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    Got your tax return? Lets buy a house with it!

    Welcome to tax season 2021. 

    As many fathers (like my own) has said for generations – “there’s only 2 things guaranteed in this life: Death and Taxes.” So uplifting Dad, glad that one stuck with me. 

    From that fun statement we can conclude that taxes are not everyones favorite.. but it can be an exciting time of year if you’re expecting a nice tax return! The glories of thee tax return, to spend wisely, or to throw towards fun? How about both? Buying a home is such an exciting part of life, to keep it exciting and as stress-free as possible – using your tax return can help this process.  

    Using your tax return money towards your down payment can be the biggest help. The more you put down, the less you have to borrow towards the down payment. Depending on your credit history & a few other factors, borrowers could make a down payment of only 5% to 10% – not 20%. The more percent down you have though, the better your negotiating power will be. Even if you don’t get back stacks on stacks of cash, your tax return has a good chance covering quite a bit of the down payment. Just a tad short still? Down payment assistance programs are widely available, start looking to see what your state offers. Planning a few years ahead for your home buying dream is a big help too, you have time to squirrel away a few tax return checks  towards a down payment or even just your future home in general – on top of your monthly savings towards everything of course.

    ((Make sure your refund is direct deposit or get a copy of the check you received for home buy purposes. Cashing your tax refund only allows that money as a downpayment if you deposit it into your account within 60 days of closing.))

    Building an emergency fund for your home is extremely important. We never know when something crazy is going to walk our way in life. It is best to be prepared for this moment – especially when it effects the roof over you head (could quite literally!) before you touch that tax return money for anything else, throw some into your emergency savings. With the interest it can build over time too, your future self will thank you if you’re ever staring at your roof on the floor.

    Lots of cost come into play when it comes to buying a home. That being said, there are closing costs that are not negotiable involved at the end of the process. Your tax refund can help soften the blow using it towards costs like: attorney fees, title insurance fees and escrow costs. Good Faith Deposits or Ernest Money Deposits could easily be covered by a tax return depending on the amount. This ranges from 1% to 3% depending on the sale price of the property. Home inspections, home maintenance & repairs, and remodels all could be perfect uses for your tax return towards your new home.

    Really did not need your income taxes to help you out in the home buying process? That’s awesome, I can still find other ways to spend it on your house! Use it to cover your moving costs. Need to rent a truck for down the street or across the country? Thats more money! Setting up the heat or internet in your new place? Money, Honey! Feeding your family and friends that helped you move on their Saturday off? Priceless. 

    Owning a home is one of the safest and simplest ways to build your wealth. The best part of your tax return money, no matter how you decide to use it – its money that was never in your hands to begin with, you won’t miss it when its gone! Your agent is always there for you with any questions you may have, they know your house buying process the best! Your agent can always give you ideas on where your money could be used to the best of its ability in the home buying process.

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    Our agents write often to give you the latest insights on owning a home or property in the Central PA, Northern Maryland area.