Mortgage Credit Certificates
A Mortgage Credit Certificate is a 15-percent tax credit given to qualified first-time buyers. The income limit varies per county and funding for this program is not always available. If you secure a Mortgage Credit Certificate, you will receive a tax credit equal to 15 percent of the interest you pay on your mortgage. For example, if your interest rate is 7.5 percent on a $150,000 loan, you will pay about $11,250 in interest in your first year. The government will give you a tax credit equal to 15 percent of this interest ($1,687.50). A borrower may file a revised W-4 form through their employer, which lowers the amount of federal income taxes withheld throughout the year, giving him or her extra money in every paycheck. This is a wonderful program when it is available.
To find out if the Mortgage Credit Certificate program is available in your area, contact your loan counselor.
Down-payment assistance is available in many counties for first-time home buyers. This assistance usually comes in the form of grants or loans.