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Using Your Tax Return as Down Payment on New Home

Posted by admin on January 29, 2014
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It’s tax season again. If you are looking for something constructive to put your return towards, consider using it for a down payment on the home of your dreams. Coming up with the down payment can be an obstacle for renters who want to become homeowners. That’s why during tax season, many first-time homebuyers turn to their tax refunds as a down payment option.

 

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The Amount Doesn’t have to be Large

Borrowers who qualify for a FHA Loan need only 3.5% down. A down payment of 3,500- 5,000 isn’t as hard to manage when you consider that the average tax return is between 2 and 4 thousand dollars. Even if the tax return doesn’t cover the entire down payment, it can help with a large portion of it. And you can be on your way towards a beautiful 100-125 thousand dollar home. Even better, if you already have some money saved your tax return could be enough to put you over the 20% threshold so that you can avoid paying for private mortgage insurance (PMI). If so, you’ll save over the entire life of your loan.

In the Augusta Metro Area there are plenty of homes in the 100,000- 125,000 range. Consider these two homes at Southampton in Hephzibah, GA: spacious, amenity-rich and affordable. The down payment for these homes could be met with the money you are expecting from your return.

Using your Tax Return for your Down Payment

Listing Price: $109,900

Address: 2814 Wyndham Drive

Hephzibah, Georgia 30815

Bedrooms: 3 Full Baths: 2

Square Feet: 1237

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Listing Price: $116,500

Address: 2812 Wyndham Drive

Hephzibah, Georgia 30815

Bedrooms: 4 Full Baths: 2

Square Feet: 1407

Make Certain You are Financially Ready

Using your tax return towards a down payment is a wise decision that can make financial sense for many home buyers, but it is not for everyone.  With mortgage rates low, borrowers can buy a substantial home that carries a lower monthly mortgage payment than what they pay in rent. However, a decision to buy a house shouldn’t be based on whether it’s a good time to buy, but whether you are ready to buy a home. Before you use your tax return as a down payment think carefully about your financial situation and whether you have any pre-existing debt. In addition to the tax return, it is important have money set aside towards an emergency fund, repairs and closing costs associated with buying a home.

For more information on Prudential Beazley Real Estate and affordable housing options call 706-863-1775 or email infocenter@prubeazleyrealestate.com.

 

 

 

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