It’s the season to start planning on how to use your tax refunds! With all that cash you are getting back, what are you going to get to do with it? We have a few suggestions.
Saving your tax refunds for a down payment might be a wise idea. Depending on the mortgage program you qualify for, there are certain down payment requirements. There is the long-believed myth of needing 20% of the purchase price, which is just not true anymore. This amount of a down payment would remove the required premium mortgage insurance that eventually falls off loans once they reach a certain point.
There might be some extra costs associated with your loans such as home inspections, appraisals, and closing costs. You may not want to pull this money out of pocket or from your savings during the loan process. That money can be used for those necessary large purchases down the road such as buying furniture. Using your tax refunds to cover these costs is a good idea.
Have you been watching a lot of home improvement shows and have some new projects in mind? Those new countertops will need some funding and you can use your tax refunds for that! Renovating your home will increase the value of your home and your comfort level in it.
Paying Off Loans
If you have accumulated credit-card debt or student loans, it may take a toll on your credit score. Using your refunds and making payments towards these balances can help you have more financial freedom.
You can also use your tax refunds towards making one additional payment on the principal balance each year known as a 13th payment. Making this extra payment on a traditional 30-year mortgage can result in the loan being completely paid off in 25 years and 11 months! This would save you four years of payments and interest.
Contact Us Today!
JTS & Co. Mortgage Professionals offer free consultations to talk about your goals and set a plan for your homebuying journey. Stop into our office or call us today to speak to one of our licensed mortgage professionals.