Use Your Tax Refund To Buy a Home
Many people are afraid of tax time, but many others are looking forward to it because they are going to get a refund. But a large number of those who get a refund often spend it on things they’ve wanted all year round in short order. But, especially when you want to buy your first home, there’s a better way. In fact, your tax refund can be your ticket to the new home. So let’s see how to purchase your first home in Denver Colorado using your tax refund.
Use It for the Down Payment
IRS statistics reveal that the average tax refund for 2013 was just over $3,000 in hair–which means a lot more refunds than that. And those several thousand dollars would go a long way towards an down payment in order to buy your first home. If you qualify for a FHA loan, it could even cover the entire 3.5 percent down payment.
But if you can take advantage of your tax refund to pay down the standard 20 percent, you should probably. You won’t have to pay for private mortgage insurance (PMI) with a larger down payment, and you’ll have more leverage to negotiate. You will also get a higher interest rate and lower monthly payments.
Cover Moving Costs
It’s not the end of your expenses what it costs to buy your first home in Denver Colorado . Many people forget to make moving costs a factor, but to cover them you can use your tax refund. Typical cost of movement includes :
- Buying packing materials like boxes and tape
- Renting a storage unit
- Renting a moving truck or van
- Paying the movers
- Paying utility deposits
- Feeding friends and family who volunteer to help
If, like many of us, you neglected to take these expenses into account, You can make sure that your tax refund is covered.
Apply It to Taxes and Insurance
You can also use your tax refund to purchase your first home in Denver Colorado by applying it to heavy (and sometimes heavy) charges such as taxes and insurance. Your property taxes and insurance are often rolled into your mortgage, and you won’t have to worry about paying them in that case. But then, for a bigger safety net, you have the cash to buy extra insurance.
Put It Toward Closing Costs
Closing costs can often be much more than people think, especially when buying your first home. If you encounter any financial surprises when you close, you can reimburse your tax for those unexpected closing costs. Typically, closing costs include:
- Escrow costs
- Title insurance
- Appraisal and inspection fees
- Attorney fees
Keep It for an Emergency Fund
You may not be prepared for all the unexpected expenses that will inevitably arise when you buy your first home in Denver Colorado –mostly for maintenance and repairs. And that’s why you should always have an emergency fund at your disposal. To start building this necessary emergency fund, you can hang on to your tax refund. You simply must have cash on hand for those times when your AC breaks down or you need roof repair after a storm.
Get More Ideas From Your Agent
These are, of course, just some of the ways to purchase your first home in Denver Colorado using your tax refund. Even more ways and ideas can be provided by your local real estate agent. And remember that you may get an even greater tax refund after you buy your first home because you can deduct interest on mortgages and property taxes.