What’s Interesting about Down Payments?

One in every ten climbers dies trying to reach the top of Mount Everest. Even using every resource available to them, only 20% can reach the top. Getting into position for financial success or trying to improve your credit rating can feel like climbing a mountain, but it doesn’t have to. We can help you exercise wisdom while seeking creative ways to use your resources.

An improved or repaired credit rating means more options for you. How are you planning to spend your return? Approximately 84% of Americans are planning to invest their check from Uncle Sam this year in assets that add to their worth – cars and other major purchases.

Due to recent home market trends, more people are renting houses. A good credit score can put you in a position to buy a home – either for yourself or as a way to create extra income by renting it out to others. Great deals on homes can be found all across the country these days, and a healthy down payment can increase your monthly returns by making payments more manageable.

Using your tax return to purchase an automobile may be an option as well. Most car dealers salivate over the opportunities tax time presents, even offering to do your taxes right there at the showroom so that you can use the refund to make your down payment.

Using your tax refund to make down payments on large purchases provides you with two possible benefits: a lower and more manageable monthly payment, or the ability to buy more than you would have been able to afford otherwise.

A down payment will not, however, affect the interest rate you are able to get for the items you finance.

Your credit score is what determines the interest rate on the loans you obtain. That single number can have more to do with your overall purchasing power than any other number. The credit report will directly affect how much you will ultimately spend on interest. Can a down payment improve the amount that you pay in interest, too? Yes. While it will not lower your interest rate, it can significantly cut the total amount that you have to finance.

A down payment is basically discretionary funds used to pay on the principle of a loan up front. When coupled with a good credit score, it can put you in a position to make some seriously good choices for your life. If you’re credit is suffering or in need of repair, you’re often wise to wait on the purchase and use your tax refund to pay down your credit debt so that you can improve your score.

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