Three ways to maximize your refund

Published 10:07 pm Thursday, February 8, 2018

By Phillip J. Hines

This is the time of year many Americans anticipate: the grand refund, where you overpaid the government in taxes and anxiously await your tax refund.

For many, the tax refund may be as little as a couple hundred dollars to several thousand dollars — which means you have a tremendous opportunity to make some very smart real estate moves in 2018.

Use your refund to fund a down payment


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Instead of falling for the advertisements to buy a new TV, a fancy car or some other item that depreciates within seconds from purchasing it, consider using your hefty tax refund as a down payment on a house or plot of land. Suffolk is one of the only areas left in Hampton Roads that has semi-affordable houses with great amenities. Use your down payment to invest in an asset, not an item.

Use your refund to refinance

It’s crucial that once you have your asset, you take care of it. Part of that means getting the best possible terms; while rates are on the rise, they are still at historic lows, so using your tax refund to pay down your mortgage can be excellent strategy. By doing this, it may give you 20 percent equity in your property, at which point you can eliminate something called private mortgage insurance. If you have a house with less than 20 percent equity, you already know what I’m talking about. Get rid of it by using your tax refund to pay down your mortgage. Use this opportunity to refinance and save yourself thousands of dollars over the life of your loan. I’ve personally refinanced a property from a 30-year loan to a 20-year loan and had a lower monthly payment, simply because I eliminated the private mortgage insurance from the equation.

Improve your property and sell for top dollar

If you’re considering selling your house, then perhaps a down payment this year can serve as a repair fund for your house. In this market, if a buyer is going to pay full price or close to asking price for a house, then your property better be in good shape. Real estate is just as much, if not more, an emotional investment as a financial one. For many, it’s the largest financial purchase they’ll ever make. And the smallest thing in someone’s house can throw a buyer off the scent.

A little cracked paint in your ceiling? A first-time home buyer may think your house has a ceiling falling in. Seriously. Have a kitchen drawer that is just a little difficult to open? Some buyers see that as an indicator that if you aren’t keeping up with the small things, what else are you not keeping up with? While these concerns are valid at times, my point is that buyers get nervous about many things.

Spend some money making your property presentable. Make it presentable so that you can create confidence in buyers about your house. Just like a job interview, eliminate objections and put your best foot forward. Use your down payment to get your house sold for top dollar and fast — and then go splurge on that vacation you’ve always wanted with all your extra money.

Phillip J. Hines is a local real estate agent originally from Smithfield. Visit his website at