Do You Need To Qualify For A Higher Mortgage Amount In North Carolina?
The State of North Carolina has a unique program for first-time home buyers. It allows the borrower to take immediate advantage of their mortgage interest, adding part of it back into their paycheck immediately. This in effect reduces the mortgage liability, which allows the borrower to qualify for a higher mortgage amount.
A Recent Example
A recent client of mine has a wife and 5 young children. They were bursting at the seams in the house they were renting and really needed a larger home. With his income he was only qualifying for a $107,000 mortgage and did not have any money to put down on a home. He was a first-time home buyer and was interested in a house that was new construction. It happened to be located in an area that also was eligible for a USDA loan, which is 100% financing with no mortgage insurance.
I arranged for them to get a Mortgage Credit Certificate, and since he was interested in buying a new home, he qualified to get 50% of his mortgage interest put back into his paycheck immediately. This allowed him to buy a $139,900 home. The builder paid the closing costs, and my client bought a new home with a total of $1,450!
The Basics of the MCC
- Maximum sales price of $240,000
- Maximum income allowed (in Mecklenburg County, call me for others): $75,000 for up to 2 wage earners in the home and $85,000 for 3 wage earners in the home
- 30% tax credit for existing homes
- 50% tax credit for new homes
- Maximum of $2,000 federal tax credit per year
- 3 years of tax returns required
- Balance of mortgage interest can still be claimed on tax return
- Good for as long as borrower stays in the home
This is a fantastic program and I will take care of all the details. Please contact me with any questions.