Are you thinking about using money from a relative to go towards the purchase of a home? Let’s talk about what you need to make this happen! My buddy Chris Boston is will help us break it down.
How to Use Gift Funds When Buying a Home
What are Gift Funds?
Gift funds are monies that are given to the borrower to go towards that individual’s down payment or closing costs.
Do I need to do anything special in order to use Gift Funds?
Those funds will have to be sourced, meaning that we will have to show where those monies came from. In that case, we would have to get either a bank statement or some type of document from the bank, showing that they gift funds that had been given to the borrower have been sourced. In addition to that, we’ll also need a gift letter. Now, the gift letter typically is provided by the bank, but the borrower will need to fill it out and then both parties will need to sign off on the gift letter, as well.
So, it’s important that you get the gift, but it’s more important that the gift can be sourced by the bank.