How To Use The Mortgage Credit Certificate Tax Credit Program

Hello I'm Molly Ellis, and today we're going to talk about CalHFA's Mortgage Credit Certificate or MCC program

You can use it with any of CalHFA's first mortgage programs, and it can even work with non-CalHFA mortgages The MCC is a powerful tool to help people with smaller mortgages, or who do not itemize their deductions, take advantage of additional financial benefits of owning a home What's great about the MCC is that it's a direct tax credit at tax time, instead of just a tax deduction With an MCC, you can get a credit worth up to 20% of the mortgage interest you paid in the prior tax year Then, if you itemize your deductions, you can deduct the remaining 80% of the mortgage interest to really maximize your savings

Here's how it works Let's say your family earns $80,000 per year And let's say in your first year, you pay $15,000 in mortgage interest Without an MCC, you'd just deduct that $15,000 and taxable income would be $65,000 Assuming a 15% tax bracket, that would be $9,750 in taxes

Now let's see what happens if we add the MCC You're still making $80,000 You're still paying $15,000 in interest But now, instead of deducting the full $15,000, you're deducting 80% of it So your taxable income is now $68,000 and the income tax is $10,200

Let's factor in the MCC, which is $3,000 This lowers your total tax to $7,200 for a savings of more than $2,500 If you don't itemize deductions, as nearly half of homeowners with mortgages do not, then it's a straight $3,000 savings on your taxes Remember, the MCC can be used on any mortgage if you're a first time home buyer as long as you meet the sales price and income limits Call us today and we'll hook you up with one of our preferred loan officers

They can help you with every step of the home buying process Thanks for watching, and good luck on your road to homeownership [MUSIC PLAYING]

Source: Youtube

Like it? Share with your friends!


Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Voting to make decisions or determine opinions
Formatted Text with Embeds and Visuals
The Classic Internet Listicles
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Upload your own images to make custom memes
Youtube, Vimeo or Vine Embeds
Soundcloud or Mixcloud Embeds
Photo or GIF
GIF format