Whether you already own a home or have your eyes set on one, your tax refund can be a big help.
For buyers, it can mean a bigger down payment or help on closing costs and moving expenses. For those who already own a home, it means an extra mortgage payment or a refinance of your current loan.
Are you expecting a decent tax refund this year? Here’s how you could spend it, depending on where you are in your journey:
- Put money toward your down payment. Your tax refund can give you a pretty big leg up in your down payment savings, which should increase your equity and decrease your home loan.
- Use it toward closing costs. Put a dent in your closing costs. They typically amount to anywhere from 2% to 5% of your home’s purchase price.
- Pay for your moving expenses. Boxes, tape, bubble wrap and other supplies add up — and that’s before you hire movers or rent a vehicle.
- Whittle down your mortgage. Consider making an extra mortgage payment. It can reduce your balance, help you pay off the loan faster and you’ll save on interest.
- Pay for a refinance. With mortgage rates so low, you could also consider refinancing your loan. Use the refund to cover closing costs, including the appraisal.
- Add value to your home. You could also use the funds to renovate your home. Just make sure you choose projects that will add value.
Are you thinking of buying a new place? Need guidance on your home upgrades? Get in touch.