Hand Giving Money To A House On Atlantis Beach.

Tax time. You either love it, or you hate it. For most of us, we spend a few hours going over our finances (or we get an accountant to do it for us), and receive a handy tax refund in exchange.

And sure, it is tempting to spend your tax return on countless frivolous items (I know you love those shoes, and deserve that holiday, and are desperate for a new TV) but let’s be smart with our money and invest it in something that you’ll love even more; your brand new home!

Even a modest tax refund can make a valuable difference to your deposit if you use the cash to kick start a serious savings plan. The money can be used to open a savings account, and if you commit to adding a set amount of cash each pay-day to the account, your savings pool will grow rapidly, and bam! Your deposit will be there in no time! However, you should note that it would generally need to be held in your account for 3 months before it will meet your lenders ‘genuine savings’ policy.

What is Genuine Savings you ask? To put it simply, the bank wants to see evidence that you can service the loan, usually in the form of cash in a bank account saved over a minimum 3 month period.

Alternatively, think about using your tax return to pay down any debts. Lenders like to see that you can comfortably manage a home loan without the additional strain of personal loans, car loans, or credit card repayments. Using a tax refund to make a lump sum repayment on these sorts of debts can put your home loan application in a much better light. Plus, if you get rid of your debts, it will make it easier to save your deposit.

There are plenty of lenders offering low deposit loans, so make sure you do your research do get the loan that’s right for you! Finance and mortgage brokers are a great place to start as they will negotiate with banks, and other credit providers on your behalf to arrange loans. But be mindful, brokers don’t have access to all credit providers’ loans, so it pays to also shop around for yourself.

Always seek advice from qualified advisors on financial and lending products.