The 2016 average Individual Federal Tax Refund, according to the IRS, was around $3050.00. (Note this does not include refunds in categories such as business income taxes, estate and trust income tax, gift tax and employment tax). Of those who expected to receive a refund for 2016, the top plans for spending the refunds were
- Pay off debt (loans, credit cards, etc.)
- Splurge on a purchase (TV, shoes, etc.)
- Put the money toward a vacation
- Put the money in savings
- Make a major purchase (car, home, etc.)
- None of the above
If you’re thinking about buying a new home this year or even feeling it’s time to sell and upgrade you might consider using your Income Tax Refund for downpayment/closing costs associated with mortgage approval and financing (VA funding fees, etc.).
A down payment is cash that you pay up front at settlement (or closing). It tells the lender that you’ve managed to save up some money, and you care enough about the home to put a chunk of your savings toward making it yours!
Just 3.5% is typically the minimum down payment on a mortgage*. Of course, the best way to determine what type of funding you qualify for and how to get the best rate possible is to speak with a qualified lender. I can connect you with one of my trusted lenders if you’d like to explore your options or get more information, just ask!
*Your down payment options are determined by your credit score, location, and mortgage value.