HONEY, THEY SHRANK OUR TAX REFUND!

George Lopez | February 28th, 2019

Lower IRS tax refunds lead smart homeowners to refinance to get extra cash

For decades, many American families have come to rely on getting an income tax refund from Uncle Sam to spend as they please. But this year things are different, to say the least. Thanks to the new tax reform law passed in 2017, the average IRS tax refund has dropped over 16% this year. As a result, smart homeowners who have been accustomed to getting a nice check from the IRS each spring are now turning to refinancing to get the extra cash they need to do home renovations or to pay off high-interest debts such as credit cards.

The shrinking tax refunds have come as a big surprise to many, and for good reason. In their rush to pass tax reform early in President Trump’s first term, there was little time for financial experts and politicians to point out that while the new tax law was designed to increase the take-home pay for many workers, it also dramatically reduced tax refunds for millions of Americans at the same time.

The shrinking refunds are significant. Last year alone, taxpayers received an average tax refund from the IRS of $3,169. According to the latest data from the IRS, however, the average tax refund has plunged to $2,640 thus far, a drop of 16.7%. The average refund amount could drop even further when taxpayers who owe money to the IRS file their income tax returns around the April 15th deadline.

But have no fear, if you’re a homeowner who was hoping for, or perhaps even counting on a sizable IRS refund to make home renovations or pay off debts, help could be on the way in the form of a Nutter Cash Back Refinance. As property values have increased over the past few years, many homeowners have the ability to refinance their mortgage and tap into their growing home equity to get the cash they need. The Nutter Cash Back Refinance is a terrific way to do this.

The Nutter Cash Back Refinance makes a lot more sense than taking out a risky home equity loan, which is a form of a second mortgage. In the past, a home equity line of credit (HELOC) was a popular option but in today’s world, most home equity loans are risky adjustable rate loans that carry an “interest-only” payment feature for a prescribed period of time, after which the monthly payment can increase significantly. More importantly, the combination of two mortgage payments (i.e., your first mortgage payment plus your HELOC payment) is often times substantially greater than if you just refinanced your first mortgage using a Nutter Cash Back Refinance and had just one low monthly payment. Besides, who wants to make two payments when you can make just one?

Another reason to use a Nutter Cash Back Refinance versus a HELOC is that you can get a low fixed rate rather than an adjustable rate. As we enter 2019, fixed mortgage rates have remained low and in fact, actually declined in February. Now is the perfect time to refinance and tap into your equity and put those thoughts of a shrinking IRS refund in the rearview mirror.

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