Saturday, November 03, 2012
A Heads Up on Down Payment Gifts
Ready to buy your first home? Have a down payment ready to go? Before you apply for that mortgage, here’s something you should know about disclosing the source of your down payment.
Q: Part of my down payment was a gift from my parents. How will this impact my mortgage application?
A: It depends on the type of mortgage you’re applying for.
You should be prepared to explain your gift with documentation. While FHA loans typically will permit a down payment from a family source, your more conventional mortgage will expect at least 5% of the funds to have come from you.
One of the keys to ensuring this process goes smoothly is having documentation to back up your claim. Bank statements showing the source of the money (and when you received it) are a good place to start, along with a letter signed from your generous benefactor declaring the gift.
As a rule, you should be careful of any large deposits to your account (besides your regular pay).
I urge you to talk to a mortgage professional for complete details as they pertain to your specific situation.
Need a referral to a qualified mortgage broker? I’d be glad to share with you the names of people I know and trust. Contact me today for a referral: Jim Armstrong - 978-394-6736
or email me