It's that time of the year, time to do our tax returns. Some of people dread this time of year and others look forward to getting a tax refund from the IRS. If you are thinking about buying a home in 2020, this might be the best time to get your finances in order. Depending on how much money you receive on your tax return, you could use the money towards a down payment on a house.
There are so many things you could spend your refund on, so why on a downpayment on a home?
According to the IRS the average tax return for 2018 was $2,833. No matter how much you receive, you can always put that money on a down payment on a house. How much money you need for a down payment is dependent upon the amount of money you want to barrow and how much you are required to put down. Most mortgage companies require you put down 20%, however there are options with much lower down payment requirements. For example, FHA only requires 3.5% if your credit score is 580 or more.
So if your buying a single family home for $100,000, you will need $20,000 for a down payment. With a credit score of 580 or more, you would need $3,500 for an FHA downpayment. With a $2,833 tax refund, you would need to come up an additional $667 for a down payment.
Housing prices will continue to rise. Home prices have risen almost 5% which means that the longer you wait the higher the price you will have to pay to purchase a home.
The number of homes for sale is low. With low inventory, that means there is more competition for home which drives prices higher.
Buying a home gives you tax duductions when compared to renting. You can deduct your mortgage interest and your property taxes on you income tax.
To learn more about using your tax refund to a buy a house, contact me. We can sit down and determine how to best fit your refund into your overall financing plan.
If you had a home inspection done before or this is your first time, there are a few questions buyers need to familiarize themselves with. Here are some common questions.
The buyer pays for the inspection of their choosing, The inspection report generated during the inspection belongs the the buyer.
The inspector will go through the property and make note of any damages, repairs needed, or maintencance issues, and then give the buyer a copy of the completed report based of those findings. It's important to note that there could be defects a home inpector will not find and wouldn't be expected to find if the defects are in areas with limited or no access.
Your REALTOR® will discuss the termination-option period in your contract to purchase the home. The option period is amount of time during which you can conduct inspections, negotiate with the seller for repairs, and still have the option to terminate the contract.
The inspection can be anywhere from three to five hours, depending on the size of the house.
You don’t have to be at the property during the inspection, but it can help you better understand the process and get to know the property. Ask your inspector if you can be there to observe and ask questions during the inspection.
Buying a home is the largest investment you will ever make, so you want to know as much as you can up front. A home inspector will point out items that need regular maintenance and identify any problems.
Request a free estimate or consultation with today! We'll be happy to help every step of the way.