The countdown to April 15 – tax day- is approaching, and if you are expecting a tax refund you are probably already mentally spending the cash influx that if on its way. Last year, the average tax refund was roughly $2,700 - according to the IRS.
If you are considering buying a home in 2021 this money could pave your way into a new home. A sizeable refund might be enough to get you an FHA loan which requires a down payment of as little as 3.5%. Home Creations has new homes starting from $185,000 – which means a down payment of at least $6,475 is needed. So, why not use your tax refund for a down payment!
Even better, if you already have some money saved it could be enough to put you over the 20% threshold so that you can avoid paying for private mortgage insurance (PMI). If so, that is a great use of your money because again, you will reap savings over the entire life of your loan.
Those who may not need a down payment, such as people who are eligible for USDA loans, VA loans or have a gift trust from parents, could use their tax refund for fees such as closing costs – or much more fun – upgrades to finishes or interior. Also, at Home Creations, we can help you get all your closing costs paid with our participating lender. So, in some cases, people can move in with as little as $500 for their earnest money deposit.
Purchasing a new home this year could help you save money on your taxes next year. Homeownership comes with a number of tax advantages such as the mortgage interest deduction and property taxes. Homeownership is still rewarded by Uncle Sam. Interest rates are still low, but home prices are rising, so make your move now.
Contact Holly to find your new home today.