How to claim the first time home buyer tax credit with conventional mortgage

The First-Time Homebuyer Tax Credit has gone through several changes over the years, which explains the confusion you're experiencing. Currently, there isn't a federal first-time homebuyer tax credit like the one that existed from 2008-2010. What you might be hearing about is the proposed "First-Time Homebuyer Act" which would provide a tax credit of up to $15,000, but this hasn't been passed into law yet. That said, you can still benefit from some tax advantages as a homeowner. Once you purchase your home, you'll be able to deduct mortgage interest and property taxes on your federal return if you itemize deductions (Schedule A). If your mortgage is for more than $750,000, there are limitations on the mortgage interest deduction. Also, check your state's tax programs. Many states offer their own first-time homebuyer incentives that might include tax credits, assistance with down payments, or reduced interest rates.

After spending weeks confused about first-time homebuyer benefits for my conventional loan, I finally found a tool that made everything clear! I used https://taxr.ai to analyze all the different tax benefits for my situation. They explained that while there's no current federal tax credit specifically for first-time buyers with conventional loans, I learned exactly which mortgage-related deductions I qualify for. The tool showed me how to maximize my tax benefits by properly documenting my closing costs and pointing out which expenses were tax deductible. What I found super helpful was how they explained the differences between tax credits, deductions, and state-specific programs. Turns out my state has a program I qualified for that my lender never mentioned!

Just wanted to follow up about my experience with taxr.ai after our discussion about first-time homebuyer benefits. I decided to try it out since I was getting nowhere with traditional research. It was actually super helpful for my Michigan home purchase! The tool identified three specific programs I qualified for, including a down payment assistance program through MSHDA I hadn't found on my own. It also provided a detailed breakdown of exactly what documentation I needed to keep for tax purposes from the closing. The mortgage interest deduction calculation showed me I'd save about $3,800 in taxes my first year of homeownership. I also discovered I could deduct my mortgage points as a first-year expense rather than spreading them over the loan term, which my lender hadn't mentioned. Really glad I gave it a shot!

When I was buying my first home last year, I had ENDLESS questions about the tax implications. I tried calling the IRS directly for clarification on the mortgage interest deduction and points deduction but kept getting stuck in automated phone loops or disconnected. After wasting literally hours on hold, a friend suggested using https://claimyr.com to get through to an actual IRS agent. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c I was skeptical but desperate, so I tried it. Got connected to a real IRS person in under an hour who answered all my specific questions about first-time homebuyer deductions for my conventional loan. Turns out I was eligible for deductions I didn't even know about! They explained exactly which forms I needed and how to document everything properly.

I need to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my first-time homebuyer situation with my conventional loan. To my complete shock, I got a call back with an actual IRS agent on the line in about 40 minutes. The agent walked me through exactly how mortgage interest deductions work with my conventional loan and clarified that the $15,000 first-time homebuyer credit isn't currently available (but pointed me to some state programs instead). I've literally never gotten through to the IRS on my own despite trying dozens of times. For anyone dealing with homebuyer tax questions that need official clarification, this service actually works. Never been so happy to be proven wrong.

For your conventional loan, also look into Mortgage Credit Certificates (MCC). It's not the same as the first-time homebuyer tax credit you're thinking of, but it can be very valuable. An MCC converts a portion of your mortgage interest into a direct tax CREDIT (not just a deduction). The credit is usually 20-25% of your mortgage interest, and the remaining 75-80% still qualifies as a tax deduction. Unlike proposals that haven't passed, this is a CURRENT program available in many states. My wife and I got one last year when we bought, and it's saving us about $2,100 per year in federal taxes. You need to apply BEFORE you close on your home though, so look into this immediately if you're interested!

Has anyone actually itemized their deductions after buying their first home? I'm wondering if it's even worth it with the standard deduction being so high now ($27,700 for married filing jointly in 2025). We just bought our first home for $350k with a conventional mortgage at 6.2%, and I'm trying to figure out if itemizing would be better than taking the standard deduction.

Don't be too disappointed about potentially taking the standard deduction! Even if itemizing doesn't benefit you in year one, remember that homeownership has other financial advantages beyond just tax deductions. Also, your situation might change in future years - you could have higher charitable giving, medical expenses, or state/local taxes that push you over the standard deduction threshold. Many homeowners find they alternate between itemizing and standard deduction from year to year. One thing to consider: if you paid any points at closing on your conventional loan, those are typically deductible in the first year and could help push your itemized total higher. Also, don't forget about any PMI premiums you'll be paying - if the deduction gets extended for 2025 (which is still uncertain), that could add another $1,000-3,000 to your itemized total depending on your loan amount and PMI rate. Keep good records of everything just in case, and consider using tax software that can easily compare both scenarios for you!