Stimulus Check and Mortgages
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Millions of U.S. households have received or will soon receive an economic stimulus payment from the federal government. This article provides information about the stimulus payment and offers suggestions for the homebuyer on using this money to your benefit when buying a home.
According to the IRS, if you have a social security number, filed a 2007 tax return, and earned at least $3,000 last year, you may be eligible for a stimulus check. Payments began at the end of April and will be sent out through July. People must file a tax return to receive the payment, even if they are not otherwise required to file. The amount you receive will not change the amount of your tax refund and is not taxable.
To receive your payment, you don’t have to do anything more than file your tax return. Your stimulus payment will be deposited directly into your account if you provide direct deposit information on your tax return or will be sent to you by check if you did not.
Now for the suggestions on using the stimulus rebate as you purchase a home. You could:
1. Use the stimulus check as part of the down payment on your home. A higher down payment means you’ll take out less debt, have potentially lower monthly payments, and maybe even get a lower interest rate.
2. Use the money to build up your savings. Some loan programs — depending on how good your credit is — may require you to have enough money saved to cover a month or two of home loan payments.
3. Use this windfall to help cover closing costs. Many home loans have closing costs, and your stimulus check can be used to pay for some of those. Closing costs might include fees for underwriting, an appraisal, title insurance, as well as other expenses.
4. Use the rebate to purchase furnishings. When you buy a home, especially as a first time homebuyer, you may need to purchase furniture fill it. While your check might only buy half a couch from a regular furniture store, it can purchase a more by going to garage sales and thrift stores.
5. Use the money for gas. You’ll probably be doing a bit of driving trying to find your dream home, and with gas prices the way they are, the stimulus payment will come in handy.
The amount of your stimulus payment may not be huge, but it can help you buy or furnish a home. And the great thing is that you didn’t have to do much to receive the money.
