A Mortgage Credit Certificate is a certificate that allows homeowners a tax credit on a percentage of the interest paid on a mortgage for that tax year. To take advantage of a Mortgage Credit Certificate, buyers must meet income, home purchase, and mortgage requirements. These requirements may vary by state.
In a nutshell, the primary purpose of the MCC is to make it easier for eligible first-time home buyers to qualify for a mortgage, and, to help them reduce their taxes. It’s also used to stimulate redevelopment in some special circumstances.
Eligible homebuyers may use 40 percent of their annual mortgage interest paid, up to $2,000, as a tax credit. Borrowers may also claim their remaining annual paid mortgage interest as a tax deduction. A Mortgage Credit Certificate tax credit remains and option for the home buyer over the life of the loan provided that the home is the buyer's primary residence.
The MCC tax credit can help pay for a home, but, it’s not for everyone. You may be a good candidate if you:
Apex Home Loans can help you find out. Please feel free to contact us for answers to all of your home loan questions.