The average American will receive a $2,897 tax refund this year. If you’re buying or selling a home this year, there are many ways to put that money to good use. For buyers, that might include things like a down payment and closing costs. And for sellers, it could cover maintenance to spruce up your house before you list it or cover some professional spring cleaning. Here are 7 ways to use your tax refund for homeownership.
Home Buyer
Increase Down Payment Fund
A down payment is the money you give to the home sellers upfront. Keep in mind, that putting down 20% of the home’s purchase price will help you avoid PMI or primary mortgage insurance. So, if you haven’t started saving for your down payment, let your tax refund kick off the process. And if you have a fund already, the money you get back could put you closer to your goal.
Home Inspections
Your home inspection can save you a lot of headaches down the road by helping you determine the condition of the house. As a buyer, you’ll typically be responsible for paying for your inspection, and it’s definitely worth the investment. According to HomeAdvisor, the average home inspection costs around $315 for condos and smaller homes. While it could cost more than $400 for larger homes.
Closing Costs
Closing costs are additional expenses you’ll need to pay once it’s time to close. They average anywhere between 2-5% of the purchase price of your home.
Savings for Home Maintenance
Owning a home is a huge accomplishment, but the costs of ownership don’t stop at the purchase. You’ll have a good idea of what is coming down the maintenance pipeline after your home inspection. However, there are just some things you can’t prepare for. Having a savings account dedicated to these unexpected costs will help better equip you for the unexpected.
Home Owner
Make Small Upgrades
Small projects and upgrades can help boost curb appeal to help your home stand out. Upgrades in finishes like knobs, paint colors and appliances can completely change the feel of a space. Using your tax return to invest in these finishing touches will show a desirable home that’s been well cared for.
Making Repairs
Sometimes repairs are relatively DIY-friendly, but once in a while you’ll need to bring in an expert. If there’s anything in your house that needs to be fixed professionally, using your tax return is a great way to put that money to work.
Buying Your Next Home
Whether you’re selling to move up or downsize, you can use your tax refund to help pay for any costs on the purchase of your next home. Financing a new home, whether it’s a primary or secondary home, is an investment that can be incredibly lucrative.
Funding your home purchase or sale can feel like a daunting task, but it doesn’t have to be. There are many ways to use your tax refund for homeownership and help set you up for financial freedom. Connect with the Ultimate Lending Team today to discuss how you can start on your journey.