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Home Buying and Your Stimulus Payment

Jun 7, 2008
Millions of U.S. households have received or will soon receive an economic stimulus payment from the federal government. This article provides information about the stimulus payment and offers suggestions for the homebuyer on using this money to your benefit when buying a home.

If you filed a 2007 tax return, have a social security number, and earned at least $3,000 last year, you may be eligible for the stimulus payment. Payments have already started (as of the end of April) and will continue through July. You must file a tax return to receive the payment even if you are otherwise exempt from filing. The rebate does not increase your taxable income nor affect the amount of your tax refund.

You don't have to do anything more than file your tax return in order to receive your payment. If you provided direct deposit information on your tax return your stimulus payment will be deposited directly into your account. Otherwise, you will receive the payment by check.

Now for those ideas on using the stimulus rebate when you buy a home. You could:

1. Use the stimulus check to increase your down payment. By paying more upfront, you'll have less debt; could potentially have lower monthly mortgage payments, and might be able to obtain a lower interest rate.

2. Use the money to build up your savings. Some loan programs -- depending on how good your credit is -- may require you to have enough money saved to cover a month or two of home loan payments.

3. Use this windfall for closing costs. Many mortgages have closing costs associated with them, and while your stimulus check probably won't cover all the costs, it can sure help [it sure can help].

4. Use the rebate to purchase furnishings. When you buy a home, especially as a first time homebuyer, you may need to purchase furniture fill it. While your check might only buy half a couch from a regular furniture store, it can purchase a more by going to garage sales and thrift stores.

5. Use the money to cover the cost of gas you use as you travel around looking for the right home to buy.

Using the stimulus check for buying or furnishing a new home can ease your financial burden a little. And the great thing is, you just had to file a tax return to get it.
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