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.