If you are planning to buy a home this year, saving for a down payment is one of the most important steps in the process. One of the best ways to start your savings is by starting with the help of your tax refund.
Using data from the Internal Revenue Service (IRS), it is estimated that Americans can expect an average repayment of $ 2,925 while recording its taxes this year. The map below shows the average prepaid tax refund by state:Thanks to programs of the Federal Housing Agency, Freddie Mac, and Fannie Mae, many first-time buyers can buy a home with only 3% less. In addition, Veterans Affairs Loans allow many veterans put 0% down. You may have heard the common myth that you need to decrease 20% when you buy a home, but fortunately for most home buyers. 20% down payment actually not necessary. It is important to work with your real estate professional and your lender to understand all of your options.
How can your tax refund help?
If you are a first-time buyer, your tax refund may cover more than a down payment than you realize.
If you consider the average selling price by state, the map below shows the 3% down payment percentage covered by the average pre-tax refund:The darker the blue, the closer your tax repayment to homeownership is when you qualify for one of the low down payment programs. Maybe this is the year to plan ahead and put your tax refund on the down payment at home.
Isn’t that enough money from your tax return?
Recent paper the la National Office of Economic Research found that of the households that received stimulus control last year, “A third report said they mainly saved the incentive money.” If you had the chance to save yours Economic Impact Payments, you might consider putting that money to your down payment or closing costs also. Your trusted real estate professional can also advise you on the prepaid assistance programs available in your area.
Saving for a down payment can seem like a daunting task, but it doesn’t have to be. This year your tax refund and your incentive savings could multiply when it comes to achieving your homeownership goals.
Content previously posted in Keep Current Things