6 Rules for Using Gift Funds For Your New Home

If you are ready to purchase a home, it is time to consider which resources you will use towards the down payment and closing costs of your future home. Gift funds can make a huge difference in covering the cost of expenses linked with a home purchase, especially the down payment and closing costs.

If you are able to meet the minimum down payment required for your specific loan, you can use a gift fund from a relative, fiancé, or domestic partner. However, the gift cannot come from any person affiliated with the real estate agent or home builder.

Important steps to follow:
  1. Have the person giving you the gift fill out a Gift Letter! The letter should include the total dollar amount gifted, a statement that no repayment is expected, their information (legal name, address, and phone number are required), and their relationship to you.
  2. Make and retain a copy of the gift check.
  3. Obtain a copy of the deposit slip and a statement from your financial institution showing that the funds have been deposited into your account. Be sure to have the teller stamp and sign all pages, or if you are using an online statement, be sure to include the full account number.
  4. Obtain proof of the donor’s ability to give this gift with the most recent financial statement from the donor’s account (this should be the same account that the gift is coming from).
  5. Obtain a copy of the donor’s government issued photo ID (be sure to copy both the front and back).
  6. You will likely need to provide these materials to your lender during the underwriting process.
For more information on using gift funds or to use a gift letter template with Mortgage Center, click here.
Posted: 2/20/2018 12:26:17 PM by Kayleigh Carwile | with 0 comments