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.

Dated: April 5 2021

Views: 497

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

Dana Stoloff

Dana Stoloff made a career out of helping people navigate decisions. He wants everyone to have a positive experience when buying or selling a home, and his greatest goal is to help others move forward....

Latest Blog Posts

Most experts are calling for home prices to continue appreciating over the next several years.

82,338 Great Reasons to Buy a Home TodayThe financial benefits of buying a home as compared to renting one are always up for debate. However, one element of the equation is often ignored – the

Read More

About $150 million has been awarded to communities through the Florida Department of Economic Opportunity’s (DEO) Rebuild Florida Mitigation General Infrastructure Program.

Fla. Releases $150M for 20 Infrastructure Projects in 15 CountiesBy Kerry SmithGov. DeSantis says the money from HUD will go to large-scale infrastructure projects that can make Fla. communities

Read More

According to The National Association of Home Builders, some households are focusing their efforts on buying a vacation home rather than staying in a hotel.

Why This Is a Great Year to Sell Your Vacation HomeAs vaccines are administered and travel resumes, many of us are beginning to plan for those long-awaited vacations we missed out on over the past

Read More

Given market conditions right now, April is the best month to sell a home - more buyer interest, less competition, higher list prices and faster sales.

This May Be the Best Month Ever to Sell a HomeBy Kerry SmithStudy: April is the best month to sell a home – more buyer interest, less competition, higher list prices and faster sales –

Read More