Homes are more expensive than ever. Financial help in the form of a financial "gift" from others is increasingly common. However, many people who want to gift money for a down payment do not have funds available. That's where Dwelling Dollars can help. Here's a breakdown of how it works:
Mortgage regulations allow you to receive financial gifts from relatives or friends for your down payment or other home-buying expenses. These gifts must be genuinely given without any expectation of repayment. The person providing the gift needs to sign a statement confirming that the money is a gift and not a loan.
A Dwelling Dollars loan could be a helpful option for funding gifts. This loan type offers terms up to 12 years, which can result in lower monthly payments. This makes it more affordable for many people to contribute as a gift without straining their finances.
Different types of loans (like FHA, VA, conventional, etc.) have varying rules about who can give a gift and how much can be gifted. It's essential to check the specific rules for your type of mortgage. Click here for a guide by loan type.
Make sure that all documentation is properly handled. Your mortgage lender will likely require a gift letter stating that the money is a gift and not a loan. This is crucial for ensuring that the gift is accepted as part of your mortgage application.
Wiring money just before the purchase is complete will usually require less documentation than money provided well before the purchase. Sending directly to the title/escrow company handling the paperwork may be best. Lenders want to trace the money and if it has been in the buyer’s bank account for several months the lender may want to see statements back to when the money was deposited. Confirm the best method and required documentation with your lender, they may have specific requirements.