'Home Buying and Your Stimulus Payment'

Millions of households in America have already received or will receive an economic stimulus check from the federal government. This article answers a few questions related to the stimulus check and provides suggestions for the homebuyer on how to use this money to your benefit when buying a home.

According to the IRS, if you have a social security number, filed a 2007 tax return, and earned at least $3,000 last year, you may be eligible for a stimulus check. Payments began at the end of April and will be sent out through July. People must file a tax return to receive the payment, even if they are not otherwise required to file. The amount you receive will not change the amount of your tax refund and is not taxable.

Your payment will automatically be sent to you as long as you qualify and file your tax return. The stimulus payment will be sent to you by check unless you selected direct deposit on your tax return. If you did, the payment will be deposited directly to your account.

Now for those suggestions on how to use the stimulus rebate when buying a home. You could:

1. Use the stimulus check as part of the down payment on your home. A higher down payment means you'll take out less debt, have potentially lower monthly payments, and maybe even get a lower interest rate.

2. Use the money to build the reserves required by some loans. Certain loan programs may require you to have sufficient money in savings to cover a month or two of home loan payments. The strength of your credit could play a role in determining whether or not reserves are required.

3. Use this windfall to pay closing costs. Many mortgages have fees associated with them, and your stimulus payment can help cover these costs. Possible fees might be charged for pulling a credit report, appraising the value of a home, and for title insurance.

4. Use the rebate to buy furniture. As a first time homebuyer, or when buying a larger home, you may need to purchase furnishings. Taking advantage of thrift and discount stores can help the money go farther.

5. Use the money to pay for the gas you'll use as you drive around searching 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.

Find out more about mortgages at our Mortgage Help Center.

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