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We're purchasing a home and my mother wants to gift us $30,000 out of the $45,000 needed for our down payment. My husband and I have the remaining $15,000. I heard that you either had to have the 20% yourself OR get the full 20% as a gift. Is that right? Or can my mother gift us part of the money?
Also... What kind of documentation besides the gift letter will my mother need to provide? Does a conventional loan have the same requirements as a FHA?
I'm in the same boat as you. I was told they need to provide a bank statement as to assure it's not from a loan and nothing on the statement can be blacked out or removed. But there is another way because most people freak out with why someone needs to know their history. So have their bank type up a letter worded the same as the gift letter. And that the money did not come from a loan or any type of repayment. Provide this letter and the gift letter to who ever is working on your loan.
As for your last question I have no clue. I'm just telling you what was told to me by the person handling my loan process.
We're purchasing a home and my mother wants to gift us $30,000 out of the $45,000 needed for our down payment. My husband and I have the remaining $15,000. I heard that you either had to have the 20% yourself OR get the full 20% as a gift. Is that right? Or can my mother gift us part of the money?
For a conventional loan at least 5% of the down payment must come from your own funds and you can get a gift for the rest. OR, you can get a gift for the full 20%.
Also... What kind of documentation besides the gift letter will my mother need to provide? Does a conventional loan have the same requirements as a FHA?
not the same as FHA. for conventonal you just need a signed gift letter. for FHA, the parent actually has to provide a bank statement showing that they have the funds in addition to the gift letter.
As said they don't need to provide a bank statement if they have their banker provide a letter stating the funds are from their own money and not from a loan or any type of repayment.
Is it different if it's a second home? My banker just told me that if it's a second home I either need to have the whole 20% or the whole 20% needs to be a gift... She didn't sound too sure of it though. Any ideas???
That sounds ridiculous. Why can't someone gift any amount they choose?
Borrowers who use funds to purchase a home other than their own have a higher default rate.
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