The Home Buyer's Korner

Information presented should be used for educational purposes only.

May 17th, 2015

Guy looking up in color

GREATER PEARL CITY HAWAII

The Home Buyer’s Korner

Google+ RE Community

Google+ Mortgage Lender Community

Google+ General Contractor Communities

Mortgage Credit Certificates

MN-Mortgage-Credit-CertificateThe Mortgage Credit Certificate (more commonly referred to as MCC) is a certificate issued by certain state or local governments that allows first time home buyers to claim a tax credit for some portion of their mortgage interest paid during the life of the loan. When purchasing and using an MCC if you sell the home within 9 years of your closing date you may have to recapture (repay) all or part of the benefit you received from the MCC program. For additional information on IRS’s policy for Recapturing (Paying Back) a Federal Mortgage Subsidy read IRS Publication 523.

The MCC program is designed to help first-time homebuyers offset a portion of their mortgage interest on a new mortgage as a way to help homebuyers qualify for a loan. Because it is a tax credit and not a tax deduction mortgage lenders use the estimated amount of the credit on a monthly basis as additional income to help the home buyer to qualify for the loan.

Some of these restrictions may be waived for certain circumstances. For example, following a natural disaster, state or local governments may raise or remove the income limits for affected municipalities temporarily to help spur redevelopment.

The MCC Credit can be used with Fannie Mae Conforming, FHA, USDA and VA home loans. These credits can help a home buyer qualify for a little “bigger” (more expensive) home. While all homeowners can claim an itemized tax deduction for mortgage interest, home buyers that secure an MCC can go a step further. An MCC reduces your tax liability, dollar-for-dollar, by a percentage of the mortgage interest you pay.

The amount of mortgage credit allowed varies depending on the state or local government that issues the certificates, but is capped at a maximum of $2000 per year if your State’s rate is over 20%, by the IRS. As an example, if a homebuyer were to receive an MCC that offers a 30% credit on a $200,000 loan for 30 years with a rate of 6%, the allowable tax credit would be figured as follows (all numbers rounded):

  1. Mortgage Interest Paid (1st Year): $11,933
  2. x MCC Credit: 30%
  3. = Total Credit: $3579

Because the total credit in this example exceeds the IRS limit of $2000, the homebuyer would report a $2000 credit on their tax return or to put it simply a $167 each month you shouldn’t leave on the table if you qualify for the credit. The buyer may continue to receive a tax credit for as long as they live in the home and retain the mortgage, so ask about the Mortgage Credit Certificate early in the pre-qualification process.  The program requires additional underwriting and starting early ensures you can use it without passing your sales contract closing date.

Generally speaking, MCC first time home buyers must meet certain minimum guidelines:

  1. Home buyers must not have owned a home in the previous three years.
  2. Home buyers must meet income and purchase price restrictions.
  3. Home buyers must intend to use the new home as a primary residence.
  4. Home buyers must provide the last three years of their Federal Income Tax Returns
  5. PRE PURCHASE COUNSELING IS REQUIRED – online is acceptable
  6. All persons living in the house and signing the deed are counted in the family income limits (includes Non-Purchasing Spouse)  ALL income is counted in family income and annualized over 12 months – overtime, bonus, social security, child support, unemployment compensation, rental, seasonal or part-time, self- employment, dividends, interest and lotto winnings.

VISIT OUR GREATER PEARL CITY AREA

HOMES FOR SALE LISTINGS

Livingston Homes for Sale

FIND HOMES THROUGHOUT PEARL CITY HAWAII

HUD FORECLOSED HOMES IN & AROUND THE GREATER PEARL CITY HI AREA

USDA FORECLOSED HOMES IN & AROUND THE GREATER PEARL CITY HI AREA

FNMA HOMEPATH FORECLOSED HOMES IN & AROUND PEARL CITY HI

FIND MORE FORECLOSURES IN & AROUND PEARL CITY HI

HAWAII HOME OWNERSHIP TOOLS

Your Home Purchasing or Refinancing & Renovation Tools,

Home Improvements, Home Renovations,

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase.

Here are just a few of the home improvements

you might consider with any Home Renovation loan

Repair or replace a roof

Install, replace or repair gutters and downspouts

Replace, repair or upgrade your HVAC system

Repair or replace plumbing

Install, repair or replace electrical systems

Kitchen remodeling (including the purchase and installation of appliances)

Bathroom remodeling, Full interior painting, Total exterior painting

Repair or replace a septic system and/or well

Disability access (wheelchair ramp, elevator, widen doorways)

Build, repair or replace deck, patio or porch

Basement waterproofing and finishing

Abatement/Stabilization of lead-based paint hazards

Replace old windows, Room additions, Finish an attic

Add a second story to your home

Replace a termite damaged sill plate (a water-damaged sill plate also)

Possible landscaping items such as correction of grading & drainage problems,

tree removal, repair a driveway and sidewalks

FHA 203K

Your Home Purchasing or Refinancing & Renovation Tool

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

FANNIE MAE HOMESTYLE

The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

USDA RURAL DEVELOPMENT

Up to $10K for Home Improvements, Renovations or a Simple Remodel

Mortgage Loan Officers, Real Estate Agents & General Contractors are ready to assist you

A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision-making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

To print this document click on “Open in New Window” located at the lower right corner;

click on “File”; then click on “Print”. In the center of the screen you will

have the option to “Create A Printable PDF of the Presentation”.

START YOUR PATH TO HOME OWNERSHIP TODAY

FNMA HomeStyle FNMA My Community Mortgage FHA One-Time Close Construction Portfolio or VA home loan Homes for Sale REO Short Sales FNMA HomePath Properties HUD Homes USDA Homes Condominiums Co-OpsTownhomes Manufactured Homes Modular Homes Mobile Homes Log Homes Second Homes Investment Property 2-4 Family Custom Home Builders Custom Built Homes Luxury Homes General Contractors Home Improvement Experts Kitchen & Bathroom Renovations Real Estate Brokers & Agents Mortgage Lenders Federal Credit Unions Community Bankers Real Estate Listings Pearl City Heights-Crest-Crown Estates Hoomaemae Street Estates Pearl City Ewa-Schofield Junction Kalauao Pacific Palisades Waiau A Rd Aalii Pl Aamaka Pl Aamanu St Aamomi St Aaniu Loop Aaniu Pl Aapi Pl Aapi Way Acacia Rd Aeo Pl Ahaiki Pl Ahaiki St Ahakapu St Ahakuhina Pl Ahakuka Pl Ahamoa St Ahapule St Aikoo Pl Ailolo Pl Aimama Pl Akaikai Loop Akalakala St Akepa St Akeukeu St Akiki Pl Alaulau St Aloha Ave Aluka Loop Amikamika Pl Amikuku Pl Amokemoke Pl Amokemoke St Amoomoo St Anakole Pl Anapanapa St Anihinihi St Anini Pl Anini Way Aniuniu St Apaakuma Pl Apaakuma St Apapa St Apoepoe Pl Apoepoe St Ashley Ave Auhuhu Pl Auhuhu St Aumakua St Austin Ct Awahiwa St Awalii St Awikiwiki Pl Awikiwiki St Birch Cir Cedar Dr Coral Ave Curtis Ct Date Dr Elm Cir Elm Dr Etcell Ct Farm Ave Farm St Haawi Way Hila Pl Hinu Pl Hoohaaheo Pl Hoohai Pl Hoohai St Hoohakanu Pl Hoohaku Pl Hoohaku St Hoohale St Hoohalia St Hoohalike St Hoohamo Pl Hoohana Pl Hooheke St Hooheno Pl Hooheno St Hoohiamoe St Hoohie Pl Hoohiki Pl Hoohiki St Hoohoa Pl Hoohoihoi Pl Hoohoihoi St Hoohonua St Hoohuali Pl Hoohui St Hoohulili St Hoohulu Pl Hoohulu St Hooia St Hooikaika Pl Hooiki St Hookahi St Hookahi Way Hookahua St Hookala St Hookani St Hookano St Hookena St Hookiekie St Hookoe St Hookumu Pl Hookupa St Hoola Pl Hoolaa Pl Hoolaa Way Hoolana Pl Hoolana St Hoolaulea St Hoolauna St Hoolawa Pl Hoolehua Pl Hoolehua St Hoolele St Hooli Cir Hooli Pl Hooluu St Hoomaemae St Hoomahie Loop Hoomahilu St Hoomaike St Hoomailani St Hoomalimali St Hoomalolo St Hoomalu St Hoomoana Pl Hoomoana St Hoomoana Way Hoomoe Pl Hoomoe St Hoona Pl Hoona St Hoonipo St Hoono St Hoopai Pl Hoopai St Hoopuloa Pl Hooui Pl Hoowae St Hoowali St Hualau Pl Huaono Pl Hugh St Huikahi St Inia Pl Kalai Pl Kalauipo Pl Kalauipo St Kaleilani Pl Kaleilani St Kaluamoi Dr Kaluamoi Pl Kamahao Pl Kamahao St Kanaeha Pl Kanihi St Kauhihau Pl Kaulike Dr Kaumahana Pl Kaumoli Pl Kaumoli St Kaweloka Pl Kaweloka St Kawelu St Kipaipai St Kirkbride Ave Kirkbride Pl Koaheahe Pl Koaheahe St Komo Mai Pl Kuahaka St Kuahao Pl Kuala St Kuleana Pl Kuloko St Kumano St Kumoana St Kuokoa St Laauhuahua Pl Laauhuahua Way Lanikeha Pl Lanikeha Way Laniwai Ave Lehua Ave Leomele St Ley Ct Loch St Lowella Ave Luehu Pl Luehu St Maiha Cir Maiha Pl Maiki Pl Makamua Pl Makamua St Makolu St Maluawai St Mililani Cemetery Rd Mililani Memorial Park Rd Nanakai Pl Nanakai St Noelani Pl Noelani St Nola St Paaaina Pl Paaaina St Paailuna Way Paakamaa St Palamoi St Palekaiko St Palm Ave Panee St Parker Ct Pearl City Exit Rd Puananala St Puu Alani Way Puu Hina Pl Puu Kala St Puu Kipa St Puu Kula Dr Puu Momi St Puu Poni Pl Puu Poni St Puu Ulaula St Robinson Ave Upalu St Victor Wharf Access Rd Wahinani St Waianiani Ct Waiauau Ct Waiawa Rd Waiea Ct Waihona Pl Waihona St Waikahe Ct Waimano Home Rd Waipuna Ave

Join us at Real Estate Social

Comments are closed.