{"id":2971,"date":"2016-02-10T16:17:22","date_gmt":"2016-02-10T16:17:22","guid":{"rendered":"http:\/\/teammovemortgage.com\/?p=2971"},"modified":"2020-07-13T22:33:29","modified_gmt":"2020-07-13T22:33:29","slug":"tax-refund-home-purchase","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/tax-refund-home-purchase\/","title":{"rendered":"Tax Refund Used as a Down Payment to Buy a Home"},"content":{"rendered":"

\"Use<\/h1>\n

During tax season,\u00a0refunds help so many become homeowners!<\/h2>\n

Down payment is one of the biggest obstacles for prospective first time buyers to\u00a0purchase a home.\u00a0\u00a0But\u00a0during tax season,\u00a0many tax payers have more funds than any other time of year.\u00a0 So there is no better time to qualify for a new home!\u00a0 Quite often a tax refund may actually\u00a0cover the whole down payment on a home purchase.\u00a0\u00a0Additionally there are several programs that do not even require a down payment.\u00a0\u00a0Even though down payment may not\u00a0be required,\u00a0assets\u00a0help the strength of the borrower.\u00a0 Furthermore,\u00a0tax refunds may be used as assets or down payment right away.<\/p>\n

If I Use a No Money Down Home Loan to Buy, Can I Spend My Tax Refund?<\/h2>\n

The quick answer is NO!<\/strong>\u00a0 At least that would be the answer for right now.\u00a0 Even if a buyer is using a 100% financing mortgage product like USDA<\/strong><\/span><\/a> or VA.<\/strong><\/span><\/a>\u00a0 There are several reasons NOT to spend that tax refund.\u00a0 Here are several reasons.<\/p>\n

    \n
  1. Use the tax refund to pay closing costs\"Use<\/li>\n
  2. Pay off debts to help qualify (talk to us before paying off a debt or collection!)<\/li>\n
  3. Keep the refund in the bank as reserves.\u00a0\u00a0More reserves equals better chance of approval<\/li>\n
  4. Pay down credit card balances to raise credit scores<\/li>\n
  5. Have money for furniture, curtains, or an emergency\u00a0fund as a homeowner<\/li>\n<\/ol>\n

    Can I Apply Now for a Mortgage Even Though I Do Not Have my Refund Yet?<\/h2>\n

    It is perfectly fine to apply for a mortgage loan when you don’t have your refund yet.\u00a0 At application we can just assume the amount that you will be receiving.\u00a0 As long as we can prove receipt of the funds in your account prior to the\u00a0final underwriting approval.<\/p>\n

    Warning!\u00a0 Don’t Do This With Your Tax Refund!<\/h2>\n

    Too often we see borrowers receive a tax refund and then just cash the check.\u00a0 Others will\u00a0immediately withdraw the funds\"How from their account.\u00a0Converting the refund into cash causes problems on a purchase.\u00a0 Also if the cash is deposited later,\u00a0proving\u00a0the source is very difficult.\u00a0 So it is best to deposit the refund and keep it there.\u00a0 At least keep the funds in the bank account while waiting for correct advice from a mortgage professional.<\/p>\n

    Most importantly,\u00a0talk with one of our professionals before spending or withdrawing the tax refund.\u00a0 Each borrower’s scenario is different.\u00a0\u00a0Sometimes it is more important to pay off a debt to qualify.\u00a0\u00a0Conversely, others\u00a0may benefit by\u00a0having a down payment.<\/p>\n

    No down payment loans such as USDA or VA are great options.\u00a0 Believe it or not,\u00a0these loan payments may even be lower per month than loans which require a down payment.\u00a0 So we will review these potential options as well for you.<\/p>\n

    In summary,\u00a0let’s make sure\u00a0you know all of your options before spending\u00a0your tax refund.\u00a0\u00a0You many not even have to spend it at\u00a0all!<\/p>\n

    Mortgage Products Available for First Time Buyers Offering Low to No Down Payment<\/h2>\n
      \n
    1. USDA<\/strong><\/span><\/a> – No down payment required<\/li>\n
    2. VA<\/strong><\/span><\/a> – Usually no down payment required.\u00a0 Depends on entitlement amount, purchase price, and county limit<\/li>\n
    3. FHA<\/strong> <\/span><\/a>– 3.5% down payment<\/li>\n
    4. Down Payment Assistance.<\/strong><\/span><\/a>\u00a0 Use to offset down payment or closing costs<\/li>\n
    5. Conventional – 3% or more down payment<\/li>\n
    6. AND first time buyers can even get up to an additional $2000 tax credit<\/strong><\/span> <\/a>each year!<\/li>\n<\/ol>\n

      With a tax refund,\u00a0is there a\u00a0better time to buy?\u00a0 This is a great opportunity – low rates, stable job market, and affordable homes.\u00a0 Why not buy a home now?<\/strong><\/p>\n

      [av_button_big label=’Contact Us to Buy Your New Home Now!’ description_pos=’below’ link=’manually,http:\/\/teammovemortgage.com\/contact-us\/’ link_target=’_blank’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ custom_font=’#ffffff’ color=’theme-color’ custom_bg=’#444444′ color_hover=’theme-color-subtle’ custom_bg_hover=’#444444′][\/av_button_big]<\/p>\n

       <\/p>\n

      \"use<\/p>\n

       <\/p>\n

       <\/p>\n","protected":false},"excerpt":{"rendered":"

      During tax season,\u00a0refunds help so many become homeowners! Down payment is one of the biggest obstacles for prospective first time buyers to\u00a0purchase a home.\u00a0\u00a0But\u00a0during tax season,\u00a0many tax payers have more funds than any other time of year.\u00a0 So there is no better time to qualify for a new home!\u00a0 Quite often a tax refund may […]<\/p>\n","protected":false},"author":2,"featured_media":2956,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5,24,33,17,288,40,41,48],"tags":[7,25,27,9,633,11,634,635],"class_list":["post-2971","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-1st-time-buyers","category-fha","category-frequently-asked-questions","category-products","category-real-estate-professionals","category-tips","category-usda","category-va-loans","tag-down-payment-source","tag-fha","tag-fha-home-loans","tag-first-time-buyers","tag-income-tax-refunds","tag-low-down-payment","tag-tax-refunds","tag-tax-season"],"acf":[],"yoast_head":"\nTax Refund Can be Used as Down Payment\u00a0to Buy a First Home<\/title>\n<meta name=\"description\" content=\"Tax Refund can be used as a down payment to purchase a first home or use the refund to better qualify for a mortgage 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