Having trouble saving enough cash for your down payment? This hurdle to homeownership just got easier as you may now use a gift for 100% of your required down payment. This is big news as previously you were required to contribute 5% of your own funds if the down payment was less than 20%. This new financing guideline on conventional loans has the potential to help a large number of potential buyer’s especially first timers.

When accepting a down payment gift it’s important to follow the correct procedure in order for a gift to be accepted. First off, a down payment gift may only come from a relative, such as a spouse, parent, child, or other relative (by blood, marriage, adoption, legal guardianship, a fiancé, fiancée, or domestic partner).

Secondly the donor will need to provide a gift letter which includes the donor’s name, address, telephone number, and relation­ship to borrower, the amount of the gift, the date the funds were transferred, and that no repayment is expected.

Lastly make sure you keep a copy of the gift check, a copy of deposit slip, and evidence the gift funds were deposited with a bank statement or printout.

For more information on down payment gifs or any other mortgage questions don’t hesitate to contact me, I am here to help.