Depending on your annual income, you may qualify for a mortgage interest credit. In order to receive this credit, you will need a Mortgage Credit Certificate (MCC). The IRS will require the MCC in order to grant the interest credit so be sure to speak with a Loan Officer to find out if you qualify.
The Mortgage Credit Certificate allows first-time homebuyers to reduce tax liability dollar-for-dollar by a percentage of the interest paid on the mortgage. This credit can range from 20% to 35%, depending on the MCC program. However, any interest not included as part of the tax credit can still be eligible for home mortgage interest deductions on your federal tax returns.
If you purchased a home with the MCC this year be sure to have these handy when filing your taxes this season:
- Mortgage Credit Certificate (issued directly after closing)
- IRS Form 8396 (attach this to your 1040 form)
We recommend consulting with a tax professional so that you can best maximize your savings!