More Help for First Time Buyers
In the state of New York first time buyers will receive more financial help. Governor Paterson announced on September 1 that New York will offer a federal income tax credit. The NYS Mortgage Credit Certificate (MCC) will enable first time buyers to claim a tax credit equal to 20{0a8a364de4bdc182cd885a6012ac9d29a32bc2558b82915042b80d80d2f2dae4} of their annual mortgage interest costs, potentially saving the average home buyer about $1,500. each year.
MCC can be used to reduce a home buyer’s tax burden for every year the mortgage loan remains outstanding. With an MCC, 20{0a8a364de4bdc182cd885a6012ac9d29a32bc2558b82915042b80d80d2f2dae4} of the amount paid in mortgage interest becomes a tax credit than can be deducted, dollar for dollar, from a homeowner’s federal income tax liability.
Sample savings:
$150,000 purchase at 5.25{0a8a364de4bdc182cd885a6012ac9d29a32bc2558b82915042b80d80d2f2dae4}- principal and interest= $829.50
$829.50 x 360 months = $298,620.00
$298.620 – 150,000 purchase price = $148,620 interest
Tax credit over life of loan equals 20{0a8a364de4bdc182cd885a6012ac9d29a32bc2558b82915042b80d80d2f2dae4} of interest
20{0a8a364de4bdc182cd885a6012ac9d29a32bc2558b82915042b80d80d2f2dae4} of $148,620 = $29,724 income tax credit
For more information consult with your mortgage lender or REALTOR.