It’s not every day we receive such a large check, so why not make your money work for your future? With the right strategy, you can use your tax refund to help buy your first home.
Fund your mortgage costs
You will likely need cash for a down payment. Some loan programs require a lower down payment, such as 3% upfront. You’ll also need to pay for closing costs which will include things like title insurance, attorney fees and escrow expenses. Saving your tax refund for these costs and fees is an easy way to cover most of the upfront cost, if not all.
Hauling all of your belongings from point A to point B comes with a few costs as well. If you decide to hire professional movers, you can expect to pay a couple hundred dollars or more, depending on the distance. If you go the DIY route, you’ll need to pay for gas, packing boxes, tape and feeding your loved ones as a “thank you” for helping you move. Your tax refund is an easy way to fund your moving expenses after you buy your first home.
Start your emergency fund
An emergency fund is recommended to ensure you can continue to pay your bills, even if an unexpected situation occurs, such as job loss. Financial experts suggest you have around 3-6 months’ worth of living expenses saved for an emergency. Kickstart this necessary fund with your tax refund.
Pay for repairs or updates
A new home is exciting because it’s all yours. However, that means when things break, it’s entirely your responsibility to pay to fix it. While you will have some idea of immediate problems to fix (perhaps you want to update your HVAC system), other costs will appear seemingly out of nowhere, like a leaky roof or an electrical shortage. By saving your tax refund, you can fix necessary repairs or even make a few fun updates. Having some money on hand for necessities as they arise will take the pressure off when repairs pop up.
Work with a trusted lender
You don’t need to stress when buying your first home,. The experts at First Centennial Mortgage have experience helping people just like you while ensuring your home-buying experience is smooth and tailored to fit your unique financial situation.