortgage must be a purchase transaction that is approved and funded by SoFi. This Guarantee does not apply to loans to purchase bank-owned properties or short-sale transactions. To qualify for the Guarantee, you must: (1) Sign up for access to SoFi’s online portal and upload all requested documents, (2) Submit documents requested by SoFi within 5 business days of the initial request and all additional doc requests within 2 business days (3) Submit an executed purchase contract on an eligible property with the closing date at least 25 calendar days from the receipt of executed Intent to Proceed and receipt of credit card deposit for an appraisal (30 days for VA loans; 40 days for Jumbo loans), (4) Lock your loan rate and satisfy all loan requirements and conditions at least 5 business days prior to your closing date as confirmed with your loan officer, and (5) Pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. This Guarantee will not be paid if any delays to closing are attributable to: a) the borrower(s), a third party, the seller or any other factors outside of SoFi control; b) if the information provided by the borrower(s) on the loan application could not be verified or was inaccurate or insufficient; c) attempting to fulfill federal/state regulatory requirements and/or agency guidelines; d) or the closing date is missed due to acts of God outside the control of SoFi. SoFi may change or terminate this offer at any time without notice to you. *To redeem the Guarantee if conditions met, see documentation provided by loan officer. 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.
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 cost to buy a home has reached historic highs in the U.S. — the median price of a home is $420,800, according to the Federal Reserve Bank of St. Louis — and housing and mortgage costs are increasingly turning into a November election issue.
Home shoppers today need to an annual income of $114,000 in order to comfortably afford a typical home in the U.S., according to Redfin, nearly double what was needed to afford a typical home in 2020. That figure is far above the 2022 median household income of $74,580, according to the Census Bureau.
Higher monthly payments are driven by higher home prices as well as significantly higher interest rates. Mortgage interest rates, which dipped to an historic low of 2.65% on a 30-year fixed mortgage in 2021, have soared beyond 7%, higher than they’ve been since 2001. Interest rates are set by the independent Federal Reserve, and President Joe Biden has insisted on the Fed’s independence. The Federal Reserve has been raising interest rates since 2021 in order to combat stubborn inflation.
smaller, entry-level homes, several experts agree.
Once interest rates are removed from the picture, “then you’re left focusing mainly on the supply shortfall,” said Jim Parrott, fellow at the Urban Institute and former Obama White House economic adviser.
The housing market has seen a severe shortage of smaller starter homes, Parrott said. Builders, he said, are incentivized to build large, often mansion-like homes, which more easily turn a profit.
“The cost of building larger homes tends to be quite high, and it’s easier to recoup those costs if you’re making big, expensive homes,” Parrott said.
The federal government needs to “make the math for building homes at the bottom of the market more favorable” for developers, Parrott suggested. And Congress can do this with the tax code. One approach would be to give a tax cut to any builder who constructs a residence for a first-time home buyer at below the median home price, Parrott said.
“You need to provide some sort of tax benefit for building homes in the parts of the market where we need them the most,” Parrott said.
But getting this divided Congress to work together on something like this would be challenging, Parrott said.
“I’m afraid that the legislative environment right now just isn’t conducive to this sort of big, bipartisan effort,” Parrott said. “Hopefully after the election we’ll see a reboot that provides a more hopeful window.”
Withhold funding from localities that don’t change zoning laws
Most of the control over zoning lies with state and local governments. And states have been working to overhaul zoning to ease restrictions on denser residential construction. But the federal government isn’t entirely powerless on zoning.
Parrott said the federal government has used a carrot approach to encourage localities to rezone in favor of denser housing, but now he thinks maybe it’s time to use a stick. For instance, any federal funding for communities could be conditioned on how zoning decisions are made. Communities receive substantial financial support from the Department of Housing and Urban Development (HUD), the Transportation Department and other agencies for projects, Parrott noted.
“If federal policymakers were to condition even a little bit some of that funding on whether or not local decision-making is supportive of or prohibitive of more density,…then you could begin to change things at the local level in a way that would really matter,” Parrott said.
Such a move would be almost certain to trigger strict opposition from localities and unions. But more states have already been enacting legislation to supersede local zoning rules, said Alex Horowitz, director of housing policy at The Pew Charitable Trusts. Horowitz said nine states have passed laws allowing accessible dwelling units or ADUs — like small, independent, mother-in-law suites — on homeowners’ properties.
Sell federal land to use for housing
“The federal government owns hundreds and hundreds of millions of acres, and we’re not talking about the National Parks here,” said Edward Pinto, co-director of the American Enterprise Institute’s Housing Center.
But that’s a proposal that Congress would need to authorize.
It has been tried. Sen. Mike Lee’s HOUSES Act of 2022 would have approved the sale of federal land to states and localities for below-market rates for housing projects. The federal government owns two-thirds of the land in Lee’s home state of Utah, and the gap between median household income and median home cost is largest in the West, according to HUD.
But his bill went nowhere. The Bureau of Land Management, which oversees federal land, said in written Senate testimony that it would be forced to “sell land without sufficient evaluation of the values to the public or to future generations, or sufficient compensation to the American taxpayer.”
The sale of unused land could also attract opposition from environmentalist groups, though sometimes that can be overcome. In March, Washington Gov. Jay Inslee signed a law that will allow that state’s Department of Natural Resources (DNR) to transfer some of its property to localities to build affordable housing.
Washington state GOP Rep. April Connors, who introduced the bill, noted that that the DNR had 7,000 acres of land that was unusable for timber harvesting because it was too close to developed land. Building housing on it could ease the shortage of homes in Washington, Connors noted in a statement, pointing out that the state has the “fewest housing units per household in the nation and nearly half of renters spend a third of their income on rent.”
Improve consumer access to financing for manufactured housing
Manufactured homes are factory-built residences built after 1976 — formerly known as mobile homes — that can be placed on land. The average new manufactured home sold for $126,600 in November 2023, according to the Census Bureau.
But loans are harder for homebuyers to secure for manufactured homes than for traditional ones, Horowitz said. And since manufactured housing usually involves shipping over state lines, the federal government plays a big role. HUD controls access to financing for manufactured homes, and rules are stricter than they are for traditional homes.
Interest rates are typically also higher for manufactured home loans than for traditional home loans, in part because unlike traditional homes, which tend to appreciate in value over time, manufactured homes can depreciate. The structures are also viewed as riskier than conventional homes because they’re usually harder to sell on the market. Horowitz suggests HUD could make it easier for borrowers to access loans.
Eliminate tax breaks for second (and third) homes
Congress could increase the national housing stock over time by eliminating tax breaks for any homes that aren’t a primary residence, said AEI’s Pinto.
Getting rid of the mortgage interest rate deduction for non-primary residences would eventually encourage many homeowners to sell, Pinto said.
“Why should they be subsidized by the tax code,” Pinto asked.
Without that tax break, hundreds of thousands of homes would come back onto the market as primary residences, Pinto said.
“It would cost the federal government basically nothing,” Pinto said. “They’d actually save some money on the tax savings, and it would not increase demand at all.”
This isn’t likely to happen soon though. Such a measure would have to be passed by Congress — and many lawmakers own second and third residences. And a number of their constituents and donors own multiple homes. Realtor interest groups would oppose it, too, Pinto said.
The most Congress has done in recent years to address tax breaks for expensive residences was in 2017, when the GOP-controlled Congress capped the deduction limit for state and local income taxes, which hit coastal, heavily Democratic states like New York and California particularly hard.
Still, eliminating the tax break for secondary homes is “low-hanging fruit,” and would increase supply and reduce demand simultaneously, Pinto said.
Economists mostly doubt that action by the Federal Reserve to significantly lower interest rates would help much.
“If the Fed were to cut rates in a way that allowed mortgage rates to fall to the 4% range, we would see both supply and demand increase in the housing market,” said Chen Zhao, who leads the economics team at Redfin.
And whether home prices rise or fall would depend on what then happens to housing supply and demand.
“If demand increases more, then prices would grow at a faster rate than they are currently,” Zhao said. “However, it’s also possible that supply would increase more because sellers have been so locked in by low existing mortgage rates. If that’s the case, then price growth could fall. I think it’s unlikely in either case that prices would fall outright.”
Would Biden or Trump’s policies help or hurt housing costs?
Former President Donald Trump hasn’t offered policy suggestions to address housing affordability yet, although he criticizes mortgage interest rates and home prices under President Biden.
The president has proposed giving a $10,000 tax credit to first-time middle class homebuyers, and up to $25,000 to first generation home buyers. He’s also introducing a $20 billion fund that in addition to helping build affordable rental units, is meant to peel away local barriers to housing development and spur the construction of starter homes.
Down payment assistance may help home shoppers in the near term, although the tax credit probably falls short of the traditional 20% down payment on most homes. With monthly payments at record highs, this down payment assistance would not lower monthly costs. And down payment assistance could have unintended consequences, Pinto said: “It would increase the price of entry level homes.”
The effect down payment assistance or a buyer tax credit would have on the housing market is complicated in a supply-constrained market, Horowitz said.
While Trump hasn’t made specific proposals on housing, his proposals in other policy areas would likely drive home prices up, Parrott said. Mass deportations of undocumented migrants, for instance, could drive the cost of labor higher, and raising tariffs on China could drive up material costs, Parrott said.
“The things that Trump has said relevant to housing almost all cut the wrong way,” Parrot said.
How home costs could affect the election
The cost of home ownership is a top concern for Democrats and Republicans, city dwellers and rural residents alike, said Parrott. Once an issue has broken through the barriers of red and blue, metro and rural, “then it changes the probability of something happening,” Parrott said.
“Housing has found its way to the grownups table, in effect, for the first time,” Parrott said.
And even though it’s the Fed that controls interest rates, Mr. Biden could be held accountable by voters.
“President Biden’s reelection is closely tied to the cost of homeownership and thus, the fixed mortgage rates,” Mark Zandi, chief economist at Moody’s Analytics predicted. “The fixed rate is currently just over 7%. If it rises above 8% for any length of time, his reelection odds will fade, and if it falls closer to 6% his odds will increase meaningfully, all else equal.”
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Kathryn Watson
Kathryn Watson is a politics reporter for CBS News Digital based in Washington, D.C.
For most Americans, having a car is a necessity. We need it to get to work, school, the grocery, the doctor, and all our weekly errands. Unfortunately, both new and used cars are expensive — and auto loan rates are on the rise as well.
So when buying a car, does it ever make sense to use a personal loan instead of traditional financing? We’ll break down the difference between personal loans and car loans and when you might want to use the former to buy a new set of wheels.
Personal Loan vs Auto Loan: An Overview
You can use a personal loan for almost anything, including buying a car. But why would you use a personal loan to purchase a vehicle when there are very specific loans — auto loans — to finance this purchase?
As we’ll see, personal loans can offer some benefits over car loans, including less buyer risk, no down payment needed, better negotiating power, and potential savings on car insurance. But car loans still have their place and may be cheaper in the long run.
Personal Loans
A personal loan allows you to borrow money from a bank, credit union, or lender to fund nearly any kind of purchase. People commonly use personal loans for debt consolidation, home renovations, weddings, vacations, and even new and used car purchases.
Personal loans can be unsecured (no collateral required) or secured (collateral required). For the sake of our personal loan vs. auto loan comparison, we’ll be looking at unsecured personal loans, as they’re more common.
Recommended: Types of Personal Loans
How Interest Rates Work on Personal Loans
Because unsecured personal loans aren’t backed by any collateral, interest rates tend to be higher than what you’d get for a car loan. Average personal loan interest rates vary depending on your credit score and the loan terms, but typically, they max out at 36%.
Most personal loans come with fixed rates, meaning your interest rate will stay the same over the life of the loan. It is possible, however, to get a variable-rate personal loan. Check out our guide to fixed vs. variable rate loans to figure out which is right for you.
Terms for Personal Loans
Personal loan terms vary by lender, but you can typically take out a loan with a repayment term of one to seven years. The faster you pay it off, the less you’ll pay in interest — but your monthly payments will be much larger. 💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.
Car Loans
When buying a new or used car through a dealership, the dealer’s finance department can help you find a loan through a bank or credit union. Alternatively — or when buying from a private seller — you can shop around for a car loan from various banks and credit unions on your own.
Auto loans are usually secured loans, meaning the car you’re buying serves as collateral. This means, if you fall behind on payments, the lender can repossess your car. (It’s possible, but less common and more expensive, to get a car loan without putting the car up as collateral.)
How Interest Rates Work on Car Loans
The collateral on the car loan reduces the risk to the lender, which usually results in a lower interest rate. Still, auto loan interest rates depend on your credit score.
Car loan rates for both new and used cars have increased in recent years, but they’re still typically lower than the average personal loan rate. Notably, car loan refinancing rates are lower than regular financing rates.
Terms for Car Loans
Like personal loans, car loans might stretch 84 months (that’s seven years), but some are as short as 24 months (two years). Also like personal loans, it’s common to repay your car loan over three to five years. 💡 Quick Tip: In a climate where interest rates are rising, you’re likely better off with a fixed interest rate than a variable rate, even though the variable rate is initially lower. On the flip side, if rates are falling, you may be better off with a variable interest rate.
Can You Use a Personal Loan to Buy a Car?
Yes, you can use a personal loan to buy a car. In fact, you can use a personal loan for (almost) anything. However, it often makes more sense to get traditional vehicle financing when buying a car.
Recommended: Personal Loan Calculator
Is It Better to Get a Personal Loan to Buy a Car?
In some ways, it can be better to buy a car with a personal loan. You don’t have to stress about saving up for a down payment, there’s no risk of your car being repossessed, and you might even have more negotiating power at the dealership.
However, many buyers prefer the structure of an auto loan. These loans tend to be cheaper in the long run because of the lower interest rates. And they’re easier to get — both because of lower credit score requirements for car loans and because dealerships can help you find the best car loan for you.
Pros & Cons: Car Loan vs Personal Loan
Buying a car with a personal loan instead of an auto loan has its share of advantages, but there are also drawbacks to consider.
Pros
• Less risk: When you take out a car loan, the car itself serves as collateral for the loan. If you miss enough payments, the lender could repossess your vehicle. With an unsecured personal loan, you don’t face that risk, though there are still consequences if you default on a personal loan.
• More negotiating power: When you don’t have to go through the hassle of securing financing, the car buying process is much easier and faster for you and the dealer. That means you might be able to negotiate a better deal, like a discount for paying in full.
• Lower insurance costs: When financing a car, the lender may require you to carry comprehensive, collision, and gap insurance. But when you pay for the vehicle outright with the funds from your personal loan, no one can require you to carry those car insurance coverages.
• No need to save for a down payment: Personal loans don’t require a down payment. Though some have origination fees, you might even be able to roll those into the cost of the loan. That means you could use a personal loan to get a car with no money down.
Cons
• Higher cost: Interest rates are typically higher for personal loans, which means you’ll end up spending more money on your car in the long run than you would if you got traditional auto financing. Origination fees for personal loans may also be higher than they are for car loans.
• Higher credit score requirements: Because auto loans are secured by the vehicle being financed, lenders are a little more willing to work with lower credit scores. The credit score you need for a personal loan is typically higher (around 670), though this varies by lender.
• More insurance risk: There may not be an auto lender requiring you to carry comprehensive, collision, or gap insurance, but declining those coverages just because your personal loan lender doesn’t mandate them could open you up to a lot of risk. If your car is totaled and you don’t have the proper coverage to get reimbursed, you’ll still be on the hook for making your personal loan payments — so think carefully before minimizing your car insurance coverage.
The Takeaway
Both auto loans and personal loans can help you get behind the wheel of a new (or used) daily driver. Determining which type of loan is right for you comes down to your needs and preferences.
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
Is it easier to get a personal loan or car loan?
Getting a car loan is usually easier than getting a personal loan. That’s because car loans are secured by the vehicle you’re buying. That means less risk to the lender, who will be willing to accept lower credit scores.
Should I take out a personal loan to buy a car?
While you can get an auto loan through a bank, credit union, or the dealership, you can also pay for a car with a personal loan. Personal loans reduce your risk — there’s no chance of your car being repossessed — and they may give you more negotiating power. However, personal loans typically cost more in the long run.
Am I allowed to use a personal loan to buy a car?
Yes, you can use a personal loan to buy a new or used car. In fact, you can use personal loans for just about anything. Just read the fine print of any loan agreement to make sure.
Photo credit: iStock/skynesher
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