Author Topic: Mortgage Credit Certificate  (Read 1788 times)

22U44

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Mortgage Credit Certificate
« on: March 01, 2015, 07:40:46 AM »
Does anyone have experience or knowledge regarding the Mortgage Credit Certificate (MCC). I was reading about the MCC on http://www.joshuakennon.com/insane-car-expenses/ and if there aren't any serious pitfalls it would change my personal rent/own equation. According to what I have read on my state's website I am eligible for a 50% tax credit on any mortgage interest payed per year (With the credit's cap being $2000 dollars). If that is truly the case then I would be able to effectively purchase a home on a -1 to 2% mortgage (depending on whether you factor in inflation). Am I missing something or is this the best thing I have never heard about?

SaintM

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Re: Mortgage Credit Certificate
« Reply #1 on: March 01, 2015, 11:31:46 AM »
There is no way the person in that story ($40k income) will have $2k in state tax liability, against which to offset the MCC credit.

22U44

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Re: Mortgage Credit Certificate
« Reply #2 on: March 01, 2015, 12:27:52 PM »
The state of FL's MCC website says https://apps.floridahousing.org/StandAlone/MCCReservations/MCCInfo.htm
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Each year, a homeowner may claim a dollar-for-dollar reduction of income tax liability on 50 percent of the mortgage interest on their first mortgage, reducing the amount of federal taxes owed by as much as $2000.

That would lead me to believe that the credit would count against my federal income taxes. Am I missing something?

tj

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Re: Mortgage Credit Certificate
« Reply #3 on: March 01, 2015, 02:10:08 PM »
No, I don't know why someone suggested the MCC was only deductible against state taxes. In fact, I think it's only deductible against federal taxes. The catch is that if you refinance your loan, you lose the credit. It's a good deal if you qualify. It's ahrd because it has low income limits, or higher income limits in lower income parts of town. It varies by state of course. Also only some lenders are approved for the program, you may have higher closing costs.

arebelspy

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Re: Mortgage Credit Certificate
« Reply #4 on: March 04, 2015, 03:55:07 PM »
What a line in that Joshua Kennon article:
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As long as there are no excessive medical expenses due to a health crisis, if someone in the United States earning $40,000 per year doesnít retire with at least a seven-figure portfolio, it is because they didnít know how to manage money.  Period.  There are no exception.  It is basic mathematics.  If you donít want that, fine, but donít act like it was because it was impossible.  It wasnít.  You just didnít do what was necessary (which isnít even all that much sacrifice, letís be honest) to do it.

BOOM!
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