Tax season is among us which means many of us will hopefully soon see a tax refund showing up in our bank accounts. While many may use that money for a vacation, pay off credit cards or splurge on a shopping spree, there’s another use for that money that is a good investment for your future… buying a home.
If you’re thinking about buying this spring, it’s a great time to start planning now. Inventory will likely increase, giving you more options while mortgage rates are expected to remain steady. There are many things that money received from a tax refund can help you with when you’re looking to buy.
Down payment. The biggest challenge for many Americans when purchasing a property is the down payment. Depending on many factors like your credit history and income, a down payment nowadays is normally between five and 10 percent, down from 20 percent. Using your tax refund as part of your down payment (or all depending on the price of the home) will help bridge the gap of having to fork up a full down payment all at one.
Closing costs. These costs are the sneaky extra dollars that are needed in order to finalize the process of buying a home. Normally, closing costs are between two and five percent. Some lenders allow you to put some of the cost into your original mortgage loan, but normally you should expect to pay these costs out of pocket.
Furnishing your new home. If you’ve got the down payment and closing costs covered, your tax refund can still be extremely useful when it comes to furnishing your new home. Especially for those first-time homebuyers, you’ll need furniture, rugs, curtains, dishware and décor. Using your tax refund to help furnish your home can help you stay away from racking up credit cards or taking out loans.
If you would like more information on mortgage rates, the home buying process or get an estimate of your current property’s value, United Country Real Estate has real estate professionals across the country ready to help. Visit www.UnitedCountry.com to find an office or agent near you.