It’s tax return time! Now is the time of year when everyone is getting their tax returns back and thinking about how to spend their refund. Invest your tax return in your future, rather than spend it. This is the ideal time to use your tax return toward buying your first home, investing in a rental property, or use that refund toward purchasing a larger home. As enticing as it may be to spend your tax return on flashy toys and expensive vacations, saving for a down payment and buying a home can start you off on the road to financial success.
The biggest obstacle for many Home Buyers is saving money for a down payment and they often overestimate what is needed. Think of your income tax refund as a forced savings. If you are thinking about purchasing a home, you may want to deposit your tax return into an account that is solely dedicated to your down payment fund. Saving money for your down payment is a wonderful practice for saving money for unexpected home repairs.
It is best to put 20% down, but there are many different programs available for home buyers. You can find the programs that are available in your area at Down Payment Resource, or it is also a good idea to talk to a local lender. They can evaluate your finances and help you understand what type of loans you’d be eligible for. For some reputable local Lenders click here.
By using your tax refund you may actually be able to qualify for a larger home. At the same time you are lowering your monthly mortgage payments. A larger down payment often makes your monthly mortgage lower than what you are paying in rent. Many renters may be ready to buy a home sooner than they realize. Whether you are purchasing your first home or investing in a second property you will reap the tax benefits for many years to come. Are you ready to invest in your future and buy a home?
Here Are Some Ways To Use Your Tax Return When Buying a New Home:
- Down payment
- Pay closing costs
- Buy down the interest rate
- Pay off debt to help you qualify
- Buy out or eliminate private mortgage insurance
- Buy furnishings or home improvements