If you're considering buying your first home, here's another incentive for you. This week, New York State introduced another tax credit for first time homebuyers.
It's called the Mortgage Credit Certificate. It allows home buyers to take a dollar-for-dollar federal income tax deduction of 20% of mortgage interest paid each year. The remaining 80% of the mortgage interest would still be treated as an itemized tax deduction- as usual.
Governor David Paterson says the average homeowner could save about $1,520 per year for the first 10 years of the mortgage. This new tax credit would be on top of the federal tax credit of up to $8,000- which is due to expire at the end of November.
A first time homebuyer is defined as one who has not owned a home during the last three years. For the New York State Mortgage Credit Certificate, buyers must get a fixed rate mortgage with a partipating lender. So far, Wells Fargo, Bank of America and M&T Bank have signed up and others are expected to take part.
There are income and purchase price requirements, depending on where you live. For Ulster County, the annual income limit for a household of up to two people is $83,640 and for a household of 3 or more, the limit is $97,580 and the purchase price must be below $354,970 for single family homes. In Orange and Dutchess Counties, the income limit for a household of one or two people is $97,061 and for a household of 3 or more the limit is $111,620 and the house must be purchased for less than $387,740 for a single family. Purchase prices can be higher for 2, 3 and 4 family homes.
The program is expected to be available by the middle of September. If you currently have an offer on a home, you can still apply for the credit. If you don't have an offer on a house and would like to take advantage of each of these tax credits, give me a call today so we can get looking for your first home. Time is running out to save with the federal tax credit of up to $8,000.
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