Are you a first-time home buyer looking for ways to save on your home purchase? A Mortgage Credit Certificate (MCC) from the North Carolina Housing Finance Agency (NCHFA) may be the answer you are looking for. Those who lack finances and feel discouraged in their home-buying journey can apply for this loan. An MCC is a tax credit given to a first-time buyer or a qualified military veteran. The credit allows them to claim a tax credit for some mortgage interest paid during the year. Further, the credits also help them save thousands of dollars over the life of the loan. This blog post will cover all the possible aspects of MCC and how it can benefit first-time home buyers.
What Does a Mortgage Credit Certificate (MCC) Mean?
Mortgage certificate credit is used to help make first-time home buyers and military veterans’ homes possible. It is designed to help buyers save money on their federal income taxes.
In addition, the MCC provides an annual federal tax credit equal to a percentage of the mortgage interest paid during each year of the mortgage term. The buyer can get a 30 % tax credit in North Carolina as federal income. Similarly, an MCC enables eligible borrowers to refinance their mortgages without losing the tax credit.
Furthermore, with an MCC, eligible borrowers can take advantage of the lower interest rate and reduced monthly payment associated with refinancing while still receiving the tax benefits of the credit. This makes it easier for borrowers to reduce their monthly mortgage payments while maintaining their federal tax savings.
The Process of Obtaining a Mortgage Credit Certificate
The Mortgage Credit Certificate (MCC) is a great option for first-time homebuyers looking to maximize their homeownership opportunities. The MCC offers eligible individuals and families a federal income tax credit for a percentage of the mortgage interest paid on their primary residence. This makes it easier to afford the upfront costs of purchasing a home, such as a down payment or closing costs. Further, the MCC allows eligible borrowers to take advantage of reduced mortgage interest rates, making refinancing easier. It can also help reduce the overall mortgage cost by reducing the taxes owed each year.
For example, if an eligible borrower has a mortgage loan of $200,000 at 5% for 30 years, the MCC is set at 30%. Then you have to pay $10,000 in interest for the first year. However, with MCC, you will get a tax credit of $3,000 and be able to claim a tax credit. This means that a borrower’s net cost for their mortgage loan would be reduced by $3,000 annually.
By providing first-time homebuyers with more affordable housing options, MCCs are important for helping individuals and families realize the dream of homeownership.
Who is Eligible For an MCC?
Mortgage Credit Certificates are available to first-time homebuyers and move-up buyers. Both buyers must meet certain income limits that the North Carolina Housing Finance Agency (NCHFA) sets. Further, the buyer must be a resident of North Carolina. Generally, your household income can be at most $99,000 if you live in a metropolitan area or $78,450 if you live outside of a metropolitan area. Additionally, the home’s purchase price must be below the local county maximum, and the loan amount for the property cannot exceed the maximum loan limit set by the Federal Housing Administration (FHA).
You can also use an MCC to refinance your existing mortgage loan if you meet all the other requirements. This can effectively reduce your down payment amount since you can use the MCC to lower your taxes owed, freeing up more money for your down payment. The mortgage credit certificate also has to be issued before your loan closes. In addition, the buyer has to occupy the home as their primary residence within 60 days of closing.
How Do I Get an MCC?
To get a Mortgage Credit Certificate (MCC), you must first contact a lender who is approved to offer the program, like Amy Bonis. However, different lenders have different requirements and offerings, so it is important to research the type of MCC program that would work best for your situation.
Once you have found an approved lender, the process is straightforward. You must apply and provide documents such as proof of income, credit history, and other required documents. After the lender has reviewed the application, they will either approve or deny the request for an MCC.
Furthermore, if your application is approved, you must close your loan, and the MCC will be issued then. It is important to note that you can get MCC when the refinance loan has a lower principal amount than the original amount.
The Benefits of an MCC By Amy Bonis
Mortgage Credit Certificates (MCCs) can be incredibly useful for first-time home buyers. It is because it offers a fixed rate throughout the loan tenure. With an Amy Bonis consultation, first-time home buyers can receive a federal tax credit equal to a percentage of their annual mortgage interest. This tax credit can provide significant savings, helping to make the purchase and ownership of a home more affordable.
With Amy Bonis MCC consultation, the potential home buyer will get help from reduced tax liability, reduced interest payments, and more manageable mortgage payments. So book your appointment now or visit Amy at her office for a physical consultation.
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