{"id":676,"date":"2022-02-25T17:36:58","date_gmt":"2022-02-25T22:36:58","guid":{"rendered":"https:\/\/volunteerhomemortgage.com\/?p=676"},"modified":"2022-02-25T17:38:44","modified_gmt":"2022-02-25T22:38:44","slug":"5-ways-to-use-your-tax-refund-to-buy-a-house","status":"publish","type":"post","link":"https:\/\/volunteerhomemortgage.com\/5-ways-to-use-your-tax-refund-to-buy-a-house\/","title":{"rendered":"5 Ways to Use Your Tax Refund to Buy a House"},"content":{"rendered":"\n[et_pb_section fb_built=”1″ theme_builder_area=”post_content” _builder_version=”4.14.8″ _module_preset=”default”][et_pb_row _builder_version=”4.14.8″ _module_preset=”default” theme_builder_area=”post_content”][et_pb_column _builder_version=”4.14.8″ _module_preset=”default” type=”4_4″ theme_builder_area=”post_content”][et_pb_text _builder_version=”4.14.8″ _module_preset=”default” theme_builder_area=”post_content” hover_enabled=”0″ sticky_enabled=”0″]

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Have you thought about how you\u2019ll use your tax refund? If you\u2019re like most Americans, you want to be strategic with these extra funds. <\/span>A study found<\/span><\/a> that about half of consumers put their refunds in savings, and about a third pay down debt.\u00a0<\/span><\/p>\n

Those are great moves for future home buyers. But they aren\u2019t your only options. Today, we want to share five ways you can use your tax refund to buy a house \u2014 and how even your savings can be strategic! Let\u2019s get started!<\/span><\/b><\/p>\n

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1. Put Your Refund Toward Your Down Payment<\/h2>\n

Every bit counts when you\u2019re saving for a down payment. Contrary to popular belief, lenders don\u2019t require you to have a full 20% down payment. However, they may have you pay for private mortgage insurance (PMI) if you can\u2019t meet that threshold. PMI is a monthly payment you make, on top of your house payment, to insure the lender until you\u2019ve paid off 20% of the house. So, the sooner you get to 20%, the better \u2014 and your refund can give you a big boost.<\/span><\/p>\n

The <\/span>average tax refund is about $2,827<\/span><\/a>. Normally, it might take you months to save that amount. (In a sense, of course, it has! It\u2019s simply all the taxes you\u2019ve overpaid for a year.) But now you get it all in one big chunk. So, consider putting it toward your biggest expense. Not only will you reach your goal faster, but your rapid progress will encourage you to keep going!<\/span><\/b><\/p>\n

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2. Pay of Debt to Qualify for a Better Loan<\/h2>\n

We mentioned paying off debt earlier. But why is that strategic for homebuyers?\u00a0 It\u2019s not just about having one less bill each month (though that certainly does help!). It\u2019s also about your credit score.<\/span><\/p>\n

Did you know that about <\/span>30% of your credit score<\/span><\/a> is determined by your level of debt? Taking out some debt is good \u2014 if you make your payments on time and show that you can handle it. However, a high credit card balance or late payments can greatly damage your score. If you\u2019ve struggled with either of those things, consider putting your tax refund toward your debts. By lowering your debt balance, you can show lenders you\u2019re serious about your debts and raise your credit score.<\/span><\/b><\/p>\n

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3. Save it to Remodel a Lower-Budget House<\/h2>\n

According to a <\/span>2019 Homelight survey<\/span><\/a>, if you spend $2,803 painting the exterior of your house, its worth will increase by $4,228. New wood floors similarly showed a 51% return on investment when you sell. Why are we telling you this? You\u2019re looking to buy, not sell!<\/span><\/p>\n

Here\u2019s the thing: You need to understand <\/span>why<\/span><\/i> your house costs what it does. Often, you\u2019re paying a premium for simple renovations you could do yourself for a lot less money. This isn\u2019t true for every renovation. It\u2019s important to do your homework. But if you\u2019re willing to put in some extra work, you can buy a lower-budget house and still make it the cutest house on the block. If you\u2019re up for the challenge, save your tax refund, and you\u2019ll be ready to renovate when the time comes!<\/span><\/b><\/p>\n

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4. Save Your Refund for Unexpected Expenses<\/h2>\n

At Volunteer Home Mortgage, we try to educate you so you face minimal surprises. Still, the homebuying experience can be unpredictable, and it\u2019s good to have some reserves.\u00a0<\/span><\/p>\n

An inspection might reveal problems too big for you to move forward. You\u2019ll still have to pay for that inspection, plus the inspection for the house you ultimately buy. You and the seller may agree to split the cost for repairs that have to be done before the appraisal. In a competitive market, you may pay your closing costs. Whatever the surprise, having your tax refund on hand can keep you moving forward.<\/span><\/b><\/p>\n

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5. Purchase a Home Warranty<\/h2>\n

A home warranty is pretty much what it sounds like. It covers a variety of things in your house, from your HVAC system to your refrigerator. If those things break within your first year of owning the house, the home warranty helps pay for repairs or replacements. The home warranty itself usually costs around $500 to $700, but it can save you thousands of dollars.<\/span><\/p>\n

This is an item that the seller traditionally pays for. But in today\u2019s competitive market, you may need to pay for it yourself. Talk with your realtor about this before negotiations. If the seller won\u2019t pay for it, your tax refund should be able to cover the expense.<\/span><\/p>\n

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Curious About Home-Buying Expenses?<\/h2>\n

When you\u2019re buying your first home, the process can feel a bit overwhelming. At Volunteer Home Mortgage, we can show you what to expect and walk with you through the surprises.\u00a0<\/span><\/p>\n

<\/span>Give us a call or email us<\/span><\/a>! One of our experts can answer your questions and guide you through the process!<\/span><\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n","protected":false},"excerpt":{"rendered":"

\u00a0\u00a0\u00a0\u00a0 Have you thought about how you\u2019ll use your tax refund? If you\u2019re like most Americans, you want to be strategic with these extra funds. A study found that about half of consumers put their refunds in savings, and about a third pay down debt.\u00a0 Those are great moves for future home buyers. But they […]<\/p>\n","protected":false},"author":2,"featured_media":677,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"2880","footnotes":""},"categories":[10],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/posts\/676"}],"collection":[{"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/comments?post=676"}],"version-history":[{"count":5,"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/posts\/676\/revisions"}],"predecessor-version":[{"id":691,"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/posts\/676\/revisions\/691"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/media\/677"}],"wp:attachment":[{"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/media?parent=676"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/categories?post=676"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/volunteerhomemortgage.com\/wp-json\/wp\/v2\/tags?post=676"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}