Taxes Are Filed: What Will You Do With Your Return?
The deadline to file has passed and now, depending on when or how you filed, you might have a tax return deposited into your account. This may be money that you have accounted for or may be money that you consider as an extra bonus to be used as discretionary income. Have you thought about utilizing your tax returns for a down payment on your first – or next – home purchase?
When buying a home, there are seemingly countless things to consider: where to live, what kind of home you want to buy and – oh yeah – the up-front financial obligation. The first step, and many times the largest hurdle to home ownership, is coming up with the necessary down payment.
Depending on which program you’re looking into, the most common down payments are 3.5%-5.0% of the purchase price. According to the IRS, last year the average refund is approximately $3,000, so even if your tax return doesn’t cover the entire amount – it can certainly go a long way to bridging the gap from what you have and what is needed. If you’re saving correctly but need an extra bump to help with a down payment, a healthy tax return might be the answer. Your tax return might even make the difference between having mortgage insurance and not – which can save you significantly each month and over time.
Once you have decided it’s the right time for YOU to buy a home, why not utilize what many Americans consider their “forced savings account” of tax refunds and speak with an expert Loan Advisor to walk you through the process of your first – or next – home purchase.
Written by: Adam Funk, Assistant Vice President at Royal United Mortgage LLC