Gift Money For Down Payments And Closing Costs
Very often, home buyers do not have enough of their own money to pay for the down payment and fees associated with buying a house. A great way to overcome that is by using gift money for down payments and closing costs.
If you don’t have the money for the down payment and closing costs yourself, you can get a gift from a relative to pay them. This applies to all the types of loans we provide for a primary residence, which is a house you will live in. Conventional loans, FHA loans, and VA loans all allow gift money for down payments and closing costs.
The gift can be for any amount, as long as it’s from a relative of one of the buyers.
You can also get a gift from a domestic partner, as long as they live with you and will continue to live with you.
We need to show that the money came from a relative and that it is actually a gift, and we need certain documentation to prove that. Here’s what we generally need when a gift is involved in a home purchase:
- A gift letter, signed by you and the person giving you the gift, stating that the money does not have to be repaid.
- A copy of the donor’s bank statement showing that they have the money to give you.
- A copy of your bank statement showing that the gift money for the down payment was deposited into your account.
That’s it! We do many transactions each year that involve gift money for down payments and closing costs and they are extremely easy to do. Just let us know up-front that the money for the down payment or closing costs (or both) will be from a gift, and we can tell you exactly what to do to make things easy for you.