Friends and family want to give you money towards your home down payment. Follow these guidelines to comply in advance with lending guidelines.
- Federal tax law, each person can give up to $13,000 to any one other person in any calendar year. A married couple can give up to $26,000 to another person. If a married couple is giving to another set of home-buying partners, the total gift towards the down payment tops out at $52,000.
- Give in late one year and early in the new year to pile up two year’s limits in time for one house purchase.
- Lenders will require proof that the gift is actually a gift and not a loan in disguise.
- Get the money into your savings at least 60 days before you apply for a preapproval.
- Any gift of $1,000 or more needs to be documented. A simple letter that states the date, the amount of the gift, and that the gift is a gift, signed by both the recipient and the donor, is all that’s required.
- You can get a form from a lender or simply write a simple statement that the giver gave you that amount and that there is no obligation for you to repay the funds. “. “That’s all you have to certify, that these funds are not loans,” says Keith Gumbinger, vice president for mortgage information website HSH.com. If you are at a party or shower, bring the letter and have everyone add their amount and sign on the spot. Keep the gift letters with your other income documentation so you are fully prepared when it’s time to apply for a mortgage.
2 comments:
I wonder if it is the same in the UK - you can give a certain amount of cash as a gift but not sure lenders will take into account a gift or not.
You brought up a lot of good points. I guess a lot of people will glad to read this. Excellent post and very helpful.
Post a Comment