Many people consider homeownership a rite of passage, a part of the American Dream, and a key way to build wealth. But recently, as home prices and mortgage interest rates have risen, some may wonder, “Is buying a home a good investment, no matter what?”
It can be challenging to gather enough funds for a down payment, qualify for a mortgage, and then afford all of the costs that go along with homeownership, such as property taxes, maintenance expenditures, and utilities. But to live in a place you love while building equity can be a win-win.
So if you’re wondering “Is buying a house a good investment?” vs. say, investing your money, you’ll have to take a closer look at how homeownership relates to your personal financial situation. Read on to learn how to evaluate what will be the right decision for you, starting with important questions to contemplate.
Is It a Good Investment to Buy a House?
In order to determine if buying a home is a good investment for you, you’ll need to estimate the amount of time you plan to own the house and the real estate marketplace dynamics.
• If you don’t plan to own the house for at least five years, you may not break even when you sell the home. When you buy a home, you pay for more than just the house and those costs can add up. You’re often paying for appraisals, mortgage application fees, inspections, movers, real estate agent fees, and that can add up to thousands of dollars.
In order to recoup all those fees, conventional wisdom says you need to wait at least five years for your home to appreciate before selling it. If you plan to live somewhere for less than five years, it could make the most financial sense just to rent property.
• You may also want to consider other aspects of whether it’s a good time to buy a house. For example, is it a hot or cool market? Are you likely to wind up in a bidding war (and possibly overpay) because there isn’t enough supply to meet demand? Are interest rates likely to fall over the next year? These dynamics can impact whether now is the right time to jump into the housing market.
💡 Quick Tip: With SoFi, it takes just minutes to view your rate for a home loan online.
Do You Have Sufficient Savings to Buy a House?
In order to buy a home, you’ll generally have to take out a mortgage to finance your home purchase. Before that’s not the only expense. These costs must also be covered:
• Before you even get to the mortgage stage, you’ll have to save for a down payment (which is often anywhere between 3% and 20% of the property’s purchase price) and closing costs, which are typically 3% to 6% of the loan amount. This can mean a significant chunk of change.
• There are continuing costs you’ll have to account for, such as home insurance, property taxes, general maintenance, and emergency home repairs.
When you are renting, if the kitchen sink springs a leak, your landlord will take care of it. But when you own a home, those repairs will be entirely your responsibility. Having an emergency fund saved up will help you deal with unexpected costs associated with homeownership.
Also, if you are purchasing a house as an investment vs. using it as a primary residence, can you afford to buy a house while still renting? That is a situation in which you will want to map out your cash flow and make sure you are prepared if you can’t flip or rent the property as quickly as anticipated. An emergency fund could also be invaluable in that scenario.
Are You Confident in the Housing Market?
The housing market rises and falls; take a close look to evaluate current trends. Home prices skyrocketed during the Covid pandemic and have continued to rise recently. This can make it difficult for first-time homebuyers to find a suitable home that is in their price range. It’s important to be prepared as you start to look at homes. Understand your budget and make sure you have saved enough money to make a down payment on the property.
Also be sure that you understand how mortgage rates can impact the affordability of housing and what your home shopping budget looks like. 💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.
Are You Ready for the Responsibility?
When you own your own home, you have a lot of freedom to make the space completely your own. With all of this flexibility comes a lot of responsibility. If the house has a yard, you’ll be responsible for regular maintenance and upkeep.
Will you need to pay for a new roof soon? Buy a lawn mower? If you live in an area with harsh winters, will you need to get a snow blower or hire someone to clear the driveway after each snow storm? These costs can add up.
So make sure you are ready for the financial responsibility that comes with owning a home before you make the purchase. You’ll have to account for repairs, improvements, general upkeep, insurance, and taxes. Not only does all of this cost money, it will take your time and attention as well, which isn’t necessarily the case when you rent. If you’re not ready to always be “on call” for your property’s needs, it could be a homebuying mistake to purchase.
Recommended: Should I Sell My House?
Are You Willing to Live with a Long-Term Loan?
Buying a home can mean you’re taking on a loan for perhaps 15 or 30 years. That’s a major undertaking. Part of the process of learning how to buy a house is educating yourself on how mortgages work and the different types available. Generally, there are two types: fixed rate and adjustable-rate mortgages.
• A fixed-rate mortgage keeps your payment level over time, typically 15 or 30 years, because the interest rate remains stable.
• The interest rate on an adjustable-rate mortgage loan fluctuates over time. They usually start out lower than a fixed-rate loan but often rise in later years.
To see what a mortgage could mean for your finances, take a look at an online mortgage calculator to compare different types of loans and see what your costs might look like. If a loan could be part of your life for three decades, you want to make sure you’re comfortable with it.
Remember that while it may seem daunting to take on a 30-year obligation, a mortgage helps you build equity in an asset that generally increases in value as time passes. Is a house a good investment? Historically, yes, if you take the long view.
Over the years, homeowners build up equity in the house as they methodically pay off more and more principal with less monthly payments on each loan payment. Many smart borrowers pay extra each month toward the principal to pay off the mortgage sooner.
Recommended: Quiz: Should You Buy or Rent a Home?
Pros and Cons of Buying a Home as an Investment
Before a major financial move, it’s important to consider the benefits and downsides. You’ll want to know what are the pros and cons of buying a starter home or a subsequent property. Consider these points.
Pros of Buying a House
Here are some of the upsides of buying and owning a home:
• You will build equity in your home over time, which can help you grow your wealth. Your home value may appreciate as well.
• There may be tax advantages to homeownership, such as deducting mortgage interest.
• Paying your mortgage payments on time can help build your credit.
• You can renovate the property as you see fit, unlike the case with rental units.
• You likely have a good idea of your monthly housing costs for the long term. If you are renting, you could face significant fluctuations.
• There’s a feeling of security for many people when they know they own their home.
Cons of Buying a House
Next, it’s wise to consider the disadvantages of buying a home:
• You typically need to pay for the down payment and closing costs, which can be a significant financial hurdle.
• You are likely locking into long-term debt, and it can take a while to build equity.
• There is no guarantee that your home’s value will grow over time.
• The costs related to owning a home can be significant. This includes expenses like property taxes and insurance, as well as home repairs.
• You will have less flexibility if you need to move for a job, say, or want to relocate to be closer to friends and family. Selling a house can involve time, energy, and money.
Ready to Buy? Consider a SoFi Mortgage
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
Is it wise to buy a house as an investment?
Whether it’s wise to buy a house as an investment will depend on many factors, such as your personal finances and current economic and real estate trends, as well as whether the property is a place that’s a good home for you to live in for at least several years.
Is buying a house worth it in 2023?
Buying a house in 2023 can be challenging because home prices and mortgage rates have been rising. However, if you can afford the monthly mortgage payments, plus the down payment and ongoing costs of homeownership, it may still be the right move for you.
Is owning a home an asset?
In general, a home is considered an asset. Yes, you typically have a mortgage, which is a liability, but on the plus side, you are building equity while having a place you enjoy living.
*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 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.
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.
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.
Thinking about becoming a transcriptionist? In this Transcribe Anywhere Review, I’ll go over whether this course is worth it or not. Transcription is a popular work from home job, and there’s a high demand for transcriptionists. Plus, you can make a good income with a home-based business. On average, a general transcriptionist makes about $45,000…
Thinking about becoming a transcriptionist? In this Transcribe Anywhere Review, I’ll go over whether this course is worth it or not.
Transcription is a popular work from home job, and there’s a high demand for transcriptionists.
Plus, you can make a good income with a home-based business. On average, a general transcriptionist makes about $45,000 per year, while legal transcriptionists can earn around $60,000 annually.
You might have heard of Transcribe Anywhere, a popular course for transcription training. It is self-paced training for both general and legal transcription, along with resources to improve your skills and find transcription jobs.
But, is it a worthwhile investment, and is it a worthwhile course to take?
In this Transcribe Anywhere review, I will go in-depth into the details of the course, talk about what’s included, and help you figure out if you should take this course. I’ll also answer some frequently asked questions and talk about six job alternatives related to transcription.
By the end of this article, you’ll have a clearer understanding of whether Transcribe Anywhere is the right choice for your career goals.
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In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.
Recommended reading:
Key Takeaways About Transcribe Anywhere
A transcriptionist turns audio and video files into text documents. They listen to what’s being said and type it up into a text format.
Transcribe Anywhere has in-depth training in general and legal transcription, plus comes with lifetime access.
The courses take around 2 to 6 months to finish – they are self-paced, so you can go as slow or fast as you want.
The courses will help you to improve your transcription skills, find jobs, and start a business.
Transcribe Anywhere Review
What is transcription?
Transcription is the process of converting spoken language into written text. As a transcriptionist, your job is to listen to audio or video recordings and accurately type the spoken words into text format. This freelance job requires good listening skills to accurately transcribe what is being said.
To be successful as a transcriptionist, you will need to be good at spelling, grammar, punctuation, and maintaining focus over time.
There are many types of transcription jobs available, like general, medical, or legal transcription. As a freelance transcriptionist, you can handle different types of projects and serve various clients.
For transcription, you’ll need a computer with word processing software (like Microsoft Word), quality headphones, a foot pedal for playback, and a comfortable chair for long hours at your desk.
You might be curious, can’t a computer automatically transcribe? Well, computers often make many mistakes when transcribing, so having a human do it is more accurate and dependable.
What is Transcribe Anywhere?
Transcribe Anywhere is an online transcription course created by Janet Shaughnessy. This course helps people learn how to transcribe and work from home. They have two main courses: a general transcription course and a legal transcription course. Both courses are very thorough and easy to follow, making them great for beginners.
You’ll get access to many learning resources, such as audio and video files, practice dictations, and quizzes. This makes sure that you understand what it takes to become a successful transcriptionist.
Transcribe Anywhere has a free training workshop so you can learn the basics and decide if transcription is the right career for you.
What’s in Transcribe Anywhere?
Below, I will be talking about what is in Transcribe Anywhere.
Transcribe Anywhere courses
Transcribe Anywhere has two main courses: General Transcription: Theory & Practice and Legal Transcription: Theory & Practice.
These courses have many modules which teach a wide range of topics related to transcription and include videos, tutorials, and practical lessons.
In a section below, I will be talking more about the lessons in each course.
How much does Transcribe Anywhere cost?
If you’re considering investing in the Transcribe Anywhere courses, you’re probably wondering about the price.
Here’s a breakdown:
General Transcription course – $497
Legal Transcription course – $597
General & Legal Transcription Bundle (Both Courses) – $797
Both Courses + Website & Support + Live Access to the Transcribe Anywhere Team – $2,997 (This is more expensive because it includes both courses, transcription equipment (software, headset, and foot pedal), plus a done-for-you professionally designed website).
There are also payment plans where you can split the cost into 4 payments.
Transcribe Anywhere also can be sampled through a free training: FREE Workshop: Is a Career in Transcription Right for You?
Community and support
Transcribe Anywhere comes with a helpful support group where students can engage in discussions and seek advice. You can connect with others who share your interests, providing valuable insights from individuals at different points in their transcription journey. This community serves as a valuable source of motivation, guidance, and career tips.
This community used to be in a Facebook group, but it was recently moved to a new forum dedicated to Transcribe Anywhere.
How to sign up for Transcribe Anywhere
To purchase Transcribe Anywhere, visit their website and choose the course that best suits what you’re looking for. Whether you’re thinking about General Transcription or Legal Transcription, both courses have a thorough curriculum that will help you find transcription jobs.
Here are the links for the two courses:
So, what is the difference between legal transcription and general transcription?
General transcription involves converting audio and video content into written form, and it is used across various industries like academia, marketing, interviews, and films. On the other hand, legal transcription requires the same skills as general transcription, but it also demands expertise in legal terminology and documentation.
Below is more information about each course:
General Transcription course
The General Transcription course is a training course in transcription to give students a versatile skill set for many different industries. The curriculum covers everything from basic transcription knowledge to perfecting skills for accurate transcriptions.
What’s included in this course?
Learn everything you need to know about transcription
How-to’s of transcription and software video tutorials
Video tutorials, worksheets, printable PDF cheat sheets
Tips, tricks, and step-by-step how-to from a 30+ year transcription veteran instructor
How to build and market your transcription business
Final exam and certificate
Inclusion in the Official Graduate Directory (upon passing the final exam)
Lifetime access to the entire course and student community
Here is what is in each module:
Module 1 – Laying the Foundation
The first module of the general transcription course teaches you the basics of becoming a transcriptionist. The lessons included are:
The Right Equipment You Need For the Job
Tools of the Trade
Standard vs. Strict Verbatim
Types of GT Jobs
Formatting a Transcript
Cyber Security
Module 2 – Essential Skills for Excellent Transcription
This module teaches you the correct usage of punctuation, spelling, and more so that you can provide high-quality and accurate transcriptions. The lessons included are:
Parts of Speech
Sentences, Fragments, and Run-ons
Phrases
Clauses
Punctuation Makes Perfect
Punctuation Practice
Spelling: The Lost Art
Transcribing Numbers
Miscellaneous Transcription Conventions
Module 3 – Time-saving Tools for Efficient Transcription
This module teaches you different ways to work faster so that you can make more money. The lessons included are:
Using Text Expanders and Shortcut Keys
Shortcut Keys for the Top 102 Most Frequently Used English Phrases
Spell Check, Search & Replace, Modern Usage Notes
Commonly Used Transcriptionist’s Notes
Using Transcription Templates (includes downloadable templates)
How to Download Practice Transcription Files (video tutorial)
Time Coding
Midterm Exam
Module 4 – Introduction to Practice Dictations
Module 4 is all about practicing your transcription skills. There are several practice lessons along with an answer key so that you can check your work.
Level 1 Practice Dictations: Clear audio in simple, short videos
Level 2 Practice Dictations: Audio-only Files; Non-American English accents
Level 3 Practice Dictations: Transcribing “Strict Verbatim” Style
Level 4 Practice Dictations: Transcribing Multiple Speakers
Level 5 Practice Dictations: Semi-Poor Audio Quality & Research Skills
Level 6 Practice Dictations: Working with Time Codes
Level 7 Practice Dictations: Transcribing Poor Audio with Foreign Accents
Module 5 – Final Exam and Certification of Completion
This is the module where you take the final exam, and it is graded by a human on the Transcribe Anywhere team. You are given feedback as well so that you know what you can improve on. If you pass the exam (you can take it as many times as needed), you are given a Certificate of Completion.
Module 6 – Building Your Business
This module teaches you how to build your transcription business and goes over topics such as:
Income Guidelines and Setting Your Rates
How to Handle Finances and Taxes When Working as a Freelance Transcriptionist
Developing a Business Plan
Marketing and Advertising
Customer Service Essentials
Connecting with Clients
Where to Find Contract Work
Top Business Directories for Local Marketing
How to Find Clients on YouTube
Opportunities for Expanding Your Services
Please click here to learn more about General Transcription: Theory and Practice.
Legal Transcription course
The Legal Transcription course, on the other hand, is tailored for those wanting a specialization. This course dives deep into legal transcription, giving an in-depth understanding of legal terminologies, formats, procedures, etc. Like the General course, this one too is comprehensive; however, it is focused primarily on the legal sector.
Legal transcriptionists are in demand by a range of professionals and organizations, including attorneys, court reporters, academics, insurance companies, and research institutions, among others.
What’s included in this course?
14 full-length training modules
Legal transcription style guide plus downloadable templates of legal forms and documents
Learn the latest advancements in the world of legal transcription
Video tutorials, worksheets, printable PDF cheat sheets
Tips, tricks, and step-by-step how-to from a 30+ year transcription veteran instructor
Marketing how-to/tutorials
Final exam and certificate
Inclusion in the Official Graduate Directory (upon passing the final exam)
Lifetime access to the entire course and student community
BONUS – Transcriptionist Pro Website Theme
Here is what is in each module:
Module 1 – Introduction to Legal Transcription– This module goes over what legal transcription is and goes over the basics.
Module 2 – Tools of the Trade – In this module, software and other tools are discussed. You will learn what equipment you need and where to get it.
Module 3 – Lawyers Litigate; Transcriptionists Punctuate– This module goes over parts of speech, sentences, phrases, punctuation, legal terminology, spelling, and so much more.
Module 4 – Microsoft Word for Legal Transcriptionists – This module teaches students how to notate transcripts, how to use shortcuts to increase typing speed, and more.
Module 5 – Basic Legal Correspondence & Practice Dictation– This module teaches students how to transcribe common documents from lawyers and other legal professionals, such as memos, client consultations, examinations, property deeds, and more.
Module 6 – The Legal Process and Court Procedure– This module helps students better understand the legal process, such as descriptions of types of law, steps in a civil or criminal case, and the anatomy of a court transcript.
Module 7 – Forms and Templates – This module helps students better understand different legal documents that are used in judicial proceedings.
Module 8 – Practice Transcription of Court Proceedings – In this module, students can practice transcribing court proceedings.
Module 9 – Depositions – This module helps students better understand the deposition process. There are also practice audio files that students can work on.
Module 10 – Law Enforcement – Students can practice law enforcement transcripts in this module.
Module 11 – Conferences and Legal Association Meetings – This module is all about how to transcribe legal meetings and conferences.
Module 12 – Time Coding for Legal Transcriptionists – This module teaches students how to transcribe documents that include time stamps.
Module 13 – Resources and Final Exam – This module links to helpful tools and resources such as writing and style guides, legal resources, dictionaries, and more. The final exam is also located in this module.
Please click here to learn more about Legal Transcription: Theory and Practice.
Is Transcribe Anywhere legitimate?
Transcribe Anywhere success stories
Transcribe Anywhere has helped many students start their transcription careers. Many students of Transcribe Anywhere have built successful transcription businesses after completing the course.
Here are some Transcribe Anywhere testimonials:
“I purchased this general transcription training course recently to help me get started in a new career and I couldn’t be happier with my decision. This is an extremely comprehensive course. There’s NOTHING out there like this (believe me, I looked) and it has ALL you need to get started! I highly recommend this course!” – Laura P.
“I took kind of a backward journey to Janet’s course! I started work doing legal transcription several months ago. I took the Transcribe Anywhere course “Legal Transcription: Theory and Practice” as a way to increase my skill set. The course was great! I discovered what I didn’t know, which not only helps me with my current work but also with obtaining my CET certification, which I want to do in the next few months. If anyone is wondering about legal transcription work in general, I can tell you I love it. The work is so interesting to me, and the ability to work from home is wonderful. I have a fairly active family, and I love being able to switch my hours around and work early, late, or weekends if I need to.” – Krista K.
“My husband was recently transferred to another state for work and I cannot join him until my son graduates from high school. This created a financial burden for us as we were going to have a house payment and a rent payment in another state. I needed to generate some income for us quickly but I didn’t want to work outside the home. I began the legal transcription course in April. There were definitely times when I thought I wouldn’t be able to complete the course because it is not easy. However, I knew I needed to do this for my family and I persevered, passing my final exam at the end of July. I began searching for work soon after, and within two weeks was hired on doing government work. Staying the course and completing what I started has allowed me to generate an additional $1600 per month for my family. If you are looking for a reputable course, this is it! Without this course, I would never have been able to work from home and generate this kind of income.” – Tracy R.
You can read more Transcribe Anywhere testimonials here.
Transcribe Anywhere review BBB
Transcribe Anywhere has a positive reputation on BBB with an A+ rating.
Pros and Cons of Transcribe Anywhere
A Transcribe Anywhere review wouldn’t be complete without talking about the pros and cons of Transcribe Anywhere.
Pros:
Well-rounded course material – The courses teach you everything you need to know about starting a transcription business, all from the very beginning.
Focused on building a career – The courses at Transcribe Anywhere are not just about learning transcription. They also help students set up a successful transcription business.
Flexibility – The self-paced nature of the courses at Transcribe Anywhere lets you learn at your own pace. This can be a benefit for those balancing work, family, or other commitments while pursuing the course.
Cons:
Cost – The courses at Transcribe Anywhere are several hundred dollars, which may be a barrier for some people to begin them.
Time commitment – Since Transcribe Anywhere courses teach you everything that you need to know, they do take a decent amount of time to finish at 2 to 6 months.
As you can see, the advantages of Transcribe Anywhere outweigh any potential downsides. The helpful course lessons make it worth the time and cost for many people.
Frequently Asked Questions About Transcribe Anywhere
Below are answers to common questions about Transcribe Anywhere and their courses.
Is Transcribe Anywhere worth it?
Should you take a course to learn transcription if you’re just starting out?
Enrolling in a transcription course can be a good idea for many. This course teaches skills like fast and accurate typing, and how to use transcription software. They can also help you find jobs and kickstart your career.
However, if you’re a quick learner with strong grammar and typing skills, you might find beginner transcription work without needing a course. There are also free resources online, like tutorials and practice tests, to help you get started.
Yet, for specialized and higher-paying transcription jobs, like legal or medical transcription, a course is often necessary.
As long as you’re willing to put in the hard work to master the skill, the courses seem to be worth it.
Who is Transcribe Anywhere for?
Transcribe Anywhere is designed for people looking for a career in transcription or anyone looking to improve their transcription skills. Whether you’re a beginner or an experienced transcriptionist looking to improve your skills, Transcribe Anywhere has helpful training.
How long does Transcribe Anywhere take?
Both the general and legal transcription courses take around 2 to 4 months to finish. The two courses are self-paced, which means you can take as much (or as little!) time as you need to complete them.
Who is Janet Shaughnessy?
Janet Shaughnessy is the founder of Transcribe Anywhere and an experienced transcriptionist. She also runs her own transcription business called Zoom Transcription Services. She created Transcribe Anywhere to teach others the skills needed to become successful transcriptionists and find clients.
How much can a beginner transcriptionist make?
Beginner transcribers’ earnings depend on factors like the company you work for and how fast you can type. Typically, transcriptionists make between $15 to $30 per hour. It’s worth knowing that transcription jobs often pay based on the duration of the audio you’re transcribing. This means that if you have excellent listening and typing skills, you’re likely to complete assignments more quickly, allowing you to make more money. While transcription work won’t make you wealthy, it offers a legitimate way to earn money from home with the flexibility to structure your workweeks.
This is an online typing job that depends a lot on how fast you can type – the faster you can type, the more money you can most likely make.
Recommended: 20+ Best Jobs That Pay $20 An Hour Or More
Is there a free trial or sample course available for Transcribe Anywhere?
Transcribe Anywhere has free training: FREE Workshop: Is a Career in Transcription Right for You?
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In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.
Is Transcribe Anywhere accredited?
General and legal transcription programs do not have national accreditation. But, Transcribe Anywhere is recognized as an approved school by the American Association of Electronic Reporters and Transcribers (AAERT).
How does Transcribe Anywhere compare to other transcription courses?
Transcribe Anywhere has received a lot of positive reviews for its very helpful courses and is often said to be the best transcription course out there.
Jobs similar to transcription
In this section, we’ll look at some jobs similar to transcription.
Blogger
Bloggers write content on different topics, such as finance, travel, lifestyle, food, and more. There is a lot of typing involved as a blogger, which is what makes it a little similar to transcribing.
I have been blogging for over 10 years, and it’s my favorite way to work from home. Highly recommend it!
If you are interested in becoming a blogger, I recommend signing up for the How To Start A Blog FREE Course. In this free course, I show you how to create a blog, from the technical side to earning your first income and attracting readers.
Recommended reading: How To Monetize A Blog: How I Grew A $5 Million Blog
Proofreader
If you’re skilled at spotting grammar and punctuation mistakes, proofreading could be an ideal job for you. As a proofreader, your role is to review written material, making sure that it’s free from any grammatical, spelling, or punctuation errors.
If you are interested in finding online proofreading jobs, I recommend signing up for this free 76-minute workshop all about how to start a freelance proofreading business. You can sign up for free here.
Recommended reading: 20 Best Online Proofreading Jobs For Beginners (Earn $40,000+ A Year)
Virtual assistant
A virtual assistant (VA) provides administrative, technical, or creative support to clients from a remote location (such as their home office). VAs may handle emails, schedule appointments, or manage social media accounts.
If you are interested in finding part-time virtual assistant jobs or even full-time ones, I recommend signing up for the free workshop 5 Steps To Become a Virtual Assistant. Here, you will learn how to become a virtual assistant, even if you have no experience.
Recommended reading: Best Ways To Find Virtual Assistant Jobs
Translator
If you are fluent in two or more languages, working as a translator might be a great fit for you. As a translator, you’ll be converting written text from one language to another while preserving the meaning and context.
Freelance writer
Freelance writers write articles, blog posts, ebooks, or even social media content for clients.
Recommended reading: 14 Places To Find Freelance Writing Jobs – (Start With No Experience!)
Bookkeeping
Bookkeepers are responsible for helping businesses take care of their finances, such as by tracking receipts and spending.
If you are interested in finding online bookkeeping jobs, I recommend signing up for this free workshop all about finding a virtual bookkeeping job. Here, you will learn how to start a freelance bookkeeping business. You can sign up for free here.
Recommended reading: Online Bookkeeping Jobs: Learn How To Get Started Today
Transcribe Anywhere Review – Summary
I hope you enjoyed this Transcribe Anywhere review.
If you want to become a transcriptionist, then the two courses sold by Transcribe Anywhere are a great place to start your new career.
Transcribe Anywhere’s courses help you turn your transcription skills into a career. They teach not only transcription but also how to find good-paying clients and run your business successfully.
These courses benefit anyone seeking a flexible remote job. Whether you’re a mom wanting to work while your kids are at school, a retiree wanting to boost your income, or a digital nomad looking for a reliable source of income on the move, Transcribe Anywhere can help you reach your goal.
A great free resource is FREE Workshop: Is a Career in Transcription Right for You? You’ll learn what transcription is and why it’s a highly in-demand skill, who hires transcriptionists, what it takes to become one, and more.
Do you want to become a transcriptionist? Do you have other questions for this Transcribe Anywhere Review?
When students take a gap year, they typically take a semester or year off between high school and college in order to take advantage of experiential learning. While extraordinary opportunities may be awaiting you, you may struggle to think of ways to pay for the experience.
If that’s the case, there are options that may help you pay for your gap year — beyond funding the costs out of pocket. Continue reading for more information on options you may want to consider should you find yourself in need of help funding your non-classroom experience.
Gap Year, Explained
First of all, what is a gap year and why do people take them?
Students may choose to take a semester or year off with the goal of getting a break from academics and prior to diving into postsecondary education. Students may choose to complete an internship, travel, study on their own, volunteer, or pursue other interests. Some students choose to pursue a gap year with the intention of discovering what it is that they want to major in or the career path they’d like to pursue.
Many students report a developed self- and cultural awareness, increased independence, and confidence after taking a gap year.
Students may choose to apply to colleges and universities during their senior year (and let colleges know of their plans to take a gap year), during their gap year or after they’ve completed their gap year. Waiting until later often gives them the advantage of being able to report on what they’ve learned during their time away from academics.
In some instances, a gap year may also be something for a student to do after college or in-between college and post-graduate study.
Planning Out Your Gap Year
It’s important to plan out your gap year ahead of time so you have a plan for how you’ll spend your time. It can be easy to waste time when you break from a traditional schedule. Having a plan ensures that you’ll have a better chance of achieving your goals — you might even curb expenses as well.
It may be helpful to break your plan down into measurable goals. For example, if you plan to travel, write down where you’d like to be on specific dates so you don’t miss any of your intended milestones. It’s also a good idea to budget for your gap year ahead of time so you know how much it will cost and the amount you’ll need per week or month to live on.
Options for Financing Your Gap Year
You can always finance your gap year with cash you or your parents have saved or with money from a well-meaning grandparent. However, not everyone has cash bankrolling their gap year. Let’s take a look at a few ways you may want to consider financing your gap year.
Gap Year Scholarship or Grant
A private entity may offer you a gap year grant or scholarship. A scholarship is free money that you don’t have to pay back that can come from a wide variety of entities, including clubs, organizations, foundations, charities, businesses, the government and individuals. It’s possible to find scholarships specifically for gap years, particularly for students who want to volunteer, improve certain skills, volunteer, develop a talent, or complete another type of experiential learning.
Grants are also a form of financial aid that doesn’t have to be repaid. Grants may also help you fund your gap year without having to repay the money. However, it’s important to check into the fine print on both college grants and scholarships to ensure that you fit the criteria. (Some scholarships and grants require you to get college credit in order to qualify.)
529 Account or College Savings
If you or your parents have college savings set aside in a brokerage account, savings or checking account, or a certificate of deposit (CD), you may want to use this money to pay for gap year expenses.
A 529 plan is an investment account that offers investment opportunities and tax advantages when used to pay for qualified education expenses. You may take withdrawals from a 529 plan to pay for qualified educational expenses for tuition, room, board, fees, books, equipment for classes, and other supplies at an accredited institution. If you meet these requirements, you won’t pay federal income tax.
However, if you spend the money on an expense that doesn’t qualify as a higher education cost (such as your plane ticket to go overseas). Be careful when using your 529 savings unless you’re attending a specific program through an accredited institution.
Find a Paid Internship or Part-Time Job
Obtaining a paid internship or part-time job can help you float some or all of the expenses of a gap year. For example, if you plan to spend your year volunteering at soup kitchens throughout a major city, a part-time job may help you pay for transportation to get there and also other living expenses. On the other hand, if you intend to use your gap year to gain work experience to discover your career goals, a paid internship may help you take care of all of your living expenses.
Recommended: Jobs to Help Pay for School Expenses
Apply for Financial Aid
Financial aid can refer to a wide range of types of money to pay for credits at college or career school.
Some gap year programs offer college credit, so you may be able to apply for federal financial aid using the Free Application for Federal Student Aid (FAFSA®). The FAFSA can give you access to grants, federal student loans, and other opportunities.
While you may have never had any intention of taking college credit during a gap year (you may feel that it defeats the purpose of a gap year!) but taking a college-credit class or two as part of your experience or doing a credit-based gap year program may help cover some of your costs.
Personal Loans
Taking out a personal loan involves borrowing money from a bank, online lender, or credit union that you repay in fixed installments. Personal loans are not backed by collateral, which also means they are called unsecured loans. (Secured loans, on the other hand, are backed by collateral, such as a house.) Personal loans often carry higher interest rates than some other types of loans. It may be difficult for someone to get a personal loan without a cosigner if they don’t have a long history of building credit.
It’s a good idea to be careful about taking out a personal loan due to these higher interest rates and having to bring a cosigner on board. That cosigner could end up paying for your loan if you default on the loan and ultimately, it could affect both of your credit scores.
Using Private Student Loans to Finance Gap Year
Private student loans are student loans that come from a bank, credit union, or other private lender. You probably cannot use private student loans to finance your time off from school if you plan to backpack across Europe, but if you do take a few classes as part of a gap year program, you may be able to use private loans to cover your costs. Check with lenders about their requirements before you apply and whether or not a particular program will qualify.
The Takeaway
A gap year can help “gappers” explore career goals, develop confidence, volunteer, and more. If you’re thinking carefully about a gap year, you also might be worried about the cost of taking that time off. Consider putting together a list of costs, goals, and plans so you can make sure that your gap year goes off without a hitch. From there, you can start planning how you’ll cover your expenses during your time away from the classroom.
Finally, don’t forget that you can always put together a combination of sources of funding. For example, you can pay for your gap year with a combination of scholarships, money saved, and internship money.
3 Student Loan Tips
Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.
Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.
It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.
SoFi private student loans offer competitive interest rates for qualifying borrowers, flexible repayment plans, and no fees.
FAQ
How much should I budget for a gap year?
The amount you should budget for a gap year depends on your personal circumstances. It also depends on what you plan to do. Living at home with your parents and volunteering in your community will likely cost less than hopping on a plane and spending a year abroad. No matter what your plan, it’s best to get an estimate of your expenses ahead of time and then use that as a basis for your budget throughout your gap year.
How can I get funding for a gap year?
There are many ways to get funding for a gap year. Depending on your situation and circumstances, you may consider tapping into scholarships, grants, a 529 account, college savings, through a paid internship or part-time job, financial aid, personal loans or private student loans. There’s no single way to fund your gap year, and you may also want to consider a combination of different sources to pay for it.
How long should a gap year be?
A gap year can be any length of time, but they typically last between two weeks and one year.
Photo credit: iStock/Pekic
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The average American net worth varies due to many factors, with some people making far more than others. If you’re behind the national average, it may seem difficult to catch up, but whether you have bad credit or a lot of debt, you can still begin building your net worth by learning how to generate passive income.
Passive income is a great way to generate more income, pay down your debt, and start saving and investing for your future. Here you’ll learn what passive income is, as well as different ways to make passive income online and offline. With 25 passive income ideas, there is something for everyone.
25 Passive Income Ideas:
Write an E-Book
Start a YouTube Channel
Try Affiliate Marketing
Create a Blog
Sell Stock Photos and Videos
Create an Online Course
Make Sponsored Content
Invest in Dividend Stocks
Invest in REITs
Invest in Index Funds and ETFs
Try Peer-to-Peer Lending
Stake Cryptocurrency
Utilize High-Yield Savings Accounts
Buy Government Bonds
Invest in Art
Buy Property to Rent
Rent Out a Room in Your Home
Buy Domain Names
License Your Music
Design Custom Products
Rent Out Your Vehicle
Use Your Vehicle as Ad Space
Create an App
Flip Unique Items
Rent Out Your Parking Space
What Is Passive Income?
Passive income is a type of income that comes from sources other than your regular employment, and involves a more hands-off approach. Passive income isn’t a “get rich quick” scheme, though some companies make big claims about generating passive income without any work. Passive income does take work to set up, but the goal is that you can make money without managing it on a day-to-day basis.
You’ll generally do most of the work by setting up your source of passive income. While it may require some upkeep every now and then, like updating a product or maintaining a rental property, you’ll earn the majority of your income while pursuing other endeavors.
Like other sources of additional income, passive income is taxable, but when done correctly, you can make enough passive income to surpass your tax bill.
1. Write an E-Book
Whether you’re a writer or not, an e-book can be a fantastic way to generate passive income. We no longer live in a world where publishers are the gatekeepers of books, so you can self-publish a book that can generate passive income. Various websites let you self-publish books, like Amazon’s Kindle Direct Publishing, Apple Books, and Barnes & Noble. Some of these sites also offer print-on-demand services for customers who want physical copies.
You can write a nonfiction book if you’re knowledgeable about a certain subject, or you can write fiction if you have an interesting story idea. Although this can generate passive income, self-publishing can require a bit of an investment. You’ll need to pay for an editor and book cover designer, and you may also want to pay for advertisements. But if you can do the cover art and marketing on your own, you may be able to save some money.
2. Start a YouTube Channel
There are many ways to make money using social media, but YouTube is one of the best ways to make passive income. YouTube pays content creators to run ads on their videos. In order to qualify for the YouTube Partner Program, you’ll need at least 500 subscribers, three new videos within the last 90 days, and 3,000 watch hours within the last year. Previously, you needed 1,000 subscribers and 4,000 watch hours, but the policy was updated in June 2023 with lower requirements.
Like other sources of passive income, making money from YouTube will require an up-front investment of time and money. You need a stable internet connection, camera, microphone, computer, and editing software. You also need to make consistent videos to qualify for the partner program. You can eventually generate passive income by making evergreen videos, because people will watch old videos that bring in revenue—and the more videos you have on your channel, the more money you can make.
3. Try Affiliate Marketing
Affiliate marketing is when you share a link to a product or service, and the company gives you a percentage of any sales made through that link. You can share these links on your social media pages, blog, newsletter, or anywhere else that allows you to post a link. Affiliate marketing is one of the best online passive income opportunities, and you can combine it with any other online method we mention in this article.
One of the most popular affiliate link programs is Amazon Associates. Let’s say you have a YouTube channel where you review electronics, and you make a video reviewing a new TV or laptop. If you link to that product on Amazon with your affiliate link, you’ll receive a percentage of the sale each time someone uses your link.
This isn’t only limited to Amazon, either. Many companies offer affiliate links, so it can be advantageous to reach out to companies for products and services you use regularly to see if they have an affiliate program.
4. Create a Blog
There are a variety of ways to make money from writing a blog. Like YouTube, old blog posts can generate passive income even if people read the post months or years after you wrote it. If you create your own website to host your blog, you can integrate Google Ads and use affiliate links to make money online.
Platforms like Substack combine blogs and newsletters, so every time you write a new post, subscribers receive an email. You can have paid subscriptions on Substack, so users pay a monthly fee to read your posts, and you can have free posts that go out to non-paying subscribers as well.
5. Sell Stock Photos and Videos
If you’re a photographer or videographer, you can earn money for your photos and videos. There are many different websites that buy stock photos and videos, like Shutterstock, iStock, and Getty Images. One thing to consider is that the website gets exclusive rights to your images or videos, but on some sites you can make between 15% and 45% in royalties.
6. Create an Online Course
Many people have expertise in a certain area, and utilizing your knowledge and skills to create an online course is a great way to make passive income online. For example, you can create a course for how to knit, how to take amazing photos, or how to program an app. Websites like Kajabi and Teachable allow you to host and sell your courses.
You may need to invest some time and possibly money in marketing your course to ensure you find the right audience. Some course-hosting platforms like Skillshare also categorize courses by topic for better discoverability.
If you start gaining a following on social media platforms or through a blog, you may get the opportunity to do sponsored content. Companies want to ensure they target the right audience, so if you have followers who may buy their product or service, they’re more likely to sponsor a piece of content. This typically means you discuss their product in a video or write about it in a caption.
In order to generate passive income from a sponsored opportunity, the company will give you an affiliate link. This allows you to make money up front for the sponsored content as well as passive income from anyone who uses your link to buy the product or service.
This route for passive income may take some time because companies typically want people to have a decent following before sponsoring content.
8. Invest in Dividend Stocks
Stocks can be a great way to make money while also investing in your future. When you buy a stock, you buy a small portion of a company. If the stock price rises and you sell it at a higher price, you make a profit, but the stock can also drop in price and lose you money. Some, but not all, stocks offer dividends, which pay investors a dividend per share if the company has a profitable quarter.
When the stock pays out dividends, you can receive the payment directly from your brokerage or reinvest the dividends by buying more of the stock. Like other investments, this can compound and turn into a lot of money over time if the company continues to profit. As you invest in dividend stocks, keep in mind the companies can raise or lower the dividend percentage at any time.
Use MarketBeat’s dividend calculator to look up specific stocks and estimate dividend returns.
9. Invest in REITs
Real estate investment trusts (REITs) are another investment opportunity. Rather than investing directly in a property, you can invest in a REIT, which is a company that owns and manages real estate.
Similar to other investments, there is risk that comes along with investing in REITs. For example, there’s a possibility your REIT investments will lose money if there’s a drop in the housing market.
10. Invest in Index Funds and ETFs
Index funds and exchange-traded funds (ETFs) are some of the safest investments because they offer diversification. Rather than investing in one company, index funds and ETFs allow you to invest in multiple companies simultaneously.
Legendary investor and founder of Vanguard John Bogle was a major advocate for index fund investing. More specifically, he advised people to invest in the S&P 500, an index of the 500 largest companies in the United States. ETFs are slightly different because there are higher fees, but they allow you to invest in a group of stocks for a specific industry. For example, ARKK is an ETF that holds shares for companies that work on innovative technology.
There is still a risk when investing in index funds and ETFs, but they are often lower risk than other forms of stock investing.
11. Try Peer-to-Peer Lending
Another way to make passive income is to become your own type of “bank” by doing peer-to-peer lending, sometimes called P2P lending. Banks make money on loans by charging interest to customers, and P2P lending allows you to do the same thing. Websites like Prosper and Funding Circle allow everyday people to lend and borrow money with various interest rates.
12. Stake Cryptocurrency
Cryptocurrency investing is a highly volatile form of investing, making it especially high risk. Some cryptocurrency platforms allow you to “stake” your crypto, which is when you allow the platform to hold your crypto and lend it to other people. Similar to P2P lending, you make money off the interest.
Cryptocurrency lending and trading is also high risk because there is little to no regulation. Crypto platforms like Voyager have been known to offer extremely high returns and then go bankrupt, preventing them from paying back their users. In extreme cases, there are stories of fraudulent activity from crypto platforms. But if you have a high risk tolerance, this form of investing can be incredibly lucrative.
13. Utilize High-Yield Savings Accounts
A safer way to make passive income is to open up a high-yield savings account, which allows you to make money simply by holding it in your account. Banks use customer funds to lend out money, but unlike crypto staking, bank funds are backed by the U.S. government via the FDIC. This means that if, for some reason the bank doesn’t have the money when you want your funds, the government would provide the bank with the money to pay you up to $250,000.
Many banks and financial institutions offer high-yield savings accounts, with some offering an annual percentage yield (APY) of over 4%. So if you opened an account with a 4.5% APY and deposited $1,000, you would have $1,045 after a year.
People maximize their passive income by not touching this money because it compounds each year. So using that same example, in the second year, you would then earn 4.5% of the $1,045 rather than the original $1,000. And if you add to the savings account each month, you can make quite a bit of money over time.
14. Buy Government Bonds
Perhaps the safest way to earn passive income from investing is to buy government bonds. A government bond is basically a loan to the federal government that pays you back the original amount with interest over a certain period. The reason government bonds are so safe is because the government backs them. When buying a stock, it’s possible to lose your money if the company goes out of business. Bonds are safer because as long as the government exists, you’ll make your money back.
Although government bonds are very low risk, they also offer low returns. Depending on various factors, government bonds may offer a 3–5% return over two to 30 years. To put that into perspective, S&P 500 index fund investing offers an average return rate of over 7.5%[1] .
15. Invest in Art
Similar to stocks, you can also invest in artwork. One way to do this is to buy works of art that you believe will increase in value later. If you’re knowledgeable about art and can find pieces selling for below their value that you can sell later for a profit, you can make a bit of money. Websites like Masterworks allow you to buy shares of artwork with other investors so you take on less risk.
16. Buy Property to Rent
Many people generate passive income by purchasing properties to rent. If you can afford the initial investment of buying a single-family home or condo, you can then rent them out to tenants for a profit. For example, if you buy a house and your mortgage is only $1,000, you can make a profit by charging any amount over your mortgage cost.
In order to take advantage of the passive income aspect of renting, you may benefit from hiring an individual or company to manage the property. Property managers collect the monthly rent and take care of maintenance issues for a fee. Should you decide to invest in rental properties, it’s helpful to factor in the cost of potential home repairs before, during, and after tenants live there.
17. Rent Out a Room in Your Home
If you don’t have the money for a down payment or don’t want to take on the risk of purchasing a rental home, you can always make some extra income by renting out a room. If you have a spare room in your home, you can rent it out for a monthly fee. This is a great option for families whose children recently moved out.
You can use websites like Airbnb and VRBO to connect you with renters. Although many people use Airbnb for short-term rentals during vacations, you can also offer long-term rentals through the website. These sites also let you vet renters before they move in, so you have control over who rents the room.
18. Buy Domain Names
Buying domain names is a sort of investing, so it does come with some risk. People and businesses buy domain names to host their websites, so you can purchase a variety of inexpensive domain names in hopes of people buying them from you later for more. You can typically buy domain names for less than $10 through websites like GoDaddy, but if they don’t sell, you’ll need to pay the annual cost to keep the name.
While this may be a risky investment, people have made a lot of money flipping domain names. It was a big money-maker during the “dot com boom” in the 1990s, Help.com sold for $3 million and NFTs.com sold for $15 million in 2023. Many domains don’t sell for millions, but you may still be able to make a decent profit off domain names in high demand.
19. License Your Music
If you’re a musician, you can license your music in a similar way to selling stock photos and videos. Some websites like Music Vine pay musicians 30% for nonexclusive deals or more for an exclusive license. There are also websites like Epidemic Sound that market to YouTubers and filmmakers by offering a subscription service for royalty-free music.
20. Design Custom Products
For those who are artistically inclined, you can make money creating designs and selling them on websites that sell custom products. Websites like Redbubble, Teespring, and Society6 offer print-on-demand services for your artwork. These websites sell a wide range of products like T-shirts, coffee mugs, phone cases, and more. You get a percentage of the sale every time a customer goes to the website and chooses your design for any of these products
If you have old artwork you created in the past or simply feel like creating in your spare time, you can generate passive income as long as your art is hosted on these types of websites.
21. Rent Out Your Vehicle
Services like Uber and Lyft are popular side hustles, but you can make passive income by renting out your vehicle instead. When people are traveling or have their car in the repair shop, they often need a vehicle to get around. Rather than going to a rental car company, they can rent a vehicle through other websites like Turo or Getaround.
22. Use Your Vehicle as Ad Space
In addition to renting out your vehicle, you can make passive income by using your vehicle as ad space.
Websites like Wrapify connect businesses and drivers, and depending on how much of your car you’re willing to cover with ads, Wrapify will pay you between $181 and $452 per month. There are also sites like FreeCarMedia.com that pay you for wrapping your vehicle or simply advertising on your rear window.
23. Create an App
If you’re a programmer who can create an app, this may be the best way for you to make passive income. Whether it’s a fun game or an app that provides value and convenience, use your creativity and skills to generate income. Apple and Google allow developers to submit their apps, giving you a percentage of the sale each time someone buys the app.
24. Flip Unique Items
One of the oldest ways to generate passive income is to buy unique items, hold them, and sell them at a later date for a profit. If you’re knowledgeable about a certain type of item or are willing to learn, you can make a decent amount of money by buying and holding items.
This is ideal for people who like shopping at thrift stores or going to garage sales. You may find antique toys, memorabilia, sports trading cards, comic books, or other items for a low price that are either worth a lot of money now or will be in the future.
To sell the items or see how much items are selling for, you can use websites like eBay, OfferUp, Craigslist, or Facebook Marketplace.
25. Rent Out Your Parking Space
Some people are willing to pay for a good parking spot. If you have a space you’re not using or don’t mind giving up, you can make money renting it out—especially if you live in an urban area. Websites like SpotHero allow you to list your space.
What’s the Best Source of Passive Income?
The best source of passive income is unique to each individual. There are many options on this list, and some allow you to capitalize on different skill sets. For example, if you have expertise in certain subjects, the best sources of passive income may be online courses and e-books. If you have knowledge about stocks or are willing to learn, investing may be the best option.
When deciding which passive income sources are right for you, it may be beneficial to weigh out the pros, cons, and risks of each one. Remember that many of these options require an initial investment of money and time to get started. Consider your own risk tolerance and financial situation before going all in on any of these methods.
Do You Need Money to Make Passive Income?
While you’ll need money to get started with many passive income ideas, this isn’t the case for every method. For example, if you own a vehicle or have an extra room in your home, you can start renting them out. If you have a computer and internet connection, you have even more options.
Many people who make passive income succeed because they are willing to learn and can invest time into researching these topics. There’s a wealth of information online where you can learn how to excel at specific passive income opportunities like writing an e-book, succeeding as a YouTuber, or using affiliate links.
The Benefits of Multiple Streams of Income
Depending on your specific situation, you may want more than one source of passive income. Whether you’re already in a healthy financial situation or are trying to build your personal wealth and credit score, more income streams means more financial freedom.
The primary benefit of passive income is that you can make money with minimal effort. This means once you get one source of passive income rolling, you can begin adding others so you have multiple income streams that don’t require too much time or attention.
How Passive Income Can Help Improve Your Credit Score
A poor credit score can lead to many challenges—like making it difficult to get approved for new lines of credit, loans, and rental applications—and cost you a lot of money in interest in the long run. Passive income can help you fix your credit by allowing you to pay off your debts. Lenders also look at your total income, so making additional income can help with approvals for new lines of credit, which can also help improve your score. It’s important to know the current state of your credit health. You can get a free credit report card on Credit.com which breaks down your credit score factors and assigns a letter grade for each area, or sign up for our ExtraCredit® subscription for additional credit tools.
A conventional home mortgage loan – one backed by private lenders instead of a government agency – is the most common type of financing used by home buyers. Conventional home loans offer several advantages and disadvantages that are important to understand.
Take the time to learn why many home sellers prefer buyers with conventional mortgage loans, the eligibility requirements, and what to consider if you have a different kind of mortgage loan or face rejection obtaining conventional financing.
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What is a conventional home loan and how does it work?
A conventional mortgage loan is a type of home loan that is guaranteed by private lenders such as banks, mortgage companies, and credit unions. It is not backed by any government agency like the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or US Department of Agriculture (USDA), which guarantee non-conventional financing like FHA loans, VA loans, and USDA loans, respectively.
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Conventional loans follow guidelines set by Fannie Mae and Freddie Mac, federally-backed entities formed by the US Congress. These entities play a pivotal role in bolstering stability, liquidity (consistent access to funds on reasonable terms), and affordability to the mortgage market and the numerous lenders that offer home financing.
Freddie Mac and Fannie Mae facilitate this by purchasing mortgage loans from lenders. They either retain these loans in their portfolios or package the mortgages into mortgage-backed securities that are up for sale.
As with any type of home loan, lenders of conventional mortgage loans provide funds to qualified borrowers to purchase a property. In exchange, borrowers agree to repay the funds with a fixed-rate or adjustable-rate interest attached over a set term, such as 30 or 15 years.
“Because conventional loans are not supported by the government, lenders who offer them want to make sure you can bear the financial cost of paying back your loan, in addition to your other debts. So they impose certain qualification restrictions for conventional mortgage loans,” says Rinal Patel, a real estate investor and founder of Webuyphillyhome.com.
What are the pros and cons of a conventional mortgage loan?
Understanding these pros and cons of conventional loans will empower you to make informed decisions when securing home financing. So, let’s explore the merits and limitations of conventional mortgages to help you navigate this significant aspect of home buying.
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Conventional loans pros:
A higher loan limit than many government-backed mortgages
A remarkable degree of flexibility in their terms. Repayment periods can range from 10, 15, 20, 25, and 30 years. Some lenders even allow you to pick a customized loan term, such as 8 years.
Conventional loans are available with either fixed or adjustable interest rates. Note that adjustable rates remain fixed, but only for a period of time early in the term — typically the first 3, 5, or 7 years. During this initial fixed-rate phase, homeowners benefit from lower interest rates, potentially saving thousands.
Unlike government loans that can charge an upfront insurance fee ranging from 1% to 4% of your loan amount, conventional loans do not impose an initial mortgage insurance fee, regardless of whether or not you make a down payment of less than 20%. However, If you put down less than 20%, you will need to pay monthly mortgage insurance premiums.
A wider variety of lenders offer conventional loans, making it relatively easier to find lenders offering these loans compared to government-backed alternatives.
Virtually any borrower and home location is eligible for a conventional loan (if you meet the lender’s requirements). On the other hand, to get a VA loan, you must be an active military member, veteran, or surviving spouse, and USDA loans limit the locations where you can purchase a home.
Sellers are typically more willing to accept an offer from a buyer preapproved for a conventional loan.
Conventional loans cons:
You may pay a higher fixed interest rate, especially if you have a lower credit score.
Lenders typically uphold stricter eligibility criteria and may require a higher minimum credit score than those offering government loans.
While some conventional loans can be secured with as little as 3% down, some lenders may require you to make a down payment of at least 20%. Government-backed loans, on the other hand, allow you to secure them with as little as zero down to 3.5%.
You’ll typically need to pay monthly mortgage insurance premiums with a conventional loan if you put down less than 20%. It’s important to note that there are ways to work around this and opt for single premium or split premium MI. In these cases, the MI can be paid for upfront by the buyer, seller or lender. It can even be financed into the loan amount in some cases. USDA and VA loans do not have a monthly mortgage insurance requirement.
Closing costs could be higher for a conventional loan than a government-backed loan.
Who qualifies for a conventional loan?
To be eligible for a conventional mortgage loan, you have to meet particular criteria that demonstrate your financial readiness.
“While credit score requirements may vary, a minimum credit score of around 620 is generally preferred. Aiming for a higher score can bring you better interest rates and terms,” explains Alex Shekhtman, CEO and founder of LBC Mortgage.
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Conventional loan lenders also look closely at your debt-to-income ratio (DTI), which measures how much of your income goes toward debt payments. You may not qualify for a conventional loan if your DTI is over 50%.
Additionally, conventional loan requirements vary across lenders. You may have the option to put down as little as 3%, but if you make a down payment of less than 20%, you will need to pay for private mortgage insurance
“Loan-to-value ratio (LTV) is a factor that lenders evaluate. A lower LTV ratio indicates less risk and showcases your financial stability – strengthening your chances of securing a conventional loan,” adds Shekhtman, who notes that the max LTV allowed for a conventional loan is 97% (which means you will need to put down at least 3%).
Why home sellers prefer conventional loans
There are several reasons why home sellers typically prefer to work with buyers who have conventional mortgage loan financing lined up over other types of financing.
“By offering greater flexibility in fewer restrictions, conventional loans can make the home sale process smoother and more efficient while also providing a sense of financial stability and responsibility on the part of the buyer,” says Adie Kriegstein, a licensed real estate salesperson for Compass Real Estate in New York City.
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Reason #2? “Conventional loans often require higher down payments. A seller can view this as a sign of financial responsibility, which can give them greater confidence in the sale,” Kriegstein continues.
Consider that FHA, VA, and USDA loans may come with more stringent requirements and restrictions, which could make the seller concerned that the deal may not close as expected.
“For example, FHA loans require mortgage insurance premiums, which can increase the overall cost alone,” says Kriegstein. “VA loans may have specific rules around the condition of the property, which can limit the pool of potential buyers or it and USDA loans may only be available for properties in certain rural areas.”
Erica Davis, brand manager for Guild Mortgage in Myrtle Beach, South Carolina, agrees that conventional loans help put sellers at ease.
“When sellers put their home up for sale, they want to ensure that the deal will close quickly and without any unnecessary stress. With a conventional mortgage loan, the process is often more predictable. And conventional loans often come with more flexibility in terms of negotiating prices and contingencies,” says Davis.
Tips for non-conventional loan borrowers
If you can’t qualify for a conventional loan, you can always pursue government financing in the form of an FHA loan, VA loan, or USDA loan, provided you meet the specific eligibility criteria for each loan program.
Truth is, buyers with non-conventional loans can still find sellers who are willing to complete a home transaction with them – even though it may take longer, according to Patel.
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“If you have non-conventional financing, you can improve your chances of convincing a seller to work with you if you make a more serious offer on the house, one that shows that you are ready and intently interested in purchasing the property,” she suggests.
Additionally, “you should work to improve your credit score and save for a larger down payment if possible,” advises Kriegstein.
To improve your odds of getting a seller to accept your offer when a non-conventional loan is involved, “consult closely with a mortgage professional who can help you navigate the financing process,” Shekhtman recommends.
The bottom line
Assuming you qualify for a conventional mortgage loan, you’ll stand a better chance of choosing from a wider variety of homes for sale in various locations and convincing a seller to accept your offer.
But don’t despair if you’re not immediately eligible for conventional financing. Partner with a trusted lending expert who can guide you through the process and recommend alternative loan options tailored to your needs.
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Is there such a thing as a 1 percent down mortgage? In other words, can you really make a 1-percent down payment when you buy a home? Well, you may be able to if you have a modest income and a 620 credit score.
But such mortgages are in their infancy. And only three lenders currently offer them. However, if they prove a success, others will likely join in and some of those may have easier eligibility rules. Already, one innovator is offering such a loan free of mortgage insurance.
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What is a 1 percent down mortgage?
The clue’s in the name. With one of these, you really do have to make only a 1 percent down payment when you buy a home.
The first 1 percent down mortgage was introduced as recently as April 2023. So, you can expect them to evolve quite quickly.
Undoubtedly, many mortgage lenders are watching how this innovation works out for the pioneers and their borrowers. If they like what they see, 1 percent down mortgages could become widely available mortgage programs.
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How does one of these mortgages work?
The mechanics couldn’t be more straightforward. As long as you’re eligible, you bring 1% of the home’s purchase price to the closing. And the lender brings the other 2% as a gift. That’s a no-strings grant, which never has to be repaid.
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In fact, it’s even better than that. Because, if you have a 3% down payment, the lender may still give you the 2% grant, taking your down payment to 5%. Just note that 5% seems to be the maximum under these programs.
Another thing to bear in mind is that a lender might have a cap on the grant it will provide. For example, UWM says it won’t chip in more than $4,000 in total.
Finally, be sure to study your mortgage quote (loan estimate) carefully. Because 1 percent down mortgages are still so rare, we haven’t been able to assess how competitive their interest rates and closing costs are compared with other home loans. So, it’s down to you to make sure you get a great deal.
Qualifying for a 1 percent down mortgage
There are two main qualifying hurdles for you to clear in order to be eligible for one of these loans. The first is straightforward: You need a FICO credit score of 620 or higher.
The second is a bit more complicated. It concerns something we mentioned earlier: a modest income.
But what does that even mean? Well, luckily, there’s a definition for these loans. It states that your income must be at or below 80% of the area median income (AMI) where you’re planning to buy.
Still unclear? You’re not alone. You can use a lookup tool on Fannie Mae’s website to check that AMI for your area. Multiply that by 80% (or .8 on a calculator). If your income is the same or lower, you can go ahead and apply. But, if it’s higher, you’re out of luck. Check out the other low down payment mortgages we mention below.
Rocket Mortgage gives an example of AMI in action: “You can’t qualify if you make higher than 80% of the median income in the area in which you’re looking to buy. For example, if you live in Macomb County, Michigan, the area median income is $90,800. You can’t use [earn] more than $72,640 to qualify for this ($90,800 ×.8 = $72,640).
UWM says its other qualifying criteria are the same as those for Freddie Mac’s Home Possible® or Fannie Mae’s HomeReady® loans. And we shouldn’t be surprised if other lenders have the same requirements. You may also find lenders restricting these mortgages to single-unit family homes for owner occupation.
Pros and cons of a 1 percent down mortgage
The 1 percent down mortgages can offer an enticing path to homeownership with minimal upfront costs, but they also have their pros and cons to consider.
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The pros of these mortgages are apparent:
The lender gifts you 2% of the purchase price
First-time homebuyers can achieve their homeownership dreams more quickly than if they had to save up a 3% or 3.5% down payment
Your savings can be used for what you want: closing costs, furniture, and other financial goals.
The cons are:
Not everyone is eligible for this loan product
You need to be sure you’re getting a competitive deal overall
Your risk of spending some time with your home “underwater” (when your home’s value is less than your mortgage balance) is higher
It’s worth expanding on that last point. Having an underwater mortgage loan can trap you in your home. You can’t easily sell or refinance because you can’t “redeem” (fully pay back) your existing mortgage loan.
This doesn’t usually matter if you want to stay put anyway. In the past, average home values have typically recovered (and then some) fairly quickly. But, if you absolutely need to move during that underwater time, you can feel trapped. One escape route may be to rent out the home.
Lenders that offer a 1 percent down mortgage
At the time of writing this article, only three lenders offered these mortgages. Those are:
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Rocket Mortgage
The Rocket Mortgage 1 percent down product is called ONE+ loan. And it is the one that charges no mortgage insurance. On a $250,000 mortgage, Rocket reckons that could save you $245 every month for an average of seven years. That’s more than $20,000 in total.
Rocket doesn’t specify a cap on its down payment grant but quotes an example of $6,000. So it’s more generous than UWM’s $4,000 cap.
Rocket Mortgage used to be called Quicken Loans and says it is America’s largest mortgage lender. It came top in the 2022 J.D. Power U.S. Mortgage Origination Satisfaction Study.
United Wholesale Mortgage (UWM)
Like Rocket, UWM says it’s “the #1 overall mortgage lender and purchase lender in the nation.” While they can’t both be No. 1, there are probably different data sources and ways of interpreting the numbers.
Borrowers can’t approach UWM directly. It operates through its partners, which are mortgage brokers, correspondents and financial institutions. So, you should ask brokers whether they can help get you a UWM Conventional 1% Down loan.
Zillow
The latest lender to offer 1 percent down mortgages is Zillow Home Loans, which launched its program in August 2023. At that point, its offering was available only in Arizona. But it said it planned to expand to other states.
In its launch press release, it is light on the details of its eligibility criteria for these mortgage loans and we are assuming that its income and credit score requirements are the same as the others.
Zillow expands on one of the benefits of its new home loans: “… by reducing the down payment loan amount to 1% of the purchase price, a home buyer looking to purchase a $275,000 home in Phoenix, Arizona, who makes 80% of their area’s median income and saves 5% of their income would need only 11 months to save for the down payment. By comparison, the same buyer who needed to save 3% of the purchase price would require two and half years (31 months) to save that amount.”
With Zillow offering 1 percent down mortgages now, it will be interesting to see how other lenders respond.
Other low down payment mortgage options
A few lucky people can qualify for a 0% down mortgage. And they might not be inclined to make even a 1% down payment.
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Those are the people who are eligible for:
VA loans — You must be a veteran or service member or someone in a tightly defined and closely associated group. Surviving spouses are one example
USDA loans — You must adhere to income limits and be buying in a place designated as rural by the U.S. Department of Agriculture
If you can’t get one of those, you may be able to get a loan with a 3% down payment. Choose between Freddie Mac’s Home Possible® or Fannie Mae’s HomeReady® loans. But you’ll need a 620 credit score to qualify.
If your score is between 580 and 619, you could apply for an FHA loan. These come with a 3.5% down payment. However, if you have time, there are mortgage insurance advantages if you drive your score up to 620 and go for a Fannie or Freddie loan.
The bottom line
A 1 percent down mortgage could provide an exciting opportunity for those on modest incomes who wish to become homeowners. Your lender gifts you 2% of the home’s purchase price so that your total down payment on closing is 3%.
Providing you qualify in other ways puts you in line for a conforming loan, which meets Fannie Mae or Freddie Mac’s rules. And that provides real advantages for your mortgage insurance costs over an FHA loan.
Indeed, Rocket Mortgage says it won’t charge any mortgage insurance on its 1 percent down mortgage, which might save you $20,000+ compared to a standard Fannie or Freddie loan.
So, for those who can get them, these new mortgages can be great. Just be sure to check that your overall deal is competitive.
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1 percent down mortgage FAQ
Can you put down 1% on a house?
Yes, if your income, credit score, and other circumstances meet the qualifying criteria for a 1 percent down mortgage. You could also do so if you’re eligible for a 0% down loan and choose to make a down payment, which might earn you a lower mortgage rate.
How does a 1 percent down mortgage work?
You put down 1% and your lender gives you a 2% grant, making a 3% down payment. That’s the minimum for a conforming loan from Fannie or Freddie and those typically offer attractive deals.
How do you get a 1% down mortgage?
If you think you’re eligible, apply on Rocket’s website, contact Zillow (Arizona only at the time of writing), or ask mortgage brokers about UWM’s product. Other lenders may begin offering these products soon so watch out for those.
The world of real estate is vast and varied, with numerous options catering to renters’ diverse needs. Among the many choices available, private-owner house rentals have carved out a distinct niche, appealing to those seeking a more individualized experience.
These rentals, run by individual homeowners rather than large corporations, possess their own unique set of merits and challenges. We’ll provide an in-depth exploration of the benefits, drawbacks and nuances surrounding houses for rent by a private owner, contrasting them with more traditional rental avenues.
Defining private-owner house rentals
Private-owner house rentals refer to properties that are rented out by individual homeowners rather than by property management companies or real estate corporations. These private-landlord rentals can range from vacation homes to apartments to single-family residences and more.
Pros of privately owned house rentals
If you’re looking for a place to rent, private-owner house rentals emerge as a unique option, often favored for their personalized approach and distinct charm. Unlike properties managed by larger firms, these rentals offer potential benefits that arise from direct interaction with individual homeowners and the idiosyncratic character of their properties. Let’s delve into some of the prominent advantages of choosing private owner house rentals over those run by large companies.
Personal touch: Private homeowners might offer a more personal touch compared to larger property management firms. This could mean more flexibility in terms of lease agreements, move-in/move-out dates or any other limitations and stipulations.
Direct communication: Renters often communicate directly with the property owner, often leading to quicker response times for maintenance requests or other concerns.
Unique properties: These rentals might have distinctive and unique properties that aren’t typically found in larger apartment complexes or managed communities. Think crown molding, brick walls, hardwood floors and more.
Potential for lower costs: Without the overhead of a property management company, private owners might offer better rental prices.
Flexible terms: Some private owners might be open to short-term leases, month-to-month arrangements or other non-traditional rental agreements.
Cons of privately owned rental properties
Now that we’ve covered some of the most appealing aspects of private-owner rentals, let’s dive into some of the downsides and pitfalls that can potentially affect your experience with a private-owner house rental.
Inconsistency: The experience can vary widely from one private owner to another. While some might be highly professional and organized, others may be less so.
Limited amenities: Private rentals might not offer the same amenities that larger complexes or communities do, such as swimming pools, fitness centers or security services.
Maintenance delays: Some private owners might not have the resources or connections to address maintenance issues as promptly as larger management firms.
Lack of formal process: There may be a lack of formal processes in areas like application screening, security deposits and lease agreements, which could lead to potential legal disputes.
Potential for bias: Without the procedures and policies of a larger company, there might be more room for unconscious bias or discrimination in the rental process.
Private-owner house rentals present a compelling blend of advantages and challenges. While their personal touch can provide renters with a tailored experience, the potential inconsistencies and lack of standardized processes can pose challenges.
As with any rental decision, potential tenants should carefully consider the pros and cons before making any decisions, ensuring that their choice aligns with their preferences, needs and expectations for a harmonious living arrangement.
Other considerations when looking at houses for rent
Like most of life’s major decisions, there’s more to consider about private-owner house rentals than just the pros and cons.
Research is key: Due diligence is essential when considering a private owner house rental. Potential renters should research the property, check references and understand the lease terms thoroughly.
Legal protections: Both renters and landlords should be aware of local rental laws and regulations to ensure that they’re both protected. This might include understanding rights related to security deposits, eviction processes and property maintenance.
Contracts: even if renting from a private owner, having a written lease or rental agreement is crucial. This document should clearly outline the terms of the rental, including rent amount, duration of the lease, maintenance responsibilities and any other relevant details.
While there are many advantages to this type of arrangement, potential challenges can arise. As always, thorough research and understanding of the rental agreement are essential for a successful rental experience.
Nuances in legalities between a house and an apartment
Understanding the differences between renting a house and an apartment from a private owner goes beyond just the physical structure; there are also legal nuances to consider. Both situations will involve lease agreements and rights for tenants and landlords, but there are some distinctions to be aware of:
Zoning and land use
Houses might be situated in areas with zoning restrictions that dictate how the property can be used. For instance, certain residential zones might prohibit running a business from home or may have specific parking regulations. On the other hand, apartments are generally in zones designated for multifamily dwellings, which can come with their own set of rules and regulations.
Maintenance and repairs
For houses, the responsibility for external areas like lawns, gardens and driveways often falls on the tenant unless otherwise stipulated in the lease. With apartments, the responsibility for maintaining common areas typically rests with the property management or homeowners association.
Security deposits
Both houses and apartments usually require security deposits to cover wear and tear. However, with houses, there might be additional deposits or fees for landscaping or potential damage to larger outdoor areas.
Utility responsibilities
In apartments, certain utilities like water, trash collection or electricity might be covered by the landlord or the property management, especially if they are shared resources. In contrast, tenants renting a house usually bear the responsibility for all utilities, including water, electricity and garbage.
Liability
Homeowners might have broader liability concerns. For example, suppose a person gets injured on the property, like slipping on an icy driveway. In that case, the responsibility might fall onto the homeowner or the tenant, depending on the terms of the lease. In apartment complexes, the liability for common areas is usually on the property management or owner.
Subleasing and assignments
Lease agreements for houses might be more flexible compared to apartments, which may have stricter guidelines enforced by property management. This isn’t a strict rule, but a general trend given that a private landlord might negotiate these terms.
Pets and modifications
Apartments often have strict rules regarding pets, alterations or additions to the unit. Houses might have more flexibility, but that’s not a given. Still, a house renter might have more latitude to request permissions for larger modifications or to keep larger pets, possibly dodging some breed restrictions in the process.
Is a private-owner house rental right for you?
While the basic principles of landlord-tenant law apply to both houses and apartments, the specific responsibilities, rights and restrictions can differ based on the nature of the property. Renters and landlords need to be clear on these nuances to ensure a smooth rental experience and avoid potential disputes. Navigating the intricacies of real estate rentals requires a nuanced understanding of each available option. Private-owner house rentals offer an alternative to the conventional rental route, underlined by a personalized touch and distinctive property features.
However, as with all choices, potential renters must balance these benefits against possible drawbacks. By staying informed and conducting thorough research, renters can make educated decisions and find a home that aligns seamlessly with their needs.
A native of the northern suburbs of Chicago, Carson made his way to the South to attend Wofford College where he received his BA in English. After working as a copywriter for a couple of boutique marketing agencies in South Carolina, he made the move to Atlanta and quickly joined the Rent. team as a content marketing coordinator. When he’s off the clock, you can find Carson reading in a park, hunting down a great cup of coffee or hanging out with his dogs.
With an installment loan, you receive a lump sum of money up front and then pay it back (plus interest) in a series of fixed payments over the term of the loan. The repayment period can be several months to many years.
There are many types of installment loans, including personal loans, mortgages, and auto loans. Read on to learn exactly how these loans work, their pros and cons, and how they compare to revolving loans.
What Is an Installment Loan?
Simply defined, an installment loan is a type of loan that allows you to receive the full borrowing amount (loan principal) all at once and then repay it in fixed monthly installments over a set period (the loan’s term). Each installment consists of both principal and interest, and the loan term can range from a few months to several years.
Common examples of installment loans include car loans, mortgages, personal loans, and student loans.
Installment loans are also known as closed-ended loans (or closed-ended credit accounts). They differ from revolving loans, like credit cards, which are open-ended accounts. With an open-ended account, you can use and repay funds repeatedly for as long as the account remains open and in good standing.
How Do Installment Loans Work?
When you take out an installment loan, you immediately receive the principal. You then start paying it off — typically with interest — in regularly scheduled payments for a set number of weeks, months, or years. Once the loan is paid back in full, the account is closed.
To better understand how installment loans work, let’s consider an example:
Let’s say you need to borrow $10,000 to cover home repairs. You apply for a personal installment loan with a 5% annual percentage rate (APR) and a loan term of 3 years. If approved, you’ll receive the full $10,000 upfront. Over the next 36 months, you’ll make fixed monthly payments, including principal and interest, until the loan is fully repaid.
Pros and Cons of Installment Loans
To better understand if a personal installment loan is the right fit, let’s look at some pros and cons associated with this type of lending product.
Pros
Cons
Provides funds for a large purchase
Interest and fees add to your costs
Fixed payments help with budgeting
May have long repayment period
May have lower interest rates than other loan products
May need good credit to qualify
Pros
• Helps you cover a large expense Installment loans can give you quick access to the money you need for bigger purchases, such as a house, car, or home renovation.
• Predictable payments Interest rates are typically fixed and each loan payment is the same throughout the loan term, making budgeting easier.
• Structured repayment Installment loans have fixed repayment schedules, ensuring you know exactly when the loan will be paid off.
• Access to larger amounts Installment loans often allow for borrowing larger sums compared to other types of loans.
• Potential lower interest rates Depending on your creditworthiness, installment loans may offer lower interest rates than credit cards or payday loans.
Cons
• Interest costs Typically, borrowers need to pay interest on the loan amount, which adds to the total cost.
• Credit requirements Qualifying for installment loans may require a good credit score, making them less accessible for individuals with poor credit.
• Potential fees Some lenders may charge origination fees or prepayment penalties, so it’s essential to review the terms and conditions.
• Not open-ended It’s unlikely you’ll be able to add to your loan amount if you find you need more.
• Potentially long commitment Some installment loans come with long repayment terms, which means you must commit to making regular payments over a long period of time.
Installment Loans vs Revolving Credit
Installment loans work differently than revolving credit. With revolving credit, you don’t receive a lump sum of money up front and then pay it back (plus interest) on a set schedule. Instead, you get approved for a certain credit limit, then borrow what you need (up to your approved limit) as you need it. You only pay interest on what you borrow and, once you repay what you’ve borrowed, that money becomes available to borrow again.
Here’s a closer look at how installment loans compare to revolving credit.
Installment Loans
Revolving Credit
Payment structure
Fixed monthly payments
Minimum payment due varies monthly
Loan term
Predetermined
No fixed term
Interest charges
Interest applied to entire balance
Interest applied to outstanding balance
Credit limit
Borrow a lump sum up front
Pre-approved credit limit/td>
Interest rates
Tend to be lower
Tend to be higher
Types of Installment Loans
Installment loans are available for various purposes. Here are some common types.
Auto Loans
Car loans are a common type of installment loan. Typically, you make a down payment on a car, then take out an auto loan to cover the purchase price balance. You then make monthly fixed payments to the lender for the term of the loan, which can range anywhere from 24 to 84 months.
Mortgages
Mortgages are long-term installment loans used to finance the purchase of a home. You typically make a downpayment (say 20% of the home’s purchase price) and get a loan for the balance at an agreed-upon interest rate. Common mortgage loan terms are 15 or 30 years.
Personal Loans
Personal loans are typically unsecured installment loans that can be used for various purposes, such as debt consolidation, paying for a wedding, or making home improvements. You receive the funds in a lump sum and once you get the cash, you must make payments until the debt has been fully repaid. Terms can be anywhere from one to seven years.
Student Loans
Student loans are a type of installment loan that pay for college and related expenses (including tuition, fees, books, and living expenses). There are two types of student loans — federal and private student loans. Which type you get will determine how your interest rate is calculated and your repayment options.
Buy Now, Pay Later Loans
Buy now, pay later loans allow you to make purchases and pay them off over time, typically interest-free if repaid within a specific period, which is generally a few weeks. If you don’t repay the loan within the set term, however, you can end up paying high interest rates and fees.
Installment Loans and Credit Scores
The typical credit requirements to qualify for an installment loan vary among lenders. Generally, a higher credit score increases your chances of approval and may lead to more favorable loan terms, such as lower interest rates. Lenders may also consider factors like income, employment history, and debt-to-income ratio when evaluating your application.
The Takeaway
Installment loans can provide a helpful financing solution for various needs, offering predictable repayment schedules and the ability to borrow larger sums. However, it’s essential to carefully consider the pros and cons, compare different types of loans, and review credit requirements before applying.
Taking the time to understand installment loans will help you make informed decisions and choose the best financing option for your specific circumstances.
If you are thinking about using a personal installment loan to cover a large expense, you may want to consider a SoFi personal loan. SoFi personal loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.
See if a personal installment loan from SoFi is right for you.
FAQ
Is there a difference between personal loans and installment loans?
Yes. Personal loans are a specific type of installment loan, but not all installment loans are personal loans. Installment loans, in general, refer to loans that are repaid in fixed monthly installments over a specific period. Personal loans, on the other hand, are installment loans that can be used for various purposes, such as debt consolidation or unexpected expenses.
Which consumer loans are installment loans?
Several types of consumer loans are considered installment loans. Some common examples include:
• Auto loans
• Mortgages
• Personal loans
• Student loans
• Buy now pay later loans
These loans are repaid in regular installments over a predetermined period.
Can installment loans hurt your credit score?
Installment loans can potentially impact your credit score. If you make timely payments and manage the loan responsibly, it can have a positive effect on your credit by demonstrating your ability to handle debt. If, on the other hand, you miss payments or default on the loan, it could negatively impact your credit. It’s important to pay each installment in full and on time to maintain a good credit score.
Photo credit: iStock/Delmaine Donson
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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Did you know that there is an easy way to earn money while driving your car? Yes – you can get paid to advertise on your car! Car advertising is becoming more and more popular as companies are trying to find ways to reach new customers. Think of it like billboards – the companies are…
Did you know that there is an easy way to earn money while driving your car? Yes – you can get paid to advertise on your car!
Car advertising is becoming more and more popular as companies are trying to find ways to reach new customers.
Think of it like billboards – the companies are simply putting more ads on the road to hopefully sell more of their products.
If you’re interested in this idea, there are many companies that will pay you to put an advertisement on your car. This can be an easy way to make extra money in your spare time with little effort needed from you.
Quick Summary On How To Get Paid To Advertise On Your Car
Car wrap advertising is a way to earn extra money while driving like you normally do.
You may be able to earn around $100 to $400 a month with a car wrap.
Car wrap companies such as Nickelytics, Wrapify, and Carvertise are popular with this side hustle.
What Is Car Wrap Advertising?
Car advertising is when companies pay you money to put ads on your car. This makes your car like a moving advertisement while you drive around doing your normal everyday tasks (like driving to work or going to the grocery store).
This type of advertising is good for businesses because it lets their ad reach lots of people no matter where the car goes.
Many car advertisement companies use a form of car advertising known as car wrapping. The ads can cover either a part or the whole of your car, depending on what the advertiser wants.
Here are two examples of the types of car wraps:
Full car wraps – This is when full wraps are put on cars, covering the entire outside of the car with a vinyl graphic. These wraps can feature colorful designs, logos, and advertising messages related to the client’s brand or product.
Partial car wraps – Partial wraps cover sections of the car (such as doors, the back window, or specific panels). These typically pay a little less because it does not cover your entire car.
How much can you get paid to advertise on your car?
The amount you can earn from car advertising depends on things like the company you work with, the specific campaign, and the distance you drive. It’s a fairly passive income stream too, which is nice.
On average, drivers can earn around $100 to $400 per month. Also, some companies might give signup bonuses ranging from $100 to $300.
Recommended reading:
6 Ways To Get Paid To Advertise On Your Car
Below, I will be talking about 6 legitimate companies that pay you to put ads on your car.
1. Wrapify
Wrapify is a popular car wrap advertising company that pays you to advertise on your car. Companies that use Wrapify for advertisements include Petco, Cricket Wireless, Alaska Airlines, Uber, Coca-Cola, and more.
They have different levels of coverage, like full wrap, partial wrap, or panel wrap. The more coverage you choose, the more money you can earn. To get started, you need to download their app, register, and wait for an advertising campaign to join.
Wrapify pays its drivers based on the miles covered and the area they drive in. There is no minimum amount of miles that you must drive each day. Drivers in more populated urban areas can usually expect to earn more money than those in rural regions (this is because they want the most people to see the ads!).
You can earn around $264 to $452 per month for a full wrap and around $181 to $280 for a partial wrap. The full wrap will pay you the most amount of money.
2. Carvertise
Carvertise has been around since 2012, and they connect drivers with advertisers, turning your car into a mobile advertising platform. It is known for having hassle-free car wrapping with professional installation and removal of the advertising material.
Some of the brands that partner with them include Netflix, Planet Fitness, NASCAR, Wawa, Buffalo Wild Wings, Huggies diapers, and more.
Ads placed by Carvertise typically start at around $100 per month and go up to $500 per month.
To get started with Carvertise, you will submit a driver application that asks questions like where you normally drive. Then, you’ll be matched to a brand that is looking for your driving habits. After that, you get your car wraps and Carvertise will pay you each month through direct deposit.
Once your campaign is over, Carvertise then removes the wrap for you (you don’t pay for this, they do), and they will then look for another advertising partnership for your car.
3. Nickelytics
Nickelytics is looking for gig economy drivers who want to make extra money by wrapping their cars (such as people who drive for DoorDash, Lyft, and even rideshare drivers).
To get started, you simply download the Nickelytics app on your phone. They will ask you questions about yourself and the car you have. Then, they will ask you to turn on the app while you’re driving so that they can see where you drive and the mileage you are driving. This is so that they can better match you with companies. Once you are matched with a company, you will then get the wrap installed.
They pay around $175 to $250 each month that you drive around in a wrapped vehicle.
4. StickerRide
StickerRide is a company that lets you turn your car into a mobile billboard and wrap your car for money. The site is app-based, and you can choose the campaign offers that interest you.
This StickerRide app gives you points for each driven mile, and you can earn more depending on the location and time of day. StickerRide also has other ways to increase your earnings, such as by taking part in quests and flash mobs where you drive to a specific location so that the car advertising can be seen by more people.
You receive around one point for each mile driven, and each point is worth around $0.01 in the U.S. (and £0.1 for the UK).
5. Stickr
Stickr is a little different from the other sites above that pay you to place sticker ads on your car. This is because they don’t wrap your whole car or even panels on your car. Instead, they do rear window advertising.
The company provides drivers with an opportunity to make a passive income by simply placing an advertisement on a car’s back window.
To join this site, you simply sign up online, choose a campaign and car advertising decal, and then it will be shipped to you with simple instructions for applying the decal to your car.
Stickr says you can earn up to $2,300 in cash and gift card compensation each year.
6. Free Car Media
Free Car Media is another company where you can get paid to wrap your car. It can take anywhere from 3 days to several months in order to be matched with a company that wants to place an ad on your car.
This site does both full wraps and rear window wraps, and their campaigns can last anywhere from 6 to 24 months (or sometimes even longer).
Free Car Media claims that you could make up to $400 per month, depending on the advertiser and campaign.
Getting Started With Car Advertisements
Here’s how to get started with getting paid to put an advertisement on your car.
Eligibility criteria
Before you can get paid to advertise on your car, you’ll want to see what the car advertising companies require from you. Most companies require their drivers to have a clean driving record and pass a background check.
Also, you should have a valid driver’s license, car insurance, and be at least 18 years old. Some companies may also want your car to be a specific make, model, or year and be in good condition visually and mechanically. Many will ask for pictures of your car from different angles too.
Application process
Once you meet the eligibility requirements, the application process is pretty easy. First, research and choose a real company like Wrapify, Carvertise, or Nickelytics. Then, register with the company by submitting your personal information, your driving record, vehicle details, and some photographs of your car. Many of the car advertising companies above have a mobile app to download, available on Google Play or the App Store, which will make this all very easy.
After that, the company may perform a background check to make sure that you’re a reliable driver (after all, you would be representing the company that you are advertising for). Once you’re approved, you’ll then be matched with an advertising campaign, and your car will be wrapped with the advertisements.
How to get started with car advertisements
Here are the typical steps when it comes to getting paid for car ads with the different car advertising companies:
Register – Join the car advertising site of your choice by filling out an application online through your laptop or cell phone app (Android or Apple). This usually includes answering basic information about yourself, your driving habits (such as the number of miles you drive a day and your commute route), and details of your car such as make, model, and year.
Understand the contract – Carefully read the contract provided by the advertising company. Look for the length of the advertising campaign, expected driving routes, how and when you get paid, and any potential penalties for early termination of the contract or not meeting the driving requirements.
Get your car wrapped – Once you are matched with a company, the advertising company will wrap your car with the advertiser’s brand. The wrap is usually professionally installed and removed without damaging your car’s paint.
Start driving – After the wrap is installed, all you need to do is drive as you normally would. Your earnings will be calculated based on the agreed contract.
Remember, every company has different terms and procedures, so always thoroughly research each company before signing up.
Pros and cons of car advertising
There are pros and cons of car advertising. These include:
Pros:
Extra income – Car advertising can be a great way to earn some additional money without significantly changing your daily routine.
Flexible way to make extra money – You can choose the car advertising campaigns you participate in and how much you want to advertise on your car.
Low effort – After the initial setup of applying the ad to your car, there’s little additional effort required. All you need to do is drive so that people can see the ad.
Cons:
Limited control over ads – You may have limited control over the choice of advertisements displayed on your vehicle.
Potential wear and tear – If you do this a lot, then the frequent application and removal of ads could cause wear and tear on your car’s paint and finish over time.
Privacy concerns – With an advertisement on your car, you may experience a reduced sense of privacy while driving. For example, some people may come up to you while you’re parked to ask you questions, or they may assume that you have free stuff to give away inside.
Car advertising allows you to earn money while driving, but you’ll want to weigh the pros and cons first.
How To Recognize Car Advertising Scams
While there are legitimate car advertising sites, it’s important to be aware of the risks and know that car wrapping scams exist. There are MANY scams out there in the car-wraps-for-money industry.
Here are a few tips to help you avoid car advertising scams.
Real car advertising companies never ask for money up front – You should be suspicious of any company that requires payment or investment from you to get started. None of the companies above will ask you for money. There should also be no fees for decal installation or removal from a car wrapping company.
Too-good-to-be-true offers – If a site is saying that you’ll receive thousands of dollars a week for car advertising, it is most likely a scam. Real companies typically pay just a couple hundred dollars each month – this is not a full-time job.
Unsolicited offers and contacts – Scammers may send you a random email, cold phone calls, or social media messages with offers to get your car wrapped. But, I recommend sticking only with the reputable companies that you have done your own research on.
Poorly designed websites or communication – Scam companies may have unprofessional websites, use poor grammar, or have broken links. You should ignore these companies unless you are 1000% positive that it is real.
FAQs About Getting Paid To Advertise On Your Car
Below are answers to common questions about how to get paid to advertise on your car.
Do companies really pay to advertise on your car?
Yes, many companies will pay to advertise on your car, and this is a real way to make extra income. These are usually marketing agencies and brands that are looking for unconventional and cost-effective ways to reach new customers. They take advantage of everyday commuters to display their ads, making car advertising a win-win situation for both drivers and advertisers.
How much can you earn with car advertising? How much can I get paid to put an advertisement on my car?
You can earn between $100 to $500 per month, depending on the coverage of advertisement on your car. Smaller wraps, which may cover your doors or rear window, can earn you between $100 to $250. Full wraps that cover your whole car can make you around $250 to $500 each month. A car ad campaign typically lasts for several months.
What companies pay you to put their logo on your car?
There are many real companies that pay for advertising on your car, such as Wrapify, Carvertise, and Nickelytics. Before signing up, you should always research the company and make sure it is legitimate and trustworthy.
How much do you get paid to Carvertise?
Earnings through Carvertise can vary based on factors like the duration of the campaign, your location, and coverage of the advertisement. Ads placed by Carvertise can usually earn you around $100 to $500 each month.
How much does Wrapify pay?
With Wrapify, you can earn around $264 to $452 per month for a full wrap and around $181 to $280 for a partial wrap. The full wrap is the highest way to get paid to wrap your car.
Will Red Bull pay you to advertise on your car?
Red Bull does not pay for car advertisements. This is a common scam and you will not get paid to wrap your car for Red Bull. You can read more about this on Red Bull’s website here.
Can I choose which advertisements go on my car?
Typically, the advertising company matches drivers with advertising campaigns based on the information you answer when you register. Some companies may give you the option to reject campaigns that you’re not comfortable with, while others may assign campaigns automatically.
What types of ads are used for car advertising?
Car advertising usually involves using vinyl wraps or decals applied to your car’s exterior. There are three main types: small wraps, which cover only your doors and rear window; partial wraps, which also include side panels and the back of your car; and full wraps, which cover the entire surface of your car. The material is designed to protect your car’s paint job and can be removed without damage when the advertising campaign is over.
How To Get Paid To Advertise On Your Car – Summary
Car advertising is a real method of earning extra cash by allowing companies to display their advertisements on your car.
Companies such as Wrapify, Carvertise, Nickelytics, and others are real paid car advertising opportunities.
You can potentially earn a significant amount from car advertising each year, depending on factors like the advertising company, your location, the type of car you have, and the amount of driving you do. Plus, it also depends on whether you choose to do a full car wrap or a small decal.
If you want to start making money advertising on your car, then check out the sites above!
Are you interested in learning how to get paid to advertise on your car?
Delaware may be one of the nation’s smaller states, but it certainly packs a punch in character and opportunity. From its strategic location on the East Coast and tax-friendly policies, to its vibrant communities and natural beauty, there is much to appreciate about life in the First State. However, like any location, living in Delaware has its share of drawbacks. In this Redfin article, we will look at what it’s like to call this state home, exploring the unique pros and cons of living in Delaware. So whether you’re looking for homes for sale in Wilmington, apartments in Dover, or just want to learn more about the area, join us as we embark on a journey through the First State.
Pros of living in Delaware
1. No sales tax and other great tax benefits
One of the standout advantages of living in Delaware is the absence of a state sales tax. This unique feature sets Delaware apart from many other states in the U.S. Residents of the “First State” can enjoy tax-free shopping, making their dollars stretch further and saving significantly on everyday purchases, big-ticket items, and even luxury goods. Additionally, the state does not tax Social Security income, and no inheritance or estate tax exists. These favorable tax policies contribute to a lower overall tax burden for individuals and families, offering an attractive financial incentive for those who appreciate keeping more of their hard-earned income.
2. Proximity to major East Coast cities
Delaware’s prime location on the East Coast offers a significant advantage to its residents. Positioned between the bustling urban centers of New York City and Washington, D.C., Delaware provides quick and convenient access to these metropolitan hubs’ cultural, economic, and professional opportunities. The state’s well-connected transportation infrastructure, including I-95 and Amtrak, makes commuting or weekend getaways a breeze. This geographic advantage allows Delawareans to enjoy the benefits of living in a more relaxed and affordable environment, while still having the vast array of amenities and services of major cities just a short journey away.
3. Beautiful coastal areas
The state boasts a stunning stretch of coastline along the Atlantic Ocean, featuring pristine beaches such as Rehoboth, Bethany, and Dewey Beach, each with a unique character. These coastal havens offer opportunities for sunbathing, swimming, water sports, and scenic walks along the boardwalks. Additionally, Delaware’s coastal areas are home to picturesque fishing villages like Bowers and charming beach towns, each exuding a sense of nostalgia and offering delectable seafood dining options.
4. Historic charm and cultural heritage
As one of the original 13 colonies, the state boasts a rich legacy celebrated through numerous historic sites and museums. Delaware enchants residents with its rich tapestry of history, ranging from the charming colonial-era buildings in New Castle to Dover’s pivotal role in early American history. Its charming historic districts and landmarks provide a living connection to the past, while cultural festivals, arts communities, and educational institutions help foster a dynamic appreciation for heritage.
5. Sense of community
Delaware’s residents often praise the state’s strong sense of community, fostered by numerous small towns and close-knit neighborhoods. Communities frequently unite for local events, festivals, and volunteering, reinforcing neighborly bonds and nurturing a supportive, inclusive atmosphere. The state’s modest size maintains this sense of connection even in larger cities, ensuring a network of support and meaningful relationships. This pervasive sense of belonging significantly enriches residents’ quality of life, adding to Delaware’s charm and making it an inviting place to live.
Cons of living in Delaware
1. High cost of living in certain areas
While Delaware offers diverse, appealing features, including its tax benefits and coastal beauty, it’s not without drawbacks, particularly concerning the cost of living in specific areas. Sussex County, famed for its scenic coastal communities, experiences a cost of living approximately 3% higher than the national average, driven in part by the elevated demand for housing in these picturesque towns. The state’s median sale price, at $341,500, is lower than the national median of $412,001. However, the median sale price in Lewes soars to $596,000, underscoring the considerable discrepancy in real estate costs. This higher cost of living in select areas can pose financial challenges for residents, affecting housing affordability and everyday expenses but there are many affordable places to explore.
2. Limited public transportation options
One notable drawback of living in Delaware is the limited public transportation options, particularly in some less urbanized areas. While the state’s metropolitan regions offer some public transit services, like Dover, which has a transit score of 28, the coverage and frequency of these systems can be limited. This leaves residents in more rural or suburban areas reliant on personal vehicles for commuting and daily transportation. This lack of extensive public transport can lead to increased traffic congestion, higher commuting costs, and limited accessibility for those who do not own a car.
3. Extreme weather fluctuations
Delaware’s weather patterns are characterized by extreme fluctuations, which can be a considerable con for residents. The state experiences all four seasons, but their transitions can be abrupt and unpredictable. Winters can bring heavy snowfall and cold temperatures, while summers can deliver sweltering heat and high humidity. Although often pleasant, the spring and fall seasons can also be marked by sudden weather changes, including severe thunderstorms and even hurricanes in some years. These rapid shifts can challenge planning outdoor activities and dressing for the day.
4. Coastal flooding and hurricane risks
With a significant portion of the state’s population concentrated along the Atlantic coast, Delawareans are more exposed to the potential consequences of coastal flooding and hurricanes. During hurricane season, the state faces the risk of severe storms and rising sea levels, which can lead to flooding, property damage, and displacement of residents. While the state has implemented measures and emergency response plans, including potential evacuation protocols, the recurrent threat of hurricanes can be a cause for concern, impacting both homeowners and the overall quality of life.
5. Smaller job market
The number of job openings and career advancement prospects can be more limited than larger metropolitan areas. The state’s compact size also means that commuters often look beyond Delaware’s borders for job options, adding to the complexity of the employment landscape. Consequently, career growth and industry diversity can be challenging, making it more difficult for professionals in certain fields to find their desired positions within the state.
Pros and cons of living in Delaware: Bottom line
Ultimately, the decision to call Delaware home depends on individual priorities and preferences. For some, the state’s serene coastal beauty and tax benefits may outweigh the disadvantages. For others, the challenges may weigh more heavily. Ultimately, living in Delaware balances the pros and cons to create a unique and fulfilling lifestyle in the “First State.”