It is definitely not a surprise to why home buying season really kicks off around early spring or Tax Day. There is no better way to spend your refund check than investing in homeownership and possibly buying the home of your dreams.
There are many ways that, as a buyer, you can use the money you get back from your tax refund like putting more money into your down payment fund, saving for closing costs, paying for your home inspection, etc.
As a seller, you can put more money into increasing your curb appeal or to necessary projects around the home that will help you sell your home and get your money’s worth.
Purchasing A Home
One way that you can use your tax refund to achieve your home buying goals is to pay down some of your debt. Your credit score is a crucial factor that will determine your mortgage interest rate so if you want to try and get the best rate possible for your situation, it would be a good idea to use any extra money to start paying down some of your high-interest credit card debt.
If you are looking to possibly increase the amount of money to put down, think about how much of your tax refund you want to use to do so. The more money you put down, the less your loan will be. Make sure to use a mortgage calculator to estimate your down payment and go from there.
You can also use your tax refund to pay for the home inspection,which is an examination of a real estate property’s condition, or any closing costs. Usually, the potential home buyer will pay for the inspection so it is a good idea to either set aside money to pay for this or use your refund if the timing aligns.
Selling A Home
There are also many ways that you can use your tax refund to help prepare to sell your home. Think of all the repairs or upgrades that are on your list to do before putting your house on the market, instead of setting aside money, use your tax refund to complete some of these items.
Many repairs are inexpensive and are very DIY-friendly but sometimes the materials you need or potential hiring of professionals can get a bit pricey.
Renovating your home can greatly increase the value of the home itself. Depending on what type of renovation you do, it will help make your home that much more desirable to buy and live in.
If you haven’t decided what you are going to do with your refund yet and you are either thinking of buying or selling a home, take the time to think about whether using your refund on necessary steps during the process is a good idea for you.