Looking to save for a home? Your tax refund could make a difference!

You’ve dedicated time to saving and envisioning the day when you'll hold the keys to your very own place. However, you might not be aware that your tax return could provide a boost to help you reach that goal sooner. As Freddie Mac notes:

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

So, if you’re getting a tax refund this year, you can use it to help you pay for some of the upfront costs that come with buying a home, like the down payment and closing costs. And here’s the best part.

On average, people are receiving even larger refunds than they did last year. While the increase is not significant, the visual below uses data from the Internal Revenue Service (IRS) to demonstrate that the average individual’s refund is 3.9% higher this year:

Certainly, the amount of money you receive in your tax refund can differ. However, when purchasing a home, any additional funds can facilitate the process. Here are some ways to effectively utilize that money, according to Freddie Mac:

• Save for a down payment – Saving for a down payment can be a significant challenge for many buyers. By setting aside your tax refund for this goal, you can make progress more quickly! And don't worry- putting down 20% isn't usually necessary.
• Pay for closing costs—Closing costs cover important fees, like the appraisal, title insurance, and loan underwriting. Usually, these costs range from 2% to 5% of the total home purchase price. By applying your refund toward these expenses, you can make your closing day a lot easier to handle!
• Lower your mortgage rate – If you talk to your lender, you might find an option to buy down your mortgage rate! If you qualify, you could pay a little upfront to enjoy a lower rate on your mortgage. Considering how tight budgets can be with today’s rates and home prices, this could be a great opportunity to explore!

You don’t have to navigate this journey by yourself! Collaborating with a wonderful team of trusted real estate professionals who truly understand the home-buying process can make all the difference. They'll help you identify what you need to save and show you valuable resources to ensure you’re fully prepared to buy when the time is right.