It is a mortgage interest credit and is typically afforded only to clients whose income is below the median income for a geographical area. It is mainly for lower income buyers. It requires issuance of a MCC (mortgage credit certificate) and is very convoluted in actual obtainment. The MCC's are issued by local or state entities which vary by region and our lender must have some knowledge of the process which most will not. I have never known anyone to actually receive it.
If you actually qualify, find anyone that knows about it, and find a home in an area that has the acceptable income ratios, then you can claim the credit with a Form 8396, Mortgage Interest Credit, and attach it to your Form 1040.
Outside of this mess, no, there are no other current, user-friendly tax credits. But the above is a great resume builder for a politician to show how they are helping first time buyers. :-)
If you are a first time home buyer you will find a link to NY's assistance and grants at Your-Road-Home.com. If yu have a problem finding the MCC email me and I will help.
Best of Luck, Stephen
I have been looking everywhere for the answer to all of this. Sorry to see it is "NO break for first time home buyers!"
What is especially disappointing is the tax rate I enter when I cash out my annuity this year to buy a home. It counts as pure income. Added to what I presently earn it places me in a horrible tax bracket that is deemed "wealthy". Susan and I decided to pay cash for a home this year, to become more free and independent. Grow our own food. That sort of thing. I've been saving up since 1978 for this.
The penalty of a mortgage is the same as a tax when you figure interest, which I am happy I don't have to try and write off. The blessing of saying "NO" to a mortgage is being free and independent.
The penalty is you never own it because of property tax.
As government power grows, liberty recedes.
A first time home buyer is someone who has not owned their primary resident for three years.
You will find information on Your-Road-Home.com
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Senior Loan Officer
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
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Also Read #9 MCC Tax Benefits for First Time Home Buyers 2013 at Your Road Home.com
A First Time Home Buyer is someone who has not owned their primary residence for three years.
Each Stateâ€™s guidelines vary but find here the most common.
MCC, Mortgage Credit Certificate, is available with fixed or adjustable rate conventional conforming (i.e., Fannie Mae or Freddie Mac saleable) FHA, VA, Rural Development mortgages. MCC Fees
The nonrefundable MCC fee is $650 and it is collected at the time of loan closing.
As with any program, there are qualifying rules and regulations. MCC eligibility requirements include:
New Loans Only
The MCC is available with new purchase loans only.
Borrowers must not exceed these Maximum Annual Income Limits:
Acquisition Cost Limits
Borrowers must meet these property acquisition cost limits. Acquisition cost limits of a single-family residence must not exceed the following:
This varies for each state
Single-family existing homes, new construction, manufactured homes (permanently) affixed or on leased land).
Business Use Limits
No more than 15% of the residence may be used for trade or business purposes.
The MCC is valid for the life of the loan, so long as you remain the owner-occupant of the residence.
Varies from State to State
A recapture tax may apply only in the event that â€“ you sell your home in the first nine years, and â€“ your income has increased significantly, and â€“ you have a substantial gain on the sale. IRS Form 8828 explains how the tax is calculated.
Refinancing Your Property
In many states the MCC can be carried over to the new loan.
Also Read #9 MCC Tax Benefits for First Time Home Buyers 2013
Article #8 for your State scroll way down the left column to #8
Best of Luck, Stephen Webber
The article is not signed by an author and it is misleading.
At the moment (2012/13) there is no Tax Credit for the first time home buyer besides the already mentioned MCC.