One of the major benefits to purchasing a home with a mortgage are the Mortgage tax credits that you can take, including the interest that you pay on your mortgage. In NC we offer “additional” Mortgage Tax Credits for qualifying First Time Home Buyers.
Many first time home buyers don’t know what mortgage related expenses can be deducted (like property taxes) and, more importantly, which ones can no longer be deducted.
Additionally, most mortgage companies in NC don’t offer the First Time Home Buyer Tax Credits that we do!
Receive A Tax Deduction For Interest Paid On The Mortgage
The most common mortgage tax credit many First Time Home Buyers hear about is the interest paid credit. This allows borrowers to deduct the cost of the interest paid on their mortgage on their tax returns, which in many cases is the largest tax break available to homeowners.
Interest paid deductions on taxes are available to second mortgages as well as first time mortgages and are available on home equity lines of credit as well as home equity loans.
Mortgage Tax Credits for First Time Home Buyers in NC
In addition to the Mortgage Interest Deduction, first time home buyers in NC (meaning anyone who has not owned a primary residence in the last 3 years) can qualify to receive up to $2000 in Mortgage Tax Credits. These credits come directly off of the Federal Taxes you owe, and do not replace, or diminish your ability to also tax your tax deduction for Interest Paid.
The Mortgage Tax Credits in NC are applied for with your mortgage – so you must work with a lender who offers the program. You can’t buy a house, and then apply for the program.
The Mortgage Tax Credits for first time home buyer do have income limits that vary based upon the county you buy a house in, and the statewide maximum sales price in 2022 is $385,000. As long as you live in the house, the mortgage tax credit is available to you. On a Government Mortgage Loan Program, we can use the credit to help you qualify for a slightly larger home.
NOT ALL MORTGAGE COMPANIES IN NC OFFER THIS PROGRAM – shameless plug, that’s why you should call us 919 649 5058
Mortgage Insurance Is No Longer Tax Deductible
Unfortunately, as of 2014 any mortgage insurance (PMI) paid is no longer considered tax-deductible. This came as a shock to many borrowers who planned their finances around receiving the tax credit.
Although mortgage insurance is no longer tax-deductible, there are still other home related deductions that can be taken advantage of. Real estate taxes can be deducted the year they are paid and discount points purchased at the time of the sale can also be used as a deduction.
The IRS treats discount points as mortgage interest that is pre-paid and allows deductions on certain loan types.
The tax laws are always changing and differ from state to state, so it is advised to contact an accountant with knowledge on mortgage tax laws to provide more information on which deductions you qualify for.
If you are a first time home buyer who thinks you might qualify for the Mortgage Tax Credits in NC, don’t waste your chance! Almost every loan we do has a mortgage tax credit on it! There is a fee charged by the NCHFA for the program, though it’s small, and the minimum credit score is 640. But Darn! It’s $2000 a year! Don’t waste that!
REMEMBER not all NC Mortgage Companies Offer this program we are especially finding that the Mortgage Folks that the New Home Builders are using do not offer this program!
Still have questions about Mortgage Tax Credit in NC for First Time Home Buyers? Leave a comment below, or call Steve and Eleanor Thorne 919 649 5058 we’d love to help you make your dreams of home ownership come true with a mortgage loan that’s right for you! Connect with us on Google Plus and Facebook 
Great advice here for first time home buyers. I really enjoyed this tidbit, “Real estate taxes can be deducted the year they are paid and discount points purchased at the time of the sale can also be used as a deduction.” Very intriguing, well written article. Thanks for sharing!
Hello, are there any tax credits and down payment assistance that I may qualify for if my Mortgage Co is outside of NC? I am buying a home in Charlotte.
NO. NC Mortgage companies will need to help you with this. If you want to apply with us, call 919 649 5058
THANK YOU!!! YOU ARE MY HERO!!!
Hi, I’m interested in purchasing a house in the Raleigh/Durham area (or Cary). I make 80,000 dollars per year, I have a 750 credit score. I’m currently living in the Annapolis, MD area. I don’t have the means of making a 20% down payment right now though. I’ve read about FHA loans and NCFHA loans. I was wondering what is your advice on the best way to go about doing this.
Samuel! Call us! There are multiple programs that you should qualify for in our area that don’t require a down payment (USDA) or would only require a 3% down payment. 919 649 5058 Congratulations! I love Annapolis, but I think you will love living here too!
Under the compromised tax reform bill as of this morning, 12/14, is the MCC still eliminated as of 12/31/2017?
As of the version passed on 12/19 if was back in. Waiting for further notice.
Hi Eleanor
I live in NJ but am thinking of investing in a home in the Greensboro NC area. I have family there an would like to purchase a home when I visit for vacation or get always with my family. I refuse to purchase a home in NJ due to the high property taxes. Will I be considered for any grants if I live in NJ and purchase a home in NC ? Thank you.
Franklin
Franklin, you will not be considered for the NC Housing Programs, as this would be considered a second home. Call us for more options.
We qualified for a MCC..but our tax liability will be roughly $500 so it may not change or refund amount. We cannot find our MCC paperwork with certificate number. Should we just leave it out of our tax return.
You need to contact NC Housing – I believe they can help! (919) 877-5700