Can your tax refund help you become a homeowner this year?

If you’re planning to buy a home this year, saving for a down payment is one of the most important steps in the process. One of the best ways to jumpstart your savings is by starting with the help of your tax refund.

According to The Internal Revenue Service (IRS), it’s estimated that Americans can expect an average refund of $2,925 when filing their taxes this year. The map below shows the average anticipated tax refund by state:

Did you know…. Programs from the Federal Housing Authority, such as Freddie Mac, and Fannie Mae, many first-time buyers can purchase a home with as little as 3% down.

In addition, Veterans Affairs Loans allow many veterans to put 0% down.

You may have heard the common myth that you need to put 20% down when you buy a home, but thankfully for most homebuyers, a 20% down payment isn’t actually required. It’s important to work with your lender to understand all of your options.

How can your tax refund help?

If you’re a first-time buyer, your tax refund may cover more of a down payment than you realize.

If you take into account the median home sale price by state, the map below shows the percentage of a 3% down payment that’s covered by the average anticipated tax refund:

In Iowa - 56% of people can afford a 3% down payment with their tax refund.

Maybe this is the year to plan ahead and put your tax refund toward the down payment on a home.

Bottom Line

Saving for a down payment can seem like a daunting task, but it doesn’t have to be. This year, your tax refund and your stimulus savings could add up big when it comes to reaching your homeownership goals.