Using Your Tax Return

It’s a commonly held fact that buying a home is no inexpensive endeavor. From earnest money to inspections and closing costs, the amount of money needed to purchase a home sometimes calls for deep pockets. Even the most diligent savers could use a boost every now and again, which is exactly when tax season could come in handy. Here’s how your tax return could help you pay down some of the costs associated with home buying. 

According to SmartAsset, the average American receives $1,798 in tax returns, though the average North Carolinian’s return is just shy of that at $1,621. No matter what your return is, it can likely help in a number of ways!

Down Payment

Obviously an average return like the ones shared above won’t be enough to cover an entire down payment (at least not on a home with a current average median home price of $428,700) but it can still make a dent in that number. Throwing it into a high yield savings account could help you reach your down payment goals faster. 

Closing Costs

There are other fees associated with buying a home. Perhaps you negotiated for the seller to cover closing costs but if not, you could consider using your tax return to help with paying fees to your lender, commission for your real estate agent, or any other necessary costs. 

Interest Rates

These heightened interest rates have some buyers balking at their projected monthly mortgage cost. Did you know that you can actually buy down your interest rate, saving you potentially thousands over the life of your loan? It’s true! Ask your lender how to pay up front to have a lower interest rate on your fixed-rate mortgage. You may decide it’s worth it in the long run!