Your Tax Refund Can Get You One Step Closer to Homeownership

Saving money each month toward a long-term goal is increasingly difficult for most people who want to buy a home. Even committed savers can get thrown off track when unexpected problems or opportunities arise. It can be difficult to envision how $200 a month can add up to a new home; the dream of homeownership continues to get pushed back in favor of more immediate needs.

For many potential homebuyers, their tax refund can be a big step forward in their saving goals. Received in a lump sum, a tax refund is easier to see as a meaningful dollar amount. The average IRS refund in 2019 was almost $3,000. This, added to an already growing savings account, can be a great bonus. And thanks to the tax deadline being extended to July 2020, you still have time to file your taxes without penalty.

In addition to adding to your down payment fund, a tax refund can also be used to increase your credit score. Debt accumulation and use is the largest factor in determining a borrower’s credit score (FICO). A low FICO score can result in thousands of extra dollars in interest and origination fees when getting a home loan. Working with a lender, strategically reducing the debt ratio can add borrowing power to a potential buyer; lowering the cost of the loan and allowing more of the monthly payment to go toward the home itself instead of interest.

If you have been wanting to buy a home, now is still a good time. And I would be glad to help! Contact me.