It’s tax season again! I think I’m probably not alone in saying that I have a love/hate relationship with tax season. Filing taxes never seems like a convenient thing to do. However, we know that it comes around every year, so being able to check it off the “to-do” list is definitely satisfying! And the tax refund that comes with it is definitely an added plus, which is what I am here to talk about today!
According to the IRS, the average refund is about $2900. There are so many ways you could invest that money in your current or future home! Here are some of my favorite ideas:
- Put it toward the down payment of a house. If you are in the market to buy a home, set your tax refund aside to go towards your down payment. I have found that homebuyers tend to overestimate the amount of money they will need for their down payment. Down payments are usually about 5-10% of the cost of the home. Your tax refund could be a great start to having your down payment covered!
- Add value to your interior. There are many small upgrades you could make to the interior that would add value to your home in the long run. Think replacing appliances, installing a granite kitchen countertop, reapplying caulk to the molding and baseboards, or upgrading your bathroom vanity.
- Upgrade your curb appeal. Let’s not forget about the exterior! There is a huge range of things you could do to add to your curb appeal. Simply hanging ferns on the front porch and planting a new flower bed can be a great way to start. Or if you are wanting to make a more long-term investment, consider replacing your front door or adding a built-in fire pit in the backyard.
- Lower your interest rate. Naturally, a great way to keep your interest rate as low as possible is to pay as much as possible up front! Every little bit counts, so consider using your tax refund to lower your mortgage rate.
- Use it to cover moving costs. Moving costs and closing costs both have a tendency to add up when you are buying a new home. When you factor in the cost of the home inspection, appraisal fees, renting moving vehicles, and the other unforeseen costs that may arise during a move, setting aside a little extra for the unforeseen costs may be wise.
I personally can’t think of many ways to better spend your tax refund than investing in your home. It is a privilege to assist my clients in unlocking new doors and secure the home of their dreams. Please don’t hesitate to reach out to me if you have questions on any of this – I would love to partner with you as you plan!