tax return 2020

Putting your tax refund toward your down payment can be a brilliant thing

Bethany Ramos Finance, First-Time Homebuyer, Home Buying, Homeowners, Selling, Taxes

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As an American taxpayer, you could expect to get back an average tax refund of $3,163, according to last year’s IRS numbers. This amount dropped slightly from the average return of $3,436 sent out the year before.

Because of the impact of the coronavirus, the IRS is giving taxpayers more cushion this year, extending the tax deadline from April 15 to July 15.

Average tax returns may make it up to 85% easier to buy

Tax returns are most often thought of as extra cash that can be put toward big-picture goals. If you’re hoping to buy a house in 2020, or sell your home and trade up, you might be looking at enough funds to cover some or all of your down payment.

Here’s a map that shows the amount of last year’s average tax return received by state:

tax return 2020

Many first-time homebuyers are still under the impression that a 20-percent down payment is required to buy a house. But mortgage programs from Fannie Mae, Freddie Mac, and the Federal Housing Authority (FHA) all have minimum down payment requirements as low as 3 percent. For the veterans and active duty service members who qualify, VA loans may also require no down payment.

Show your mortgage who’s boss: Download LoanFly (it’s free). Input a few details. Get prequalified to buy your dream house from anywhere.

If you used this year’s tax return to begin saving for a down payment, how close would that get you to a minimum of 3 percent down?

On this map, you’ll see the percentage the average tax return covers of a 3-percent down payment, based on median home prices in that state:

tax return 2020

The higher the percentage of a state, the closer your tax return will move you toward owning a house. If you live in a state like Oklahoma, for example, using your tax return to save for a down payment could get you 85 percent closer to your brand-new place.

Not your average mortgage lender: We can get you home in 10 days

The short version: We bend over backward for our borrowers, moving you from contract to close in 10 days. The long version: Today’s average time to close sits at around 45 days for most other lenders. But because of our speedy in-house processing, exceptional attention to detail, and integration of the latest industry-leading technologies (hello, LoanFly!), we’re beating the 45-day standard by a wide margin and closing borrowers 5 weeks faster.* Got your tax return handy? Learn more about our low- and no-down-payment mortgages when you prequalify.

*”Origination Insight Report.” Ellie Mae, Nov. 2019.

For educational purposes only. Cornerstone Home Lending, Inc. and its affiliates do not provide tax advice. Please consult your professional tax advisor for specific guidance.

Sources deemed reliable but not guaranteed.

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