How Tax Refunds Can Be Used for a Home

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:

For Homebuyers:

  1. 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.
  2. 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.
  3. 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.

For Homeowners:

  1. 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.
  2. 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.
  3. 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.

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