Don’t let tax season get you down! Make the most of it and use your refund toward a down payment for closing costs to buy your new home. If this sounds like your kind of deal, you might find this information helpful as you plan. 

Below is a reality check, outlining down payment options and providing a mental checklist of the other possible costs associated with buying a home: 

Down Payment


Most lenders and loan programs require down payment money, which can be as much as 20% of the cost of the home. For some people, saving this amount of cash can be difficult to achieve. Especially if unexpected costs come up, like tax payouts! 

However, homeownership is still possible. Several programs are available that allow buyers to make down payments that are significantly less than 20% of the price of the home. Many programs offer 3.5-5% down payment options with approved credit. For veterans, there are zero-down programs so they can go to the closing table without even writing a check. 

Out of Pocket Expenses & Closing Costs 


Additional dollars should be saved for an estimated range of 1-3% of the value of the home for out of pocket or additional closing costs. This fact is particularly relevant for first-time buyers and those who haven’t been in the market for some time. Closing costs vary from city to city — and even from home to home.

Some examples of national averages include tax services for around $85, credit reports for around $20, and appraisals for $350-$500 or more, depending on the size of the home. Closing costs can also include fees related to home inspections, title fees, insurance, bank fees, and termite or flood inspections, to name a few.

The mortgage lender requires some of these services. Others are legally necessary depending on where the buyer lives. While not a requirement, extra dollars can be wisely spent if earmarked towards a home warranty that guarantees the appliances and inner workings of a home for the first year of ownership.

In some instances, your Realtor may be able to get the seller of your home to contribute toward the closing costs. Our team would be happy to discuss these options with you! 



The first step is to talk to a trustworthy lender who can give you your loan requirements for down payment and closing cost expectations.