The tax credit for home buyers this year has been offered by the federal government. This is particularly given to the first time home buyers in the US. Although the federal tax credit has already expired, but there are still tax credit programs available. This tax credit is not really very popular but this can really help Canadians who want to buy a home. This is known as Mortgage Credit Certificate (MCC). This program offers you extensive benefits once you are qualified.
This MCC program exists in the local governments and state. In case you want to apply for the mortgage loan, you will also apply for this MCC. In case you are qualified and you purchase a home in geographical areas, the local government or perhaps the state will provide you MCC. This can help you save some dollars on federal taxes and in your mortgage loan.
The benefits of 2013 tax credit for home buyers;
• Home buyers can subtract their interest mortgage from their profits in order to lessen the taxable income. The amount being deducted from the tax owed prior to all the deductions that have already been taken out is called a tax credit.
• The tax credit amount is determined by means of a percentage of the interest being paid. The outstanding percentage can be utilized for the tax deduction.
• The Mortgage Credit Certificate (MCC) permits Americans to deduct their dollar for dollar account from the tax due. For instance, in case all the deductions are already taken and then the tax bill is known to be $3,400 and the credit tax is $2,400, then you are only allowed to borrow $1,000.
• Be mindful that the tax credit can only be claimed yearly. In this case, you must maintain your home as your main residence. In the previous Federal tax credit, you can only claim the tax credit after you have bought the house.
• In most cases, the lenders often think that homeowners will get extra yearly income when calculating the eligibility factors of the loan. If the tax credit is around $2,400, that kind of amount is added to the yearly income and this is the basis if you are qualified for the loan.
General MCC requirements:
• After purchasing the home, you cannot buy a home again for 3 years. There are lots of exceptions to the rule. The local government has targeted areas that they offer more incentives for individuals to buy homes. In this case, they waive the 3-year rule.
• The home should be your main residence.
• The home should not be used as commercial but a residential only.
• All types of home like manufactured and condominiums are qualified as long as they are used as a personal residence.
How to qualify for the loan?
• First time home buyer who wants to purchase homes in the designated area.
• Can meet the appropriate income limit which is adjusted to the size of the county and household.
• Can purchase the entitled home that suits to the purchase limit price.
• The property is purchased in the program area of the MCC administrator.
• Must occupy the home as main resident.
• Must claim correctly the certificate of mortgage credit on the federal tax return every tax year.
The 2013 tax credit for home buyers can be of big help. You can get the full credit amount when you buy home on the following year.