IRS Tax Refund
What to do with your IRS tax refund. If you’re planning to buy a home this year, saving for a down payment is one of the most important steps in the process. One of the best ways to jump-start your savings is by starting with the help of your tax refund.
Using data from the Internal Revenue Service (IRS), it’s estimated that Americans can expect an average refund of $2,925 when filing their taxes this year. The map below shows the average anticipated tax refund by stat
How can your tax refund help?
If you’re a first-time buyer, your tax refund may cover more of a down payment than you realize.
If you take into account the median home sale price by state, the map below shows the percentage of a 3% down payment that’s covered by the average anticipated tax refund:
A recent paper from the National Bureau of Economic Research found that, of the households that received a stimulus check last year, “One third report that they primarily saved the stimulus money.” If you had the opportunity to save your Economic Impact Payments, you may consider putting that money toward your down payment or closing costs as well. Your trusted real estate professional can also advise you on the down payment assistance programs available in your area.
Strock Bottom Line
Saving for a down payment can seem like a daunting task, but it doesn’t have to be. This year, your tax refund and your stimulus savings could add up big when it comes to reaching your homeownership goals.