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1110 Tuscarawas Avenue NW, New Philadelphia, Ohio 44663

Are you getting a tax refund? Think about using it as a down payment.

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As the April 15th deadline to file your taxes quickly approaches, many people dread their interactions with the “tax man.” Others, however, look forward to their tax refund more than Christmas.

It doesn’t matter whether your refund is a few hundred dollars or several thousand–getting a nice, big check from the government can feel great, and depositing it into a special fund set aside for a down payment for a new home can go a long ways toward realizing the dream of homeownership. The more money you put down, the stronger your negotiating position, the lower your payments and the less you end up paying overall.

How Much Can You Expect, and How Much Do You Need?

According to the IRS, the average tax return is actually up about 2% compared to last year, with the average filer receiving almost $3,000 in their refund check. That amount of money can really put a dent in the down payment required on a new house, particularly if you’re taking advantage of an FHA-insured loan that requires just 3.5% down on a home purchase.

With the average home price in Tuscarawas County being around $130,000, that would mean a required down payment on an FHA-insured loan would be $4,550, which is a big chunk of change for the average family. But setting aside a tax refund of $3,000 takes out much of the sting of saving up that kind of money.

Of course, putting down 10% or 20% on a new house can increase your negotiating power and possibly eliminate the cost of mortgage insurance. Even with those amounts, using “found money,” such as your tax rebate, can help your family jump start the savings they need to move into that new home.

Is a Tax Refund Actually a Good Thing?

While getting a big check always feels great, the truth is that you’ve actually made the government an interest-free loan. While that’s very kind, from a personal perspective, that money could be better used by lowering your withholdings and putting the money in an interest-bearing savings account.

Need personal Advice?

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Whether or not you’re expecting a large tax refund, getting everything in order to purchase your first home, or even to upgrade your existing home, can be a confusing process. At McInturf Realty, we have highly trained agents that can get you on the right track to buying your dream home. Give us a call at 330-364-6648 for a no pressure, no commitment look at where you want to go and how best to get there. We can help.

 

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1110 Tuscarawas Avenue NW

New Philadelphia, Ohio 44663

Phone: (330) 364-6648

Fax: (330) 364-2355

email: makethecall@mcinturfrealty.net