First Time Buyers:
By now almost everyone has heard of the possibility of the onetime $8000.00 tax credit available to first time buyers, however, many people are unaware of the other benefits which may be available to first time buyers.
For instance, there is also a “Mortgage Credit Certificate” (MCC)program. The MCC program allows the buyers to not only take advantage of the $8000.00 credit, but also take an additional 20% annual tax credit for the life of the loan. (A dollar for dollar reduction in the taxes paid)
What this means is that you would take a normal deduction of 80% of the interest paid on your mortgage, while the other 20% becomes a tax credit.
Here’s an example: Annual Mortgage Interest Paid $9500.00
80% IRS 1040, deduction $7600.00
20% MCC Credit $1900.00
If your yearend tax liability was $2000.00, you would subtract the $1900.00 credit reducing your tax liability to $100.00
Here’s another example: Mortgage amount $175,000
Interest Rate 5.5%
Monthly P&I $994
Total 1st Year Interest $9566
MCC Credit X.20
MCC First Year Savings $1913
As a new home owner, you could reduce your withholdings thru your employer, thereby taking more money home with each paycheck to subsidize your payments.
Wait there’s more:
Down payment assistance programs are also available, potentially reducing you’re out of pocket expenses to as little as $750.00 to buy a home.
We also participate in the Mpls/St Paul heroes program where $15000 grants are available for buyers who are employed in the Military, Firefighters, Police Officers, Teachers, Public Employees and more.
To not miss out on these great opportunities, or for additional information, please contact Tony Ashworth at 952-997-8899 or Blaine Peterson at 651-905-6207.
Please view www.homesbytonyandlori.com for all of your real estate needs!
