Paul's Bellingham Blog

My thoughts on Bellingham, the Real Estate market, and more

Washington State still has a First Time Buyer Tax Credit

No Comments »

 There is a little known tax credit in Washington state for first time home buyers! It is called a Mortgage Credit Certificate .It is a federal income tax credit (cash back) for the interest you are paying on your new mortgage. It can save you money monthly, with less dollars withheld from your paycheck every month. This tax credit is good for the life of the loan, which can save you thousands of dollars every year!

Here is an example:

On a $250,000 loan amount, at a 5% interest rate, that ends up being about $12,500 in interest paid in the first full year of mortgage payments. Now multiply that interest paid by 20%, and you have your tax credit ($2,500). Dividing $2,500 by 12 months, it is a savings of $208 a month in your first year!

Not all lenders are participating, so check with your lender to find out if they are participating. Or contact me for a list of local lenders I can recommend that can help.

Program guidelines include:

1-2 persons must make $70,000 or less annual income in Whatcom/Skagit County.

Family of 3 more must make less than $80,000 annual income in Whatcom/Skagit County.

$300,000 is the maximum purchase in Whatcom County.

$285,000 is the maximum purchase amount in Skagit County.

You must plan on owner occupying the home.

There is  a First Time Home Buyer class you need to take, hosted by the Washington Finance Commission. You can find dates and locations by clicking here.