Down payments are one of the largest hurdles in homeownership, especially amongst younger buyers. In the event you have not saved enough funds for the down payment to purchase a home, many lenders allow borrowers to purchase a home utilizing gift funds.
What are gift funds?
A gift giver (commonly a buyer’s parents) is providing funds to a home buyer for a down payment with no expectation of being repaid.
Keep these things in mind when utilizing gift funds:
• be upfront with your mortgage lender if you are receiving a down payment gift
• keep a paper trail of the funds changing hands
• before you can use gift funds for your down payment and or closing costs you need to submit a gift letter to prove your relationship with the gift giver and to show the funds are a gift and repayment is not expected.
I recently created a video that takes a deeper dive into Gift Funds which can be found on my Facebook page! Check it out by clicking HERE.
If you have any questions or want to start the home buying process don’t hesitate to reach out.
Torben Yjord-Jackson – Realtor
EXP Realty of CA, Inc.