When you’re planning to buy a home this year, saving for a down payment is an essential step in the process. One of the best ways to put up your savings is by starting with the help of your tax refund.

With the use of data from the Internal Revenue Service (IRS), it’s estimated that Americans can expect an average refund of $2,925 when filing their taxes this year. This map shows the average anticipated tax refund by state:

Thanks to programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae, a lot of first-time buyers can purchase a home with as little as 3% down payment. At the same time, Veterans Affairs Loans are also allowing many veterans to put 0% down. You must have heard the common myth that you will need to put 20% down when you buy a home, yet thankfully for most homebuyers, a 20% down payment isn’t actually required. It is vital to work with My Tampa Agent and your lender to understand all of your available options.

How can your tax refund help?

When you’re a first-time buyer, your tax refund could cover more of a down payment than you realize.

You might want to take into account the median home sale price by state, this map below shows the percentage of a 3% down payment that’s covered by the average anticipated tax refund:

The tax refund can get you closer to homeownership when it is in darker blue and when you qualify for one of the low down payment programs. This could be the year to plan ahead and put your tax refund toward the down payment on a home.

Not enough money from your tax return?

A recent paper from the National Bureau of Economic Research found that, out of the households that received a stimulus check last year, “One-third report that they primarily saved the stimulus money.” If you get the opportunity to save your Economic Impact Payments, try to consider putting that money toward your down payment or closing costs too. My Tampa Agent can also advise you on the down payment assistance programs that are available in your area.

Bottom Line

Saving for a down payment may post as a challenge, but it doesn’t have to be. This year, your tax refund and your stimulus savings could sum up big when it comes to reaching your homeownership goals.

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