It’s common knowledge that if you’re planning on buying a home, saving for a down payment is one of the most important steps in the process.
How do you start? Well, one of the best ways to start your savings is with the help of your tax refund.
According to the Internal Revenue Service (IRS), Americans can expect an average refund of $2,925 when filing their taxes this year. This number varies by state.
You may have heard the common myth that you need to put 20% down when you buy a home, but thankfully for most homebuyers, a 20% down payment isn’t actually required. It’s important to work with your real estate professional and your lender to understand all of your options. In addition to that, thanks to programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae, many first-time buyers can purchase a home with as little as 3% down.
Veterans Affairs Loans also allow many veterans to put 0% down. It’s important to work with your real estate professional and your lender to understand all of your options.
Your Tax Refund and Stimulus Savings
If you’re a first-time buyer, your tax refund may cover more of a down payment than you realize if you take into account the average median home sale price. Maybe this is the year to plan ahead and put your tax refund toward the down payment on a home.
If you had the opportunity to save your Economic Impact Payments, you may consider putting that money toward your down payment or closing costs as well. One of our trusted real estate professionals can also advise you on the down payment assistance programs available in your area.
Saving for a down payment can seem like a difficult task, but it does not have to be. Thankfully, this year, your tax refund and your stimulus savings could add up when it comes to reaching your homeownership goals.