If you’re a first-time home buyer looking for ways to save money on your mortgage, you may want to see if you qualify for a mortgage credit certificate (MCC). This federal tax credit allows you to directly reduce the amount of taxes you owe and is distributed by your state or local government.
It’s important to note, Rocket Mortgage ® does not participate in issuing new or reissuing existing mortgage credit certificates (MCCs). Homeowners must contact the state or local government agency that issued the original MCC to find out how to claim the tax credit on a new mortgage.
An MCC can be a great way to save money on your mortgage if you meet the terms set by your local housing authority. However, there are a few drawbacks to consider before applying for an MCC.
An MCC is a federal income tax credit for lower-income borrowers typically reserved for first-time home buyers. When you receive an MCC, you can claim a dollar-for-dollar tax credit of up to $2,000 on the mortgage interest you paid on your home. You can claim the tax credit every year you’re a qualified homeowner, and there’s no lifetime cap on how much you can save.
The tax credit also allows you to reduce the amount you owe in federal taxes. An MCC is especially helpful if you pay a substantial amount of money in mortgage interest. If your interest payments are relatively low, an MCC won’t help as much.