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JJ
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Post subject: gift letter |
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| If we are being given $10,000 as a gift for our down payment, do we have to use all of the money on a down payment? On the gift letter, it asks how much money is given. What if we are able to make a smaller down payment and choose to use the rest for fixing things how would we write that on a gift letter? |
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eric1
Community Experts
Joined: 04 Jan 2009
Posts: 1414
209.96 Dollars($)
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The lender should have a gift letter that you can fill in. Most of them do not require you to state exactly what you are using those funds for. Typically people use them for a combination of down payment and closing costs. many banks require that you have some funds of your own in addition to the gift funds.
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msnover92571
Joined: 10 Feb 2009
Posts: 145
Location: California
0.45 Dollars($)
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| Does this actually lower the loan amount? |
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eric1
Community Experts
Joined: 04 Jan 2009
Posts: 1414
209.96 Dollars($)
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feeling stressed
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0.10 Dollars($)
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| I'll make this quick.... Ex and I broke up, sold the house. In order to obtain our mortgage her mother gave us X amount if money and the three of us signed a gift letter. Now she wants to take me to court to get half of it back plus interest as she took the cash from her line of credit. She claims that a gift letter does not re-characterize the loan into a gift. Anyone know if there's any truth behind this? Am I screwed? |
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eric1
Community Experts
Joined: 04 Jan 2009
Posts: 1414
209.96 Dollars($)
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If all she has is the signed gift letter, then technically you do not owe her the money unless you signed a seperate document indicating that you WOULD repay her with interest.
This will all come down to your morals. Whether you believe you owe the money. If you got that money back after the sale of the home, then the right thing to do would be to return your portion to her.
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 9749
Location: bloomfield, ct
35.02 Dollars($)
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the idea of "gift" is precisely that - money (or other goods) given for which no repayment is expected, or required. now, we all realize that in working with borrowers in the mortgage industry, there are some whose gifts are, in fact, loans; but masquerading as gifts so as to comply with specific guidelines that allow loans to be approved.
as eric noted, if a gift is proferred and the home is subsequently sold, especially in a case where there's a breakup in a relationship, one might feel a moral compulsion to repay the portion of the gift that came from the other partner's parent or family member. again, unless there is some sort of legal documentation that requires repayment of this "gift" then there'd be no legal need to repay it.
how you handle this is up to you.
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George M. Akerley
Loan Consultant
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anonymous1979
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0.10 Dollars($)
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Post subject: gift money |
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| Although gift money can not be expected to be returned or implied, is there anything wrong with paying it back? |
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adonis
Joined: 22 Oct 2005
Posts: 4719
Location: ALASKA
255.10 Dollars($)
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Welcome anonymous,
There is nothing wrong in paying back the gifted money. But if you pay it back, then it will not remain a gift anymore.
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Procrastination is the enemy of your financial success |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 9749
Location: bloomfield, ct
35.02 Dollars($)
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anonymous, i agree that there's nothing wrong with paying back a gift. often, i'm sure, people will realize an increase in their lives that allows them to repay what was truly a gift.
consider it a re-gifting. i think it's a lovely way to say thank you for the original gift. and, by the way, it would have no impact on your mortgage, as your repayment is (it sure seems to me) purely voluntary.
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George M. Akerley
Loan Consultant
860-221-5044 |
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Eric 45
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Post subject: Gift question - posted as a response, meant as a question! |
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| I am gifting some money to my brother for a house, I don't expect it back. My brother said that the lender is asking for proof of where the gift is coming from. I know this may sound weird but I currently have it in a safety deposit box and not in an actual account. How do I "prove: where I am coming up with the funds?? |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 9749
Location: bloomfield, ct
35.02 Dollars($)
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eric, although i understand your desire to have your money "safe" that's not a good way to document funds you are giving as a gift to someone buying a home. the lender wants to see that you had the funds in the first place, in order to provide the gift. i'd hope that you can find a way to provide them with some sort of verification of where your funds came from, but bank account verification is by far the best method.
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George M. Akerley
Loan Consultant
860-221-5044 |
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Eric 45
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0.10 Dollars($)
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| So if I deposit this money into my personal account then just do a cashier's check or something??? Thanks fo rthe help. |
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The Kid
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| We will be closing in a few weeks. Meanwhile some money is starting to come in from my Dad's estate from the sale of some of his household items. At this point in time if we put that $3,000 in our bank account do we have to prove were it came from? |
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adonis
Joined: 22 Oct 2005
Posts: 4719
Location: ALASKA
255.10 Dollars($)
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Welcome,
To Eric,
Yes, you can deposit the money in your personal account and then issue a check to your brother.
To Kid,
I think you are planning to use the money coming from your father's estate as a down payment towards the mortgage. In that case, you will have to show a document to the lender in order to prove where it came from.
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Procrastination is the enemy of your financial success |
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