Did you know that down payment gifts from family or friends can be a big help—if you follow a few essential rules?
As an expert real estate agent in Englewood, I’m here to help you navigate the home-buying process! Here’s a quick guide to ensure your gift doesn’t hold up your home purchase:
✅ DO: Document the Gift
Lenders require a ‘gift letter’ stating that the money is truly a gift, not a loan. Example: If your parents are gifting you $10,000, they’ll need to provide a letter confirming they don’t expect repayment.
❌ DON’T: Deposit Cash Without Proof
Avoid depositing large sums of cash without documentation. If your gift isn’t traceable, it could raise questions with lenders. Stick to checks or bank transfers, and keep records.
✅ DO: Know the Rules for Gift Givers
Certain loan programs only allow specific people, like close family members, to gift you funds. Example: A cousin may be allowed, but a friend might not qualify. Always check with your lender to confirm.
❌ DON’T: Assume Any Gift Amount is Fine
Some lenders have limits on how much can be gifted. Example: FHA loans allow your entire down payment to be a gift, but some programs require you to contribute a portion yourself.
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