Can I use my tax refund towards a down payment on a home?

It is tax refund time. Many people ask us if tax refunds can be used to pay for a mortgage down payment or closing costs.

The answer is YES!

All a borrower needs to do to document the tax refund is to provide a copy of the refund check and a bank statement showing that the refund has been deposited into their account. If the refund was automatically deposited into their account, they won’t have a copy of the check, but the notation on their bank statement will show that it is a tax refund. In the case of automatic deposits, the only documentation necessary is the bank statement.

The money does NOT have to be “seasoned”, meaning it has been in their account for 60 days. As soon as the refund has been deposited, it can be used to pay the down payment or closing costs. Some lenders may want to verify tax transcripts with the IRS before the funds can be counted.


So if you are thinking of buying or selling a home,
Call Caroline S. Farmer, 803-707-9997
Kwest Mortgage Group/Independent Mortgage Professional