Real estate investments can be wise use of tax return
This week’s column was written by Cam Kuhn, director of communications for the Arkansas Realtors Association.
After sending in the paperwork for a tax refund, you may anxiously await the day it hits your bank account so you can spoil yourself because you deserve it.
In today’s consumer-driven world, there are a plethora of options on what one can use their refund. But maybe, just maybe, you could invest in something extra smart — like real estate.
With the interest rates floating on low amounts and the market consistently growing, now may be the time you make a move to position yourself in a better, stronger housing market.
Here are some tips on how to use your tax refund to make your dream home a reality.
SAVE FOR A DOWN PAYMENT
With more options than ever at getting a low down payment and down-payment assistance from some local and state programs, your IRS refund can easily be the amount you need to put down and get into your dream home. The misconception that you have to have 20 percent down is no longer applicable in 2020.
PAY FOR CLOSING COSTS
Another way to use your refund wisely is to apply that money to your closing costs. It’s not uncommon for some costs to come up toward the end of a home purchase. Use the refund to remove questions about how you will pay for closing costs on a home.
LOWER YOUR INTEREST RATE
By using your IRS refund to pay off creditcard and other debt, you can fix your incometo-debt ratio, which may help lower your interest rate when purchasing a home. This will also remove some monthly bills in your budget, allowing more money to be allocated toward your mortgage payment. A lower interest rate and higher mortgage payment could be a great way to start off on the purchase of a new home.
Using your IRS refund wisely can set you up for a very successful and prosperous financial future. A licensed Realtor can provide even more tips on how you can best invest your money.
" Now may be the time you make a move to position yourself in a better, stronger housing market.” — Cam Kuhn, Arkansas Realtors Association