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When a home buyer moves from renting a home to owning a home, they will probably experience an income tax savings. When a 1st Time Buyer uses the MCC tax credit program, those tax savings can be substantially higher. The new buyer can receive several hundreds of dollars each month in tax savings which can be paid to them in their regular pay checks. This additional income reduces the burden of the new monthly payment for the home and should be considered as reducing the payment. Therefore, the Effective Payment is the monthly house payment less any additional tax savings the new buyer receives. This Effective Payment gives the new buyer a better comparison of their new obligation to their current rent payment. |
