Put Your Tax Refund into Your Home

Mike Capelle, Broker/OwnerMike Capelle, Broker/Owner

Are you getting a tax refund this year? The average refund is about $3,000 — enough to reinvest in your home, which can pay off in the future. Whether you’re expecting a few hundred dollars back or a few thousand, put some of it to work with these suggestions.

Pay down debts

With home prices continuing to creep upward and interest rates still remarkably low, you may have taken out a home equity loan to fund a remodeling project or two. Why not apply your tax refund toward this loan or pay down other debts (especially high interest debt like credit cards)? Paying down debt will lower your eventual interest cost. Just be sure your loan doesn’t impose early payment penalties.

Freshen up

Want to add a backsplash, paint a room, add new landscaping, replace your bathroom vanity, or replace faucets? Go for it! Chances are, your refund will cover these types of small projects — and more. And you’re getting a two-for-one: you’re both improving your living experience, and adding value at the same time.

Boost your energy efficiency

No matter how big or small your refund check is, there are all sorts of things you can do, at varying price points, to make your home more energy efficient and save on energy costs — from buying energy-efficient appliances to adding extra layers of insulation. Storm doors are just a few hundred dollars, and can be a great investment if you have an older front door. Purchasing a low-flow showerhead or installing a programmable thermostat are other affordable options.

Buy flood insurance

The federal government offers coverage through the National Flood Insurance Program at an average cost of about $700 per year. That’s a small price to pay for a problem that can be big. After all, anywhere it rains, it can flood, and your homeowners insurance doesn’t cover it. (It typically only covers damage that comes from the top down — such as rain and wind damage, but not rising water and flooding.) Stop taking chances, and buy yourself peace of mind; sometimes good money management means addressing the painful “what if” questions. Premiums vary depending on your property’s flood risk. To get an estimate in your area, visit FloodSmart.gov.

— Source: Zillow Blog

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