Thomas Murphy - Pine Shores Real Estate



Posted by Thomas Murphy on 12/29/2013

If you are looking to buy a home you may be wondering how you will be able to come up with the down payment. One way that many buyers come up with down payment money is from gifts.  If you are planning on using gift money to help buy a home there are some guidelines you will need to follow. Here are some simple rules: 1. Get a Gift Letter If you are getting gift money to help you buy a house you will need a gift letter. The letter has a few requirements:

  • Have the letter hand-signed by you and the gift-giver
  • State the relationship between the buyer and the gift-giver.
  • State the amount of the gift.
  • State the address of the home being purchased.
  • A statement that the money is a gift and not a loan that must be paid back.
  • A statement that says: “Will wire the gift directly to escrow at time of closing.”
2. Document a paper trail Mortgage underwriters want proof of where the money came from and where it went. Get copies of transactions showing the withdrawals and deposits. You will also need to make sure that the transaction is for the exact amount of the gift. Following these simple guidelines will get you to the closing table hassle free.