Last month we outlined the details of the $7,500 tax credit offered to San Mateo first time home buyers. Here is another tax incentive offered to San Mateo first time home buyers (or someone who has not had ownership interest in a primary residence in the last three years).
Are you Down with MCC?
The MCC is a Mortgage Credit Certificate issued to eligible San Mateo first time home buyers for a dollar for dollar reduction of federal income tax owed. In San Mateo County, the credit is equal to 15% of the annual mortgage interest you pay on your primary residence. The remaining 85% of your San Mateo mortgage interest can still be taken as an itemized deduction.
Are you Eligible?
Here are the requirements:
1. Must be a San Mateo first time home buyer or have had no ownership interest in a primary residence in the last 3 years.
2.Your gross household income must be at or below:
a. Household of 1-2 persons – Max income $95,000
b. Household of 3+ – Max income $109,250
3. Purchase price of your home cannot exceed:
a. Existing Property – $549,790
b. New Construction – $576,150
The Proof is in the Numbers
This is how the annual and tax credit benefit is calculated:
(This is for illustrations purposes only)
Loan Amount $305,000
FHA 30 Year Fixed 6.5%
Annual Interest Paid= $19,825
MCC Credit Rate= 15%
Your Tax Credit= $2,973.75
This illustration not only shows the tax advantages you have with home ownership, but by being a San Mateo first time home buyer, you can further reduce your federal income tax by using both the tax credit and the tax deduction.
Remember, I am a Mortgage Advisor and would encourage you to speak with a tax professional with any tax related issues or questions. However, if you are a San Mateo first time home buyer and would like to discuss all the great programs and the advantages of being a first time buyer, feel free to contact me at (650) 520-0915 or info@SanMateoMortgageBlog.com.
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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
Related posts:
- San Mateo Homes Just Got More Affordable for First Time Buyers
- CalHFA Cal30 Low Interest Fixed Rate Loan for First Time Buyers
- Federal Home Buyer Tax Credit Not Just for San Mateo First Time Home Buyers Anymore
- Buy a House Today and Win $7,500!
- Webinar: Guide to the Home Buyer Tax Credit – Not Just for First Time Home Buyers Anymore
