Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year.
If you’re 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 jumpstart your savings is by starting with the help of your tax refund. Using data from the Internal Revenue Service (IRS), it’s estimated that Americans can expect an average refund of $2,925 when filing their taxes this year.
Thanks to programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae, many first-time homebuyers can purchase a home with as little as 3% down. In addition, Veterans Affairs Loans allow many veterans to put 0% down. 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.
How can your tax refund help?
If you’re a first-time buyer, your tax refund may cover more of a down payment than you realize. Also, a recent paper from the National Bureau of Economic Research found that, of the households that received a stimulus check last year, “One-third report that they primarily saved the stimulus money.” 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. Your trusted real estate professional can also advise you on the down payment 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, stimulus savings, down payment assistance, and understanding how much home you can afford could add up big when it comes to reaching your homeownership goals.
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