If someone is giving you a monetary gift to help you meet mortgage lending requirements, follow these three steps.
Make sure the donor meets all of the requirements (besides being generous). The donor is the person giving you the money. That person must be a family member, domestic partner, or fiancé. The donor also needs to prove that they have the funds available. Documentation might include a copy of their cancelled check, or a signed letter from their bank confirming the funds are in their account. An underwriter may require more than one form of documentation.
Complete the gift letter to make sure everyone is on the same. LMCU will provide a form that the donor will need to complete and sign. It will ask for the donor’s name, address, bank account information, relationship to you, amount of the gift, and a signed statement that the monetary gift carries no expectation of repayment.
Transfer the funds into your account. (And don’t forget to say thank you.) Documenting the gift transfer is very important and should be done by check or wire transfer. If the donor writes a check, be sure to make a copy before depositing it, and don’t combine the deposit with any other transaction. Keep a copy of the deposit slip or confirmation, as well as an online transaction update or the next account statement to verify that the funds made their way into your account.
Sometimes you can use a gift to pay for your entire down payment. Other times, you might be required to pay at least 5% of the purchase price out of your own pocket. All of these requirements can change or vary at any time, so ask a Loan Officer if you have any questions or concerns.
Connect with one of our friendly, expert Loan Officers today at LMCU.org/Mortgage.
Topics: Home Financing & Renovation