Your Tax Return can help you buy a home with only 3% down

Dated: April 5 2021

Views: 78

Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year

Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year | MyKCM

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 jumpstart 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 state:Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year | MyKCMThanks to programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae, many first-time buyers can purchase a home with as little as 3% down. In addition, Veterans Affairs Loans allow many veterans to put 0% down. You may have heard the common myth that you need to put 20% down when you buy a home, but thankfully for most homebuyers, a 20% down payment isn’t actually required. It’s important to work with your real estate professional and your lender to understand all of your options.

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:Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year | MyKCMThe darker the blue, the closer your tax refund gets you to homeownership when you qualify for one of the low down payment programs. Maybe this is the year to plan ahead and put your tax refund toward the down payment on a home.

Not enough money from your tax return? 

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.

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.

Blog author image

Arna Freedman

Looking for a Pro? Someone who will listen, negotiate and get the home you are looking for with the least amount of stress? I have been successfully working for buyers and sellers in Orange County fo....

Latest Blog Posts

Cash Buyers We Buy Homes Cash

Do you want a fast sale, no one walking through your home?                                      

Read More

Why I should Buy nor Rent

<iframe sandbox='allow-scripts' src='https://www.simplifyingthemarket.com/en/videos/embed/237874-cf01eafb21d1efc392d8d17c361b86b7/b947b740' frameborder='0' allowfullscreen width='560' height='&

Read More

How a Buyer can Stay Motivated in a Seller's Market

<iframe sandbox='allow-scripts' src='https://www.simplifyingthemarket.com/en/videos/embed/237874-cf01eafb21d1efc392d8d17c361b86b7/2a86add7' frameborder='0' allowfullscreen width='560' height='&

Read More

Buyer's Can Make A Difference This Way!

Pre-Approval Makes All the Difference When Buying a HomeYou may have been told that it’s important to get pre-approved at the beginning of the homebuying process, but what

Read More