Note: This blog was originally published in March 2014 and has been updated.

Not many people like filing their taxes, but there is a bright spot to completing all those forms: getting that sweet, sweet refund. You can use the money any way you’d like, but why not put it towards having a more financially stable future? Here are some great ways you can get the most out of your tax refund.

Whenever you come into extra money, it’s always a wise decision to pay off any existing debt you may have. Reducing your debt will help improve your credit score, which in turn will make it easier for you to be approved for a mortgage, car loan, or even a job. If you already own a home, put some of the extra cash towards paying off your mortgage. Applying extra payments toward to your debts now will allow you to save money going forward, because you’ll be paying down the principal and any interest that has accumulated. Having less debt not only gives you more financial freedom, but also more peace of mind.

Buying a home involves more than the cost of the actual house, and two such fees you will need to consider are down payment and closing costs. While it might not be necessary to have a 20% down payment anymore, you should still try to save at least 3-5%, and closing costs are typically 2-5% of the home price. Depending on the price of the home you want, this can be a sizable amount of money. If you put your refund towards your house fund and continue to add to it, you’ll soon save enough to cover all expenses of buying a house.

Another practical use for your refund is to finance home repairs or improvements. Most households have at least one feature that needs to be fixed or updated, and you’ll increase your home’s livability by making those needed repairs. Maintaining the upkeep of your home and making improvements can add to your home’s equity. The cost of the upgrade could even be tax deductible; you should speak with a tax preparer to see what you’re qualified to deduct. If it comes time to sell your home, it will only benefit you to already have everything in good shape.

It may be tempting to blow your refund check on a huge TV or an extravagant dinner, but consider investing in your financial future instead. By spending your refund on things that can make positive and lasting changes to your life, you can make your money work for you!

If you have any questions about using your tax return to purchase a home or for home improvements, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!

NFM Lending is not a Financial Adviser or Tax Consultant.  Please make sure to consult your own Financial Adviser or Tax Consultant regarding the use of your personal tax refund.

When you’re ready to start house hunting, you’ll likely come across homes in neighborhoods that have a rather consistent and harmonious look. It’s a good guess that these homes are part of an HOA, or Homeowners Association. What is an HOA, you ask?

An HOA is an organized group of homeowners within a particular subdivision, planned community, or condominium who create and enforce rules for their properties and residents. There is typically a board of directors who will hold regular meetings to discuss budgets and review rules and regulations. If you agree to live in an HOA community, those rules are legally binding.

How much are HOA fees?

Members of an HOA are required to pay dues on a monthly, quarterly, or yearly basis. They can range in cost from $50 to thousands of dollars, depending on the area and living situation. A community that offers a bunch of amenities will have higher fees than one that does not.

The fees you pay will cover the costs of varying things. Some communities might offer a pool or clubhouse, 24/7 security, trash pickup, a state-of-the-art gym, or even landscaping. It could also cover snow removal or emergency repairs. You should ask for a report of how fees are disbursed for a better understanding of what exactly you’re paying for.

You should be aware that an HOA can raise its fee. Make sure to ask what projects are in process and if there is an emergency fund before making a decision. If they don’t have a reserve fund, you could be on the hook to pay extra or raised fees to fix something unpredictable, such as a roof on a communal building after a storm.

Homes in an HOA are held to a higher standard than you might find elsewhere. The value of your property can increase because the community is going to remain visually appealing; lawns will be mowed, no scrap cars in the front yard, etc. Any issues you have regarding a neighbor can be handled through the HOA rather than personally getting involved. However, an HOA can become a nuisance if they are poorly managed or are extremely limiting.

HOA Houses

Every HOA has different rules, known as covenants, conditions and restrictions, or CC&Rs. Depending on the conditions, you might not be able to make changes to your home that are seemingly insignificant. This can include painting your home a new color, installing solar panels, making renovations, or even changing the color of your front door. You might have to keep your lawn manicured to a certain length or watered even during a drought. Review the CC&Rs so you know all the details before you make a final decision.

When looking for your future home, you should carefully weigh the pros and cons of living in an HOA. Make sure to consider all factors, including costs and rules, to help you determine if this is the right option for you.

If you have questions about HOAs or the homebuying process, contact one of our Licensed Mortgage Loan Originators. If you are ready to begin the process, click here to get started!

Getting ready to purchase a home is a huge financial undertaking. While you are probably aware of having to save up for a down payment, you might not know about closing cost fees. Don’t be taken by surprise at the closing table; here’s what you need to know about closing costs.

What are closing costs?

Closing costs are the fees charged for services performed during the home purchasing process that you will pay at closing. Closing is the final step of the loan process and is a meeting between you (the buyer), the seller, and closing officer (a lawyer or title/escrow company representative, depending on the state). You will review the legal documents provided in your loan package and execute all required documents. This step is extremely important, as it is the final confirmation of the loan terms as discussed with your lender.

What fees are included in closing costs?

The closing costs you might have to pay will vary based on the property, where you live, and the loan you choose. The following are a few of the most common fees you may see.

Again, closing costs will not be the same for everyone as they vary by region. On average, most homebuyers typically pay about 2 to 5 percent of the home purchase price. For example, if the home costs $250,000, you might pay between $5,000 and $12,500 in closing fees.

Can I avoid closing costs?

It is likely you might be able to avoid some closing cost, but not all. Here a few ways to save on closing costs.

Your lender will provide you with an estimate of what closing costs will be at the beginning of your application process, which will allow you the chance to shop around to find the best lender and deal for you. After finding a lender and going through the loan process, you will receive a closing disclosure, or the final closing cost total, at least 3 business days prior to closing. This is your time to make sure everything looks right and if you have questions or find a mistake, you have time to contact your lender. If you’re worried about how much you’ll pay in closing costs, there’s plenty of options for you! NFM participates in most state bond programs that provide closing cost assistance.

To learn more about closing costs or bond programs, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!

Make 2019 the year you become a home owner! Here are some new year resolutions for homebuyers to get you started. 

New Year Resolutions for Home Buyers

If you have any questions or want more information about the home buying process, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!