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 2015 is $245,000. 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