It’s getting to be that time of year again when we all have to start thinking about our taxes. It seems like most people dread filing for taxes and figuring out if they owe money. However, homeownership may be one step closer than you think if you spend your tax refund wisely this year.
How Can My Tax Refund Help?
Truthfully, taxpayers get the raw end of the deal when it comes to tax refunds. After all, the government is giving you back your money without any interest payment. Therefore, many tax experts say people should actually be shooting for no tax refund at all. That way, you can invest all of your money and receive interest payments. However, if you know you’re not great at saving money, your refund is a great way to create some forced savings. So when you get it back, you don’t want to waste that “bonus.”
A great use for your tax refund is putting it towards a down payment. This year, in California, the average taxpayer is expected to get $2,805 back. While that may not feel like a lot, it can be a great start towards a down payment. Especially if you plan on using a low or no down payment mortgage program.
If you’d like to learn more about down payment assistance in California, please reach out. We have helped a number of clients buy homes with very little money down. For more information, give us a call at 562.896.2456.
Should You Always Use Your Tax Refund as a Down Payment?
Even if homeownership is one of your future goals, that doesn’t always mean you should use your tax refund towards a down payment. First, make sure you have enough money to pay down your debts and immediate bills. You should also have a few months of an emergency fund saved up. After that, consider setting aside your refund money to start saving for your down payment or set it aside for closing costs.
Keep in mind though, that it’s not just money you need to think about. Below is a video that can help you get financially ready to buy a home.
Next Steps to Homeownership
Saving for a down payment can seem like a daunting task. However, the more you know about what’s required, the more prepared you’ll be to make the best decision for you and your family. This tax season, your tax refund could be your key to homeownership if you just need a financial boost. Or, it can be the start of savings to apply towards homeownership. Either way, you will be one step closer to your goals.
If you’re curious about where you stand in comparison to your homeownership goals, give us a call! We can refer you to a lender who can check on your credit score, your savings, and see how much you qualify for. If you’re not quite ready to buy a home, they can help put you on track and set goals to reach homeownership. We can be reached at 562.896.2456 or you can fill out the form below. We look forward to assisting you!