Spring brings beautiful weather, blooming flowers, and best of all — tax season! If you’re expecting or have received a large sum of money from your tax return, this may be a good time to start thinking about the best ways to invest and hold onto your fortune!
Here are some smart ways to invest your return that will benefit you in the long run:
Coming up with a down payment to buy a home is one of the biggest obstacles that interested homebuyers encounter. Whether you’re a first-time homebuyer or just looking to upgrade, tax refunds can be a blessing in disguise! Even if you’ve been saving for a home, you can use your refund to increase your down payment and avoid higher mortgage payments in the future. How much do you really need for a down payment? You can put down as little as $99 down on a new home with qualifying financing — leaving you with a good chunk of change to save for later. For more tips and advice on investing your tax return on a new home, contact our preferred lenders today!
Pay off debt
Be smart about paying off debts and start with your highest interest rates. Remember, debts can include more than credit cards; it can also mean a car payment or student loan. There’s no bigger drag than having to pay a high interest bill every month. Even if your refund doesn’t cover the entire outstanding balance, look into paying a portion of the balance and then roll the remaining debt over to a balance transfer credit card with little to no interest rate. Plus, paying off debts can increase your credit score — a perfect bonus for those of you looking to finance a mortgage. Buying your financial freedom never felt so good!
By making additional payments on your mortgage, you can reduce the amount of interest you will pay over the life of the loan. The savings can be significant as you will also build equity a lot faster! In addition, those who pay down their mortgage may also have the option of eliminating private mortgage insurance, or PMI, if you have a conventional loan. With this in mind, it can make sense to send in extra payments when possible as these will help you pay off that initial housing deposit and get rid of your smaller payments!
When you work every day for your hard-earned money and finally Uncle Sam gives something back to you, it’s tempting to indulge! On the other hand, saving some (or all) of your refund can easily set you on a strong financial path for the future. Here are some clever ways to give your money a purpose:
- Start an emergency fund. If you have ever experienced an unexpected crisis in life, then you know the importance of an emergency fund! Storing money can take some time, but with a little extra cash on hand it’s a great time to take initiative and start saving!
- Make an investment. As the saying goes, you have to spend money to make money. A tax refund is the perfect extra cushion of cash that will allow you to invest in real estate or stocks without having to dip into you checking or savings account.
- Grow your 401K. If you’re receiving a tax refund this year, you have the opportunity to add a little padding to your nest egg for your retirement and to put that money to work for you! There are several ways to invest, but an easier way is depositing the refund in an individual retirement account. Whether it's a 401(k), an IRA, or some other type of account, maxing out your retirement savings should be a top priority.
Through April 30th, our buyers will have the opportunity to save up to $17,500 on the new Florida home of their dreams. Don’t worry about spending your tax dollars on design upgrades or closing costs, because we’ve got you covered! Contact us today by calling our New Home Specialists at 863-797-4999 or visit www.highlandhomes.com.
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