VACAVILLE, CA, Apr 26, 2024—The process of obtaining a mortgage can be lengthy, and confusing. With so many different mortgage options available, it's easy for hopeful homebuyers to feel overwhelmed. In the following article, Stephen Spencer, Bev Dorsett & Sue and Steve Kappel, Broker/Owners of Coldwell Banker - Kappel Gateway gives us the rundown on a popular mortgage option: the mortgage credit certificate.
“A mortgage credit certificate, or MCC, makes it easier for eligible buyers to qualify for a mortgage loan,” explains Sue and Steve Kappel. Offered by many city and county governments, these certificates allow first-time buyers to take advantage of a special federal income tax write-off, which can be incredibly helpful.
Under MCC programs, the lender can reduce the housing expense ratio – the percentage of gross monthly income applied toward housing expenses – by the amount of the tax savings. Normally, lenders reject loans if the housing expense ratio is too high.
According to Sue and Steve Kappel, program requirements for MCCs vary, although most adhere to the following guidelines:
- The buyer must live in the home being purchased with an MCC-assisted mortgage.
- Total household income cannot exceed certain limits.
- The buyer cannot have owned a principal residence within the past three years. “This restriction may be waived if a property is purchased within a certain targeted area," notes Sue and Steve Kappel.
- The purchase price must fall within an established limit.
“When looking to obtain a mortgage, it's important to explore all of your options,” says Sue and Steve Kappel. More information is available by calling your local housing or redevelopment agency, or contacting your real estate agent.
For more real estate information, please contact Coldwell Banker - Kappel Gateway at info@kappelgateway.com, 707-427-5344, or Coldwell Banker - Kappel Gateway.