Understanding Mortgage Credit Certificates

TEMECULA, CA, Aug 19, 2014—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, Mike Rangel, REALTOR® at CENTURY 21 Award gives us the rundown on a popular mortgage option: the mortgage credit certificate.

(Image via Freedigitalphotos.net)

“A mortgage credit certificate, or MCC, makes it easier for eligible buyers to qualify for a mortgage loan,”
explains Rangel. 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 Rangel, 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 Rangel.
• 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 Rangel. More information is available by calling your local housing or redevelopment agency, or contacting your real estate agent.

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For more information on mortgage credit certificates, please contact Mike Rangel at mikerangel@verizon.net, (619) 846-9487, or CENTURY21Award.com/agents/MikeRangel

For more real estate information, please contact CENTURY 21 Award at info@century21award.com, (800) 293-1657, or CENTURY 21 Award.com