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First-Time Homebuyers Tax Credit | Martini Mortgage Group

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Many first-time homebuyers in North Carolina may be eligible to save up to $2,000 a year with the Mortgage Credit Certificate (MCC) offered by the Martini Mortgage Group in partnership with North Carolina Housing and Finance Agency (NCHFA).  This tax credit is not just for the first year, it is up to $2,000 every year as long as the home remains your primary residence.  

A MCC allows eligible first-time homebuyers to receive a federal tax credit of 30% of the mortgage interest paid annually on existing homes (50% on new construction). If you are one of the many that will qualify, you could save up to $2,000 per year on your federal tax liability.

Martini Mortgage Podcast Special Episode 172: Tax Credit 

Difference between Tax Credits and Tax Deductions

Understanding the difference between tax credits and tax deductions can help reduce your tax burden. A tax credit directly reduces the amount you owe to the government, while a tax deduction reduces your taxable income. With the MCC you are able to get both, assuming you itemize your tax return.

Imagine that after all eligible deductions are taken out of an individual’s income, they come to be taxed on $50,000. For example, a tax credit of $2,000 in this case would help reduce the tax liability from $5,000 (at a rate of 10%) to $3,000 – for a tax savings of $2,000 overall.

A tax credit directly reduces the amount of tax you owe dollar-for-dollar.  So a $2,000 tax credit lowers your tax by $2,000. 

Kevin Martini | Certified Mortgage Advisor and Raleigh Mortgage Broker

On the other hand, if this person were able to have their taxable income reduced from $50,000 to $47,500 through a tax deduction of $2,500 – their tax bill would be significantly lower at just $4,750 (from previously calculated: 10% x 50000 = 5000). Clearly understanding the difference between tax credits and tax deductions could result in significant savings for individuals or companies who are filing returns with the government.

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To learn more about tax benefits of owning a home and having a mortgage, check out this informative article called: Tax Benefits to Owning a Home and Having a Mortgage

Are you eligible?

You may be eligible if:

  • you are a first-time homebuyer or military veteran or buying in a targeted census tract
  • you meet the income limits and sales price limits
  • you are purchasing a home in North Carolina
  • you will occupy the home as your primary residence within 60-days of closing
  • you are a legal resident of the U.S.

To determine your eligibility and property eligibility, contact either Kevin Martini or Logan Martini with the Martini Mortgage Group.

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certified mortgage advisor kevin martini

What You Need To Do Before Buying a Home in Raleigh

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Are you thinking of buying a home in Raleigh? Before you dive into the process, it’s important to make sure that you are prepared for the journey. Here are three Martini Mortgage Group key things that you can do to get ready to buy a home in Raleigh or anywhere in the U.S. for that matter.

Prepare Your Credit

Before applying for a mortgage loan, it’s important to make sure your credit is in good shape. Mortgage lenders typically require a good credit history for you to qualify for a mortgage. This means having several credit cards and installment loans with payments made on time for the past two years, as well as making all rent payments on time during that period.

A good credit score will ensure that you have access to better mortgage rates and loan terms. You can look at your free credit report from the 3 major bureaus (Equifax, Experian, and TransUnion) once per year as well as order copies of your credit reports from each bureau through annualcreditreport.com. It’s important to review all of your reports closely and address any discrepancies or errors with the respective bureaus.

For more information about credit, check out: Martini Mortgage Podcast | Episode 167 | Freeze it and opt-out

Prepare Your Cashflow

It’s also important to take a close look at your income and expenses before beginning the process of buying a home in Raleigh.

Make sure that you understand how much money is coming in and going out each month, so that you can begin planning for what kind of house payment you can afford on top of any other existing debts or expenses. Knowing how much money is available for down payments and closing costs will help set realistic expectations about what kind of home you may be able to purchase in Raleigh.

It’s also important to make sure your debt-to-income ratio is not too high. Most lenders require that your total monthly debt payments (including the new mortgage payment) should not exceed 43% of your monthly income. If your debt-to-income ratio is higher than 43%, consider paying down some debts before taking out a new loan or try finding ways to increase your income.

Prepare Your Savings

Mortgage lenders typically require you to have a certain amount of savings in reserve in order to qualify for a mortgage. Your savings should be in your account for at least two months in order to qualify, and any large deposits will need to be explained and documented.

The amount of the required savings will vary based on the loan program that you choose. However, a good goal is to save enough for a 3%-5% down payment, plus 1-3 months of mortgage payment reserves.

For example, if your new mortgage payments will be $3,000 per month, you should probably aim to save approx. $9,000 plus the amount of your down payment.

Start budgeting now so that when it comes time to make an offer on your dream house, you’re prepared financially too!

Martini Mortgage Group Bottom Line

Buying a home can be an exciting experience – but first you need to make sure that you are prepared financially by having good credit history and cashflow situation plus enough savings set aside for closing costs and fees associated with the purchase of the home. By following these three Martini Mortgage Group steps – preparing your credit, cashflow and savings -you will be well on your way towards becoming a homeowner in Raleigh!

If you have questions about buying a home or about securing the proper mortgage, let’s connect so you have expert advice on your side.

Kevin Martini

Kevin Martini | NMLS 143962 | Certified Mortgage Advisor | Martini Mortgage Group at Gold Star Mortgage Financial Group, Corporation | NMLS # 3446 | 507 N Blount St, Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | Kevin@MartiniMortgageGroup.com | Equal Housing Lender

Logan Martini

Logan Martini | NMLS 1591485 | Senior Mortgage Strategist | Martini Mortgage Group at Gold Star Mortgage Financial Group, Corporation | NMLS # 3446 | 507 N Blount St, Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | Logan@MartiniMortgageGroup.com | Equal Housing Lender

FHA Home Loans Explained by Raleigh Mortgage Broker Kevin Martini

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Are you a homebuyer looking to buy your first house in the Raleigh, NC area?

If so, then you may have heard about FHA Home Loans and the potential benefits of them. But what exactly are FHA Home Loans and how do they work? As an experienced mortgage broker in the Raleigh area for more than 15 years, this article has been curated to answer all your questions about this popular loan program.

In this article, I will share a glimpse of what you need to know about FHA loans including who can apply for one and some of their advantages both financially and long-term. I truly believe, armed with knowledge on FHA Home Loans from my helpful explanations, you’ll be able to make educated decisions that could potentially save you thousands of dollars over time and help you create generational wealth with the proper mortgage strategy.

What is a FHA Home Loan?

FHA Home Loans are a type of mortgage loan that is insured by the Federal Housing Administration (FHA). This government-backed insurance is designed to help qualified borrowers get into a home easier and with less money down. FHA loans do not require a high credit score and offers a lower down payment requirement than more traditional mortgage loans, making them an ideal choice for first-time homebuyers and repeat homebuyers too!

FHA loans are also incredibly flexible, as they can be used to purchase a wide variety of properties from single-family homes to townhomes and much more.

Advantages of FHA Home Loan with Kevin Martini

In terms of advantages that come with choosing FHA Home Loans, the most notable one is their low down payment option.

With FHA Home Loans, borrowers only need to put down 3.5% of the total purchase price as a down payment. This amount is significantly lower than what is typically required for more traditional mortgage loans and can be attained with a variety of financial sources such as gifts from family or funds from your local housing agency.

Another advantage of FHA Home Loans is that they are assumable, meaning that if you eventually decide to sell your home, a qualified buyer can assume the balance of the loan without having to go through the entire approval process again. This makes it easier for buyers and sellers alike, especially in today’s highly competitive housing market.

Things to know about the FHA Home Loan

It’s important to note, however, that FHA Home Loans do come with certain restrictions and requirements. The most notable of these is the Mortgage Insurance Premium (MIP). All FHA Home Loans require borrowers to pay an annual MIP in order to keep their loan in good standing. This does add an additional cost on top of the loan itself, but it’s important to remember that the MIP is what allows borrowers with lower credit scores and higher debt-to-income ratios to qualify for a loan in the first place.

Although there is no income limit with FHA Home Loans, the borrower must still demonstrate an ability to repay the loan. This means that having a steady job and verifiable income are important for obtaining approval.

Additionally, the property must be appraised by an FHA-Additionally, there is a loan limit in place which varies depending on the particular county and/or area of the country. In Wake County and Raleigh, NC, the loan limit for a one-family with a FHA Home Loan in 2023 is $502,550.

As you can see, there are a few things to consider when it comes to FHA Home Loans. Myself and the entire Martini Mortgage Group can help you navigate the process, so don’t hesitate to get in touch if you have any questions or would like to start the application process. Together we can find a solution that’s best for you and get you into your dream home as quickly and easily as possible.

The Kevin Martini Bottom Line

Now that you know more about FHA Home Loans and their potential benefits, it’s time to start your mortgage journey! If you’re ready to take the next step, contact me today so we can discuss your options and help you find the perfect home loan for your unique situation. With my trusted advice and expertise in the Raleigh mortgage market, I’m confident that you’ll be able to make an informed decision on which loan program is right for you.