Are you gearing up to purchase a home this year? If you are, then you’re likely aware of the various expenses involved, from the down payment to closing costs. But did you know that your tax refund could serve as a helpful contribution towards these expenses? According to Credit Karma, if your goal is to transition from renting to homeownership, your tax refund can kickstart your journey. Even if you’ve already begun saving, your tax refund can accelerate your progress.
While the exact amount of your tax refund may vary, it’s helpful to have a general idea of what to expect. CNET reports that this year, the average tax refund has increased by 6.1%, from $2,903 last tax season to $3,081 this season.
Exciting news, isn’t it? Keep in mind that your refund amount will differ. However, if you do receive a refund, here are some ways you can utilize it when purchasing a home, as suggested by Freddie Mac:
Saving for a down payment: Saving enough money for a down payment is often a significant hurdle in the path to homeownership. Using your tax refund can expedite your savings and bring you closer to your goal.
Covering closing costs: Closing costs encompass various expenses incurred during the closing process and typically range from 2% to 5% of the total home purchase price. Applying your tax refund towards these costs can be beneficial.
Lowering your mortgage rate: Some lenders offer the option to buy down your mortgage rate, which can be advantageous if current rates and home prices strain your affordability. If you qualify for this option, investing your tax refund upfront to secure a lower mortgage rate may be worthwhile.
The most effective way to prepare for homeownership is by collaborating with a team of reliable real estate professionals who comprehend the process and can guide you through the necessary steps.
In conclusion, your tax refund presents an opportunity to bolster your savings for homeownership. Reach out to a local real estate professional to explore your options, as purchasing your dream home might be more attainable than you realize.