What is a Mortgage Credit Certificate (MCC)?
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.
What’s the Purpose of a Mortgage Credit Certificate?
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.
How does a Mortgage Credit Certificate work?
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.
How do I know if a Mortgage Credit Certificate is right for me?
The MCC tax credit can help pay for a home, but, it’s not for everyone. You may be a good candidate if you:
- Have medium to high income
- Are opening a fairly large loan
- Pay at least as much in federal taxes as your estimated MCC credit
- Are in a higher tax bracket
Are You Eligible for a Mortgage Credit Certificate?
Apex Home Loans can help you find out. Please feel free to contact us for answers to all of your home loan questions.
Sources:
https://www.houseloanblog.net/mcc-mortgage-credit/
https://smartasset.com/mortgage/what-is-a-mortgage-credit-certificate-and-could-i-benefit-from-it
https://www.tsahc.org/homebuyers-renters/mortgage-credit-certificates
Topics: First Time Home Buyer, mortgage credit certificate, homebuyers, mortgage credit
