Welcome to Home Mortgages
Bank Of America Home Mortgage Article
This is a selection made from among articles on Bank Of America Home Mortgage. For a permanent link to this article, or to bookmark it for future reading, click here.
from:
Homebuyers - How To Save Money With A Mortgage Credit Certificate
By Mike Bates
Mortgage Credit Certificates for home buyers
The Mortgage Credit Certificate (MCC) program was initiated by the U.S. Tax Reform Act of 1984. The program was designed for low and moderate income earners to buy real estate - usually their first home purchase. In Hawaii, the Hawaii Housing Finance and Development Corp (HHFDC) issues Mortgage Credit Certificates.
What the Mortgage Credit Certificate does.
The MCC reduces your federal taxes, leaving more of your income available to qualify for a mortgage loan. Thus you can qualify to buy a larger home with the MCC, or you can stick to the less expensive properties and just enjoy the tax savings.
How the Mortgage Credit Certificate works
Generally, a home buyer deducts his/her mortgage interest on schedule "A" of the federal tax return. Itemized deductions reduce your taxes by your tax rate. For example, if your tax rate is 15%, a $1,000 mortgage interest deduction will save you $150 in taxes. The mortgage credit certificate is better - $1,000 of mortgage credit will save you $1,000 of taxes.
Note: the MCC is applicable to 20% of your mortgage interest, the remaining interest continues to be deductible on Schedule "A" of your tax return. Example: with $10,000 in total mortgage interest for the year, $2,000 is a direct tax credit and $8,000 is deducted on schedule "A". The $2,000 tax credit will save you $2,000 in taxes. The $8,000 schedule "A" deduction (assuming a 15% tax bracket) will save you ($8,000 times 15% equals)= $1,200. Combine the two and that's a $3,200 federal tax savings!
What's the catch?
There are several potential catches:
- The amount of your mortgage credit cannot exceed your federal tax liability. If you cannot use the full MCC in the current year, the unused credit can be carried forward for three years to offset future tax liabilities.
- Not all lenders offer the MCC. Hawaii Banks with the MCC program include First Hawaiian Bank, Bank of Hawaii, American Savings Bank and Central Pacific Home Loans. HawaiiUSAFCU and Point Financial (a mortgage broker) also offer the MCC.
- The home you buy must be used as your principal residence when using the MCC. If you move to another home the MCC will be revoked and you can no longer claim the credit.
- You cannot have owned another principal residence at any time in the last three years prior to your home purchase using the MCC.
- If you sell your home within nine (9) years of purchase, you maybe subject to a recapture tax. If you're planning to sell in the near future this plan might not be best for you. There's a three-part test to determine whether an owner must pay the recapture tax. Check with your tax preparer to determine whether the tax will apply to you.
How do I apply for a Mortgage Credit Certificate?
Check with a lender who offers the MCC. Hawaii Income limits as of 2007 are as follows:
- County - Families less than 3 - Families 3 or more
- Honolulu - $89,400 - $104,300
- Maui - $85,920 - $100,240
- Kauai - $79,320 - $92,540
- Hawaii - $74,760 - $87,220
If you live in another state, please check with your lender or real estate agent.
Visit our website for more information about getting a mortgage loan from Hawaii banks and mortgage brokers.
Mike Bates is a realtor and Certified Public Accountant. He sells real estate throughout the islands with an emphasis on homes in Honolulu, Diamond Head and hawaii beachfront properties. Contact Mike for information about buying and selling homes as well as the Mortgage Credit Certificate.
Article Source: http://EzineArticles.com/?expert=Mike_Bates
http://EzineArticles.com/?Homebuyers---How-To-Save-Money-With-A-Mortgage-Credit-Certificate&id=841387
Bank Of America Home Mortgage Specific links
Watch Luxe TV Now!
- Anything and everything a girl could want to make her life better! All Free!
-- http://www.mevio.com/
Global News Videos - Browse, Search, Watch!
- Your source for news videos from around the world. Politics, sports, entertainment, business and more. Browse and search it all now!
-- http://www.blinkx.com/
Top 25 Hottest Female Athletes
- Check out the hottest women in sports. From Maria Sharapova to Danica Patrick, check out Hollyscoops annual countdown to these athletic beauties.
-- http://www.hollyscoop.com/
Watch Funny Videos!
- Click here to see funny videos, pictures, jokes, commercials, and more funny stuff from Comedy.com.
-- http://www.comedy.com/
TidalTV
- Today's Hit Shows. Classic TV. Plus the Best Shows You've Never Seen. Watch it all Now for Free on TidalTV.
-- http://www.tidaltv.com/
Bank Of America Home Mortgage News
Countrywide agrees to largest home loan aid program to settle suits - International Herald Tribune
Countrywide Financial has agreed to the largest program ever to modify home loans, as part of a settlement with officials in 11 states, just days after the U.S. government adopted a giant financial rescue package without any relief for distressed ...
Read more...Plan could help Nevada homeowners - Reno Gazette
Thousands of Nevadans could benefit from a settlement to modify troubled mortgages and help struggling homeowners stay in their homes, Bank of America officials announced Monday. The $8.4 billion settlement will affect nearly 400,000 customers ...
Read more...Barbara Desoer to Present at Bank of America Investment Conference - Forbes
CHARLOTTE, N.C., Sept. 8 /PRNewswire/ -- Bank of America Mortgage, Home Equity and Insurance Services President Barbara Desoer will deliver a presentation at the Bank of America 38th Annual Investment Conference in San Francisco on Monday, September ...
Read more...The Universal Appeal Of BofA - Forbes
When Wall Street goes on clearance, someone gets a bargain. As Lehman Brothers (nyse: LEH - news - people ) hurtled toward liquidation Sunday, Bank of America (nyse: BAC - news - people ) swiftly hammered out a deal to acquire its more attractive ...
Read more...Morgan, Goldman Lead Financials Surge on Bank Bailout (Update3) - Bloomberg
Sept. 19 (Bloomberg) -- Morgan Stanley and Goldman Sachs Group Inc. , the two biggest independent securities firms in the U.S., led financial shares higher after the government said it would take troubled assets off finance companies' balance sheets ...
Read more...Bank Collapse Catastrophe Warning - Sky.com
British bank Barclays had appeared to be the frontrunner to take over the struggling Lehman Brothers but has pulled out of the bidding, a source close to the deal said. And a consortium led by the Bank of America is reported to have also dropped out ...
Read more...Merrill's Thain, Montag May Get Payouts of $47 Million on Sale - Bloomberg
Sept. 16 (Bloomberg) -- Merrill Lynch & Co. Chief Executive Officer John Thain and trading-division head Thomas Montag may reap payouts totaling more than $47 million if they leave or are given lesser roles after Bank of America Corp. buys the firm ...
Read more...Home prices to fall on liquidity concerns: analyst - Reuters
(Reuters) - The collapse of Lehman Brothers Holdings Inc (LEH.N: Quote , Profile , Research , Stock Buzz ) and takeover of Merrill Lynch & Co Inc (MER.N: Quote , Profile , Research , Stock Buzz ) will cause liquidity in the credit market to shrink ...
Read more...Mortgage rates fall on Lehman Brothers, Merrill Lynch news - New York Daily News
The latest round of financial shockers didn't just send Wall Street traders scrambling--the problems also have consumers wondering if it's a good time to buy a home or refinance, given the impact on mortgage rates. Here's how experts weigh in on what ...
Read more...Blame It on the Bull: B of A Downgraded - CFO.com
Standard & Poor's announced it was lowering Bank of America's long-term counterparty credit rating from AA to AA- in response to news that the bank would acquire Merrill Lynch in an all-stock, $50 billion deal. The long-term ratings of the bank's ...
Read more...