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The down low on using GIFT funds for down payment…


Many types of mortgage financing allow for GIFT FUNDS to be used towards down payment.  The basics?
* Gift funds need to come from a blood relative (“donor”)

* The “donor” needs to be willing to provide the “source” of the funds.  This can be a bit tricky as many times the relative does NOT want to provide bank statements or asset statements to show where the money came from.  There is no way around this so prepare for it from the beginning.

* The “donor’s” bank statement can not show any LARGE deposits into it in the statement period.  The reason for this is the underwriter wants to see that the “gift funds’ are not borrowed funds requiring a repayment.

* The “donor” will sign a gift letter stating they are gifting the funds from Account “X” and that the funds do not have to be repaid.

* Those funds should then be wired directly to the escrow company handling the transaction.  This helps to avoid having to “paper trail” the funds through the borrowers account and again to escrow.  If the “donor” sends the funds directly to the escrow company it eliminates this step.

Remember, on FHA loans, 100% of the down payment AND closing costs can be gifted.

Be sure to check on the specific type of CONVENTIONAL loan you are qualified for as to the allowable “gift funds” per your program.

Ready to get started?  You can apply ONLINE conveniently at www.fcfs.net

If you have any questions, feel free to contact us at 602.294.9288

or E-mail:  mortgagedr@fcfs.net

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Having a dream is good, Owning one is better!

Leslie Nilsen

Owner/Broker

First Class Financial Services, proudly Arizona mortgage lending since 1999.

602.294.9288(O)

602.294.9830(F)

www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

 

 

 

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