Are You Saving Up To Buy a Home? Your Tax Refund Can Help

Are You Saving Up To Buy a Home? Your Tax Refund Can Help

You’ve been putting money aside and picturing the day you’ll finally hold the keys to a home that’s all your own. What you might not know is that your tax refund could be the boost you need to get there a bit faster. As Freddie Mac points out:

“ . . . your tax refund from the IRS can be a useful supplement to your homebuying budget.”

If you’re expecting a refund this year, it could help cover some of the upfront expenses involved in buying a home, such as your down payment or closing costs. And the good news?

On average, people are seeing slightly larger refunds compared to last year. It’s not a huge jump, but the visual below—based on data from the Internal Revenue Service (IRS)—shows that the average refund amount has increased by 3.9% this year.

Naturally, your tax refund amount will vary from others. But when you’re preparing to buy a home, every bit of extra money can make a difference. According to Freddie Mac, here are a few smart ways to put that refund to use:

Save for a down payment – One of the biggest challenges for many buyers is saving for a down payment. Applying your tax refund to this expense could help you reach your goal more quickly. And keep in mind, you don’t always need to put 20% down.

Pay for closing costs – These include fees related to things like the appraisal, title insurance, and loan processing. Typically, closing costs range from 2% to 5% of your home’s purchase price. Using your refund to help cover these expenses can ease the financial load on closing day.

Lower your mortgage rate – Some lenders offer the option to buy down your mortgage rate. If this applies to you, paying a little more upfront could secure you a lower monthly payment. If affordability is a concern, this might be something to look into.

And remember, you don’t need to navigate this process alone. Teaming up with knowledgeable real estate professionals can help you understand the steps, figure out what you’ll need to save, and uncover any resources that could support your journey.

Bottom Line

Every dollar saved gets you closer to homeownership. While your tax refund may not cover everything, it could give your savings the extra push it needs.

Thinking about what having your own home could mean for you and your loved ones? Let’s connect and map out a plan to make it happen.