I don’t think the word “tax” is anyone’s favorite word, but you know what is? “Refund.” That word, especially when it comes after “tax”, is everyone’s favorite! And how best to spend your tax refund? Unlocking new doors for yourself, of course!
Remember, however, a tax refund isn’t a bonus. It’s your hard-earned money, and you should be wise in how you spend it, especially if you are wanting to put money into Real Estate this year. Take it from me, your tax refund can be hugely beneficial! You can put your tax refund toward the following, and be a wise financial planner in the process:
1. Lower Your Mortgage Rate: Did you know you can pay “points” up front to lower the interest rate of your mortgage? This can be huge in helping you save over the time you live in your house!
2. Pay Closing Costs: Closing costs average about 2% to 5% of the purchase price, and many buyers roll it into their mortgage and pay it off over the life of the loan. But you could use your refund to pay it up front and avoid paying interest on it, thus making “unlocking new doors” that much smoother and easier!
3. Save for a Down Payment: In some cases, your refund could cover your entire down-payment. Yes. I’m not just saying that! Some loans only require 3% down.
4. Boost Your Credit Score: Paying down your debts can have a significant impact on your credit score and the mortgage rate you’ll qualify for. Want to go on that grand vacation? Take my advice and boost your credit score.
5. Renovate or Update Appliances: Many buyers today are remodeling their homes – “fixer-uppers” have never been so popular. They are tempted to open a line of credit to pay for these purchases, but that could negatively impact your mortgage loan. Using your refund is the smarter move.
So, not to depress anyone with talk of taxes, but there is always a light at the end of the tunnel, and please reach out with me with any questions! I would LOVE to walk alongside you in this buying/selling journey, and make unlocking new doors for you, smooth and sweet.