Increase your take home pay with a mortgage tax credit

Did you know that as a first time home buyer you could receive up to a 20%  reduction in your over all tax liability for the life of your loan? And that reduction could help you qualify for more home?

Its called a Mortgage Credit Certificate. Its a certificate issued by the state government that allows a taxpayer to claim a tax credit for the amount of mortgage interest they paid in a given year.

Here’s an example of how it works:

Say you get a loan for $200,000 and the interest rate is 6%. The interest paid after the 1st year is $12,000. The total tax credit equals $2,400 ( $12,000 x 20%) or a monthly savings of $200 (tax credit of $2400 divided by 12 months).

So you can actually use that $200 as addition monthly income to help you qualify for larger loan amount.

There are a few restrictions such as you must be a first-time home buyer and the the house has to be your primary residence.

There are also income and purchase price limits that vary by county and you will have to take a first-time home buyer education class.

If you’d like to know more about the Mortgage Credit Certificate, let me know and I willl put you in contact with a mortgage Lender that can help.

Disclaimer:  I am not a Tax Adviser, Attorney, Accountant or a Doctor.  Any advice I give is my opinion based on my experience. Always seek the advice of a professional before acting on something that I might say.

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