Finding out if you qualify for a tax credit certificate is important, because that can give you more options when you want to buy a home. While they aren’t for everyone, they can be very helpful. Some are available all over the country, and others are state specific based on what those states’ governments want to offer. No matter which one you can get, though, a tax credit certificate gives you the opportunity to buy a house that you wouldn’t otherwise qualify for. Because it can often cost more to rent than to own in many areas, and there are other big perks to having a home of your own, there are several ways that a tax credit certificate, which is sometimes also called a mortgage credit certificate, can save you money.
1). What price home can you buy?
While there’s no specific price that you can or can’t spend on a home, this certificate is generally designed for people who have a lower level of income. They’re going to be buying more modest houses, some of which might need a bit of work. That doesn’t mean you can’t get a nice, safe home, but that you won’t be likely to get this certificate to buy a mansion. The certificate works by taking what you would pay in mortgage interest and crediting it back to you as income. By doing that, the income you would use to buy your house goes up. That lets you qualify for a house you wouldn’t have been able to get before. It’s designed to make sure that people who are close to qualifying for a home but can’t quite get there can go ahead and get into a home of their own.
2). What kind of interest rate will you get?
With the purchase of a home you get a mortgage, and in order to make that mortgage affordable you need to have an acceptable interest rate. Otherwise, the payments will be too high and you won’t be able to afford them or keep your home. The interest rate you’ll get with the certificate will be basically the same as you would get without it, but with a little higher level of income it’s possible that you can qualify for a better rate, as well. By keeping your credit good, you’ll have a better chance of a good rate, so your mortgage will be one that you can afford and feel comfortable with. A lot of people really want to own their own home, and this kind of program helps to make that dream affordable for them. Getting a good interest rate is part of that.
3). Is your mortgage smaller than rent?
Another way you can save money with this certificate is by paying out less for your housing every month. In a number of cases, the mortgage payment you’ll end up with is going to be less than the rent you’ve been paying. Especially in areas of the country where rents are very high, getting a mortgage can feel like an amazing deal. Many people pay hundreds of dollars less each month when they buy a home than they were paying when they were still renting. That’s an excellent way for them to have more money in the bank, and to be able to pay their bills more easily. The lower housing payment could be one of the largest benefits you’ll see if you get this kind of certificate and use it to buy a home of your own.
4). How does the certificate help with your bills?
By buying a house you’ll have bills, but you’ll also see your mortgage insurance credited back to you as income. With a little bit higher income you’ll not only be able to qualify for your home, but you also may be able to handle your bills more easily. Tax credits are generally always helpful, because they reduce the amount you have to pay and can lead to a bigger refund. Even though you’ll be paying the mortgage interest and then be getting it credited back to you, the fact that your mortgage payment every month will likely be much lower than what your rent was can make it easier to get your bills paid. That saves you money because you won’t have late fees and other charges to contend with when you’re able to pay your bills on time. It can also boost your credit score, making any future credit you try to get more likely to be approved, and at a better rate.
5). Will your homeowners insurance mean a bundle discount?
You can save money on buying a house if you use a tax credit certificate. One of the ways you can do that is through the chance of a bundle discount. For example, if you have insurance on your car and you buy a house, you “bundle” your home and auto policies together under the same insurer. That can provide you with a percentage discount, which is sometimes significant. Every little bit helps when it comes to saving money, and qualifying for a tax credit certificate can give you some unexpected ways that you can save.
