Even though the date for filing a tax return is past, many people file early because they are in line for a refund. And with the federal government finalizing the economic stimulus refunds, there is another check on the way starting this month for more than 130 million households. Why not consider using your tax refund from the IRS along with the stimulus money as the down payment on a new home? If you add those two together you could have a large chunk of money. it can give a lot of people entry into the housing market.
In the IRS’s filing update of March 1, the average return to that point totaled $2,637 as compared to $2,578 over the same week in 2007. That is an estimated increase of 2.3 percent. And as of the same date, the IRS direct deposited 37.8 million refunds, as compared to 35.7 last year.
More people are getting more money back quickly. Adding to the excitement this year is the economic stimulus package signed into law last month. According to the IRS, to receive a payment, taxpayers must have only a valid Social Security number, at least $3,000 of income and file a federal tax return. If you’ve already filed your 2007 return, you need to do nothing more. the IRS said the money will be direct deposited for those who chose that option for their refund or mailed beginning in May.
Eligible single people will receive up to $600, married couples with get $1,200, and parents will receive an additional $300 for each eligible child younger than 17. there are other details on the stimulus package and payments, including a question and answer section available at the IRS website, www.irs.gov.
A Money Management International survey indicated only one third of people receiving a refund plan to save it, while almost half plan to use to to pay obligations like debts or car repairs. About 10 percent will take a vacation with the springtime windfall. Nearly half of those surveyed say they will put the money toward a major purchase such as a new car or a house.
Many first-time homebuyer mortgage programs offer borrowers a chance to purchase a home with as little as three percent down, while others available in today’s market require no down payment at all. With mortgage rates still low, and housing prices attractive her in the Tri-Cities, now could be the perfect time to use that refund and extra payment as a down payment on a home. This money is supposed to be used to stimulate the economy and why not use the money for a home, an investment that will grow in value and give you some return?
If you already own a home, one of the most prudent ways to spend the “extra money” might be using the cash to refinance your mortgage. Rates remain low, so if you’ve been looking at refinancing, your refund offers a piece of change to put toward closing costs. Another suggestion is to put that money toward your mortgage payment. Extra principal payments along the way, can cut down the length of the loan.