People Talking Hilltop Securities

The federal government allows every homebuyer to claim an itemized federal income tax deduction for all of the interest paid each year on a mortgage loan. An MCC makes this benefit to the homebuyer even better: a certain percentage of the mortgage interest will be a credit - that is, a dollar-for-dollar reduction of the homebuyer’s tax liability. The remaining mortgage interest will continue to qualify as an itemized tax deduction.

The specific amount of the MCC credit depends on how much interest you pay on a mortgage loan obtained from your lender through the program. However, the amount of the credit cannot be more than your annual federal income tax liability after all other credits and deductions have been taken into account. Unused MCC credit can be carried forward three years for tax purposes.


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