You've been saving up and imagining the day you finally hold the keys to your very own home. What you might not know is that your tax return could give you a nice boost to help you reach that goal a bit quicker. As Freddie Mac points out:

““ . . . your tax refund from the IRS can be a useful supplement to your homebuying budget.”
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— Freddie Mac

If you're receiving a tax refund this year, consider putting it toward some of the initial expenses of buying a home, such as the down payment and closing costs. The great news is…

On average, people are seeing slightly larger refunds this year compared to last year. Although the increase isn't huge, the chart below uses data from the Internal Revenue Service (IRS) to illustrate that the average individual refund is up by 3.9% this year.

Your tax refund can definitely vary in amount, but when you're looking to buy a home, any extra cash can be a significant boost. Here are a few ways you can make the most of that money, according to Freddie Mac:

• Saving up for a down payment - can be one of the toughest challenges for buyers. Using your tax refund to boost your savings might help you reach your goal more quickly. Keep in mind that you usually don't need to put down 20% to buy a home.

• You’ll need to cover closing cost - which typically include fees for the appraisal, title insurance, and your loan's underwriting. These costs usually range from 2% to 5% of the home's total purchase price. Using your refund to help with these expenses can make closing day a lot easier.

• You might want to consider lowering your mortgage rate - our lender could offer you the chance to buy down your rate, which means you can pay some money upfront for a reduced mortgage rate. If you’re feeling the pinch with the current rates and home prices, this could be an option worth looking into.

You don’t have to tackle everything on your own. Collaborating with a team of trustworthy real estate experts who know the ins and outs of homebuying, what you should be saving, and what resources are available can really prepare you for when you’re ready to make your purchase.

Bottom Line

When you're saving for a home, every little bit counts. Your tax refund might not be a huge game-changer, but it can definitely give your homebuying fund a nice increase.

What would it mean for you or your family to have your own home this year? Let's discuss it and create a successful plan together.