What's the Difference Between Down Payment Assistance and a Mortgage Credit Certificate?

Hello, everyone. Welcome back to my video blog!

Last time we talked about down payment assistance. Today, I wanted to talk about a mortgage credit certificate.

What’s the difference?

For down payment assistance, you must qualify. If your income is too high and if you have owned a home in the past three years, you do not qualify.

The mortgage credit certificate is available to both first time homebuyers as well as non-first time homebuyers in federally designated target areas. You do not have to be low income to qualify...up to $118,000 for a household of 3 and you do not have to buy a lower cost home....up to $823,000. Depending on the state, the credit certificate amount varies. It is a dollar-to-dollar tax credit available to you as long as you stay in your house and pay your mortgage. For example, in California they will provide 20 percent of tax credit on the mortgage interest you pay per year.

So, let’s say your mortgage interest per year is $20,000, you would save $4,000! In turn, because your payment is lower, you can qualify for a larger mortgage and purchase a nicer home.

When you close the home, you give the certificate to your tax accountant who will then calculate it into your taxes and you will receive a refund!

This is a great program and very few people know about it! So, if you have any questions either about a mortgage credit certificate or down payment assistance, please give me a call at 626-643-7090. I'd love to explain more about how the process works!

Be sure to check out our next post; I'll tell you about what's happening in our current market!