If you are buying your first home, a Mortgage Credit Certificate (MCC) from the North Carolina Housing Finance Agency can put more money in your pocket and make your mortgage payment more affordable
The MCC allows eligible buyers 10 lake a federal tax credit of 20 percent of the mortgage interest you pay annually. It can saveyou up to S2,000 each year that you occupy your new home. The MCC can be used with the new $8,000 federal tax credit. untilthai credit expires in December 2009.
Because the MeC is an immediate tax credit, you can change the withholding allowances on your W4 to reflect your decreasedlax liability and increase your monthly take-home pay.
Who is Eligible?
The MeC is available to first-lime home buyers who meellhe sales price andincome limits. The maximum sales price limit is up to S220,000 and the maximumincome ranges from $85,000 for a family of three in areas such as Raleigh downto $62,000 in more rural areas.
How Does the MCC Work?
If you borrow $183,000 al 5.5 percenl inleresl, you will pay approximatelyS}O,OOO in interest in the first 12 monlhs of yourmortgage. With the 20 percenl MCC, you can reduce your federal income tax liability by $2,000 for that year, allowing you to reduceyour monthly tax withhold ing by $166. Over the first 10 years of ownership, you would save S18,547 in federal taxes. And if youpurchase your home by December 1, 2009, the S8,000 federal tax credit can be used in conjunction with the MeC. (Consul I your lenderfor details.) like all homeowners, you can also claim an interest deduction on the remaining 80 percent of the interest you pay. An MCC can be used with almost any fixed-rate mortgage, andwith some adjustable rate mortgages. The property must be thehome buyer's primary residence.
Learn How an MCC Can Help You
The MCC is offered slatewide by the North Carolina Housing Finance Agency through more than 700 lenders and their branches, Participating lenders can be found in the Home Buyers section at www.nchfa.com or by calling 1-800-393-0988. |
