Did you receive a tax refund from Uncle Sam? Congratulations! There’s nothing like seeing some extra funds hit your bank account. But before you use that money to fund a shopping spree or a luxury vacation, consider how you can best use that money to improve your financial situation – especially if you own or are buying a home. Homeowners and buyers in New York State can use their tax refunds to reach their real estate goals in a number of ways. Here are some tips to help make the most of your tax refund.

Save for a down payment

Your down payment is typically a percentage of the total cost of the home. The larger your down payment, the smaller your mortgage will be. Use your tax refund to start saving for a down payment or quickly grow the money you have already saved. This can help you qualify for a lower interest rate on your mortgage and make your monthly payments more affordable.

Pay off debt

Paying off high-interest debt like credit card balances can help improve your credit score, which is an important factor in getting approved for a mortgage. Use your tax refund to pay down debt and improve your debt-to-income ratio, which is another important factor lenders consider when evaluating your creditworthiness.

Improve your credit score

In addition to paying off debt, there are other steps you can take to improve your credit score. These include paying your bills on time, keeping your credit utilization ratio low, and disputing any errors on your credit report. Use your tax refund to pay for a credit monitoring service or consult with a credit counselor to get personalized advice on improving your credit score.

Get pre-approved for a mortgage

Getting pre-approved for a mortgage can help you understand how much house you can afford and make you a more attractive buyer to sellers. Use your tax refund to pay for the application fee for pre-approval or consult with a mortgage broker to help you understand the process.

Invest in home renovations

If you already own a home, use your tax refund to invest in renovations that can increase your home’s value. This could include updating your kitchen or bathroom, adding a deck or patio, or finishing your basement. These renovations can not only increase your home’s value but also improve your quality of life while you live there.

Build an emergency fund

Owning a home comes with unexpected expenses like a leaky roof or a broken appliance. Use your tax refund to build an emergency fund to cover these expenses so you don’t have to rely on credit cards or loans to pay for them.

Consider a down payment assistance program

New York State offers several down payment assistance programs that can help homebuyers with limited funds get into a home. These programs offer grants or low-interest loans that can be used to cover a portion of your down payment. Use your tax refund to apply for one of these programs and take advantage of the financial assistance available.

Contact Keller New York today

Are you ready to buy a New York home? Then contact the Keller New York Bronx office at 718-697-6800 or the Eastchester – Scarsdale office at 914-713-3270. Our team has expert knowledge of New York real estate and we’re available to answer all your questions. Contact us today!