As you get closer to buying a home this year, saving for a down payment is a critical step in the process. Putting your tax refund into savings is a great starting point.
Taking data from the Internal Revenue Service (IRS), Americans should expect an average refund of $2,925 when filing their taxes this year. Below you’ll see a map that shows the average anticipated tax refund by state:
With this being said, programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae, allow many first-home buyers to purchase a home with as little as 3% down. Additionally, many veterans don’t have to put down a down payment with VA (Veteran Affairs) Loans. You probably have heard the common myth that you need to put 20% down when you buy a home, but for most homebuyers that isn’t the case.
How can your tax refund help you as a homebuyer?
Are you a first-time buyer? Your tax refund may cover more of a down payment than you realize!
If you put into account the median home sale price by state, the map below shows the percentage of a 3% down payment that’s covered by the average anticipated tax refund:
The darker blue, the closer your tax refund gets you to homeownership when you qualify for one of the many low down payment programs. This might be your year to become a homebuyer. Plan ahead and put your tax refund toward a down payment.
Do you find you didn’t get enough money from your tax return?
The National Bureau of Economic Research found, of the households that received a stimulus check last year, one third report that they primarily saved the stimulus money. If you’re considering buying a home this year, and you were able to save your stimulus checks, you might want to consider putting that money towards your down payment or closing costs.
Saving for a down payment can be a scary task, but it doesn’t have to be with the low-down payment options available to first-time homebuyers. Additionally, your tax refund and your stimulus savings could add up when it comes to reaching your homeownership goals. Contact us today to see if you qualify for a low-down payment option!