Home Buying in North Center>Question Details

Kendal Kirby, Home Buyer in Chicago, IL

Downpayment as a gift

Asked by Kendal Kirby, Chicago, IL Sat Oct 19, 2013

I have just gotten engaged and, as a gift, my parents have offered to give us money for a downpayment. We are in Chicago and want to know whether we would be able to apply this to our downpayment. What hurdles would we have to clear and would this have any effect on APR or other loan terms?

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Answers

26
We can make that work. For mortgage help, call or email for a free pre-approval in less than 10 minutes. We lend our own money and are licensed in 49 states.

We can do: FHA, Conventional, USDA, VA, HARP, Interest Only, Home Equity, Fixed, and Variable. Find out which product is right for you by calling Brad at (855) 415-5626.

Brad Neumann
Sr. Loan Officer
Crosscountry Mortgage Inc.
Toll Free: (855) 415-5626 ext. 5734
Email: bneumann@myccmortgage.com
NMLS# 948036
1 vote Thank Flag Link Fri Nov 15, 2013
Congrats! That's a pretty sweet engagement gift.

To answer your question, using those funds towards the down payment won't have any effect on APR or other loan terms. The gift will only affect your ability to qualify for the loan program.

Let me explain:

Some conventional loan programs require that the "minimum investment" come from your own funds. In other words, if the loan program requires at least 5% down, then the 5% must come from your own funds and your parents' gift can be applied on top of that.

On the other hand, many conventional loan programs allow for the entirety of the down payment to come from a gift so long as the down payment is equal to or greater than 20% of the loan amount.

In terms of documentation, most lenders will require a gift letter stating that the gift is in fact a gift and not a loan.

For FHA programs, the down payment can come from gift funds, but opting for an FHA loan program carries its own set of additional considerations to keep in mind, such as the additional cost of mortgage insurance, etc.
Web Reference: http://www.hippoteq.com
1 vote Thank Flag Link Mon Nov 11, 2013
You can use the funds for your down payment and this with not affect your APR
I have some great incentives for first time buyers and I would be happy to help
Sam Sharp
Senior VP of Lending
Guaranteed Rate
773-290-0455
1 vote Thank Flag Link Sat Oct 19, 2013
email me at jmichaels@remax.net I will send you my contact
0 votes Thank Flag Link Tue Nov 5, 2013
Best way to do it is have the person write you a personal check, this helps make it the easiest to document. Otherwise, you have to get more bank statements and could have to possibly prove other deposits. Call or email for a free pre-approval and free credit report.

We can do: FHA, Conventional, USDA, VA, HARP, Interest Only, Home Equity, Fixed, and Variable. Find out which product is right for you by calling Brad at (630) 639-1081.

Brad Neumann
Sr. Loan Officer
Mobile Phone: (630) 639-1081
Email: bneumann@myccmortgage.com
3130 Finley Rd. Suite 510C
Downers Grove, IL 60515
0 votes Thank Flag Link Fri Oct 25, 2013
Gift requirements vary based off the loan program being chosen.

For example for FHA can use a gift for 100% of down payment depending on investor driven overlays based of credit score. This is the same for conventional products unless purchasing a home that is a two to four unit property, a second home, or is labelled as a high balance loan. In these situations the borrower would need to make a minimum contribution of 5% down from their own funds.

Any questions feel free to contact me at any point.

Chris Diamond
NMLS: 771882
Diamond Residential Mortgage Corporation
847-775-2181
chris.diamond@thedrmc.com
0 votes Thank Flag Link Tue Oct 22, 2013
Typically the giftor writes a letter explaining the gift to the giftee and the lender accepts this. Different loans have different "gift limits" so site down with your lender to verify the limits.
0 votes Thank Flag Link Mon Oct 21, 2013
Hi Kendal,

Sam Sharp is your guy. If you have not already been pre-approved I highly recommend Sam Sharp and Guaranteed Rate. They fund their own loans and the customer service is second to none.
0 votes Thank Flag Link Mon Oct 21, 2013
Good Morning,

Call Miz Ramadani of Sierra Pacific Mortgage 708 499 5626
0 votes Thank Flag Link Mon Oct 21, 2013
Hi Kendal,
Our office suggests contacting the following bank rep who may even be able to provide you with 0% (zero) down 100% loan and No MI depending on your occupation.
Or explain how to utilize the gift from a related party.

Vice President / Sr. Mortgage Officer / Tom R. Callahan / thomas.callahan@53.com
Fifth Third Savings

Mr. Callahan has been recognized nationally as a leader within the mortgage industry and has assisted hundreds of Physicians within the Northwestern Memorial Hospital and Univ of Chicago Medical Ctr.

Best wishes to you! Tyler J. Jacobs / PhD
0 votes Thank Flag Link Mon Oct 21, 2013
Hi kendal

you should be able to use gift fund 100% in FHA and 75% in Conventional. no term or APR effect on gift.

congratulation

Omar Khamisa
Mortgage Loan Officer
NMLS # 369325
510-648-5535
0 votes Thank Flag Link Sun Oct 20, 2013
email me at jmichaels@remax.net and I can discuss options with you
0 votes Thank Flag Link Sun Oct 20, 2013
do not buy a house until your married
0 votes Thank Flag Link Sun Oct 20, 2013
Typically only fha loans allow gifts. And your parents will have to show where they received the money. But sometimes you can avoid these issues if you just keep all your money in your account and don't take anything out - then use your gift to pay your bills while you are trying to get a home. This may take time, but you can get his done.
0 votes Thank Flag Link Sun Oct 20, 2013
yes you can do that but I'd advise to call a lender:

Justin Lopatin – Perl Mortgage - jlopatin@perlmortgage.com - 847.345.0308
Michael Black – Winstrust Mortgage - mblack@wintrustmortgage.com – 773.426.6798
Matt Porter – Charter One Bank - Matt.Porter@charteronebank.com – 847.897.1030
Mike Caraga – GMA Consultants – gmaconsultant36@gmail.com – 708.359.6495
0 votes Thank Flag Link Sun Oct 20, 2013
A lender would likely have to sit down with you and talk about your situation before being able to advise you. I recommend that you call Bernard Duganzik with Key Mortgage at 847 508 0190 as he is an honest, knowledgable, competent lender that can help you.
0 votes Thank Flag Link Sun Oct 20, 2013
Greetings Kendal,

Congrats on your engagement! As per next steps, gift funds are allowed. The combination of your income, credit and down payment will determine the the rate and terms of your loan. Get yourself pre-approved now so you know exactly what you need to do in order to qualify for a home. Should you need any assistance, feel free to contact me.
Web Reference: http://www.BJDLOANS.com
0 votes Thank Flag Link Sun Oct 20, 2013
Yes, you can use the gift funds for down payment. This will not have any negative effects on your loan terms. Contact me at your convenience and I would be happy to help.

Matthew Roder
VP of Mortgage Lending
Guaranteed Rate
630-388-9533
Matthew.roder@guaranteedrate.com
0 votes Thank Flag Link Sun Oct 20, 2013
The best way to go about doing anything correctly with a loan, is to speak to your lender.
0 votes Thank Flag Link Sun Oct 20, 2013
You can do so. To go about it the right way, speak with your lender so you do it correctly.
0 votes Thank Flag Link Sun Oct 20, 2013
Congratulation on you engaged Kendal , yes you can used for a downpayment with a letter signed by your parents
0 votes Thank Flag Link Sat Oct 19, 2013
Well this is an exciting time for you, wedding and a house, well congratulations to you.
It really depends when the money ends up in your accounts (90 days plus) otherwise a gifting letter is required etc.
Here is what I strongly suggest to you....
Work with a good well rounded and experienced local Lender...

That lender will make the right recommendations to you, will be able to provide you in advance based on your down payment amount and purchase price app. in the beginning, what your monthly loan payments would be and that will take into consideration whether your down payment is 20 % or purchase price or less and based on your credit score it will determine your interest rate...and monthly app. payments.

There are some differences in whether you intend to purchase a condo, a townhouse, a row house or a single fam. home. If you are intending to buy in North Center or nearby I am assuming you are looking for a townhouse or condo, but with condos and townhouses you really need to work with a good Realtor, your personal Buyers Agent (a Buyers Agent is free to the buyer as they are paid at
the closing table by the Sellers as long as the property is listed by a Realtor/Brokerage and is on the
MLS - if interested in the details - send me an e-mail) Also realize that especially in the city of Chicago the association/assessment fees are very very different per building or townhouse complex,
what amenities they include beside the obvious ... like for example a pool, door man, exercise room,
roof top etc. etc. But if you commit to one Realtor, your personal Buyers Agent who loves to work with
buyers and is committed to finding them the right property for them, in size, amenities and price, that Realtor will be your guide and confident and make sure you will be the most well informed buyer.
As I am assuming that you are buying your first home, do not do this on your own, and remember
you can have a buyer representation agreement with your Buyers Agent, just like the Seller has a
listing agreement with the Listing Agents/Real Estate Brokerage, except that there are no fees on your end only your loyalty and commitment to one Realtor.

If you need more details and would like to get a recommendation of a good local loan officer to guide you through the first steps of the financing process, e-mail me and I will connect you, so that you
get the right instructions and your initial pre-qualification / pre approval letter which you will need
to make an offer... You should also connect with a local real estate attorney, who will review any
real estate contract you enter into for any inspection demands or other situations after a mutually
agreed contract has been signed. Those initial terms and the final sale price will be negotiated in your very best interest by your personal trusted and loyal Buyers Agent, who of course will also make
recommendations to resale value, get you the condominium docs for you and your attorney to review.

Feel free to contact me if you have any further questions or concerns....
When is the BIG Day?



Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert

Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
And always with a SMILE 
Covering for @Properties the city of Chicago, all N and NW suburbs, the fine homes on the
North Shore, and many of the W and SW suburbs, and with her trusted Partner Agents all of
the US and worldwide properties. Edith speaks French, German, some Spanish and other.....
@Properties Brokerage, 30 Green Bay Road, Winnetka, Illinois 60093
EdithSellsHomes@atproperties.com
Check out my website at htttp://tinyurl.com/YourRealtor4Life
HAVE THE MOST WONDERFUL DAY :)
0 votes Thank Flag Link Sat Oct 19, 2013
Congratulations. Getting married and buying a house are pretty exciting.
Feel free to reach out with any additional questions that you might have. dan@porterhouseproperties.com.
0 votes Thank Flag Link Sat Oct 19, 2013
Kendal,
Congratulations on your upcoming wedding and for your wonderful gift. If the funds are in your bank accounts for 90 days or more you may be able to avoid a gift letter. If less than that or if the bank inquires as to where the money came from, you may have to have your parents sign a gift letter stating that they are a gift and no repayment is expected.
Your down payment reduces your final loan amount and will impact what type of loan program you will be on, which in turn will affect your rate and APR. There are conventional loans starting now with as little as 3% down and FHA at 3.5% down. You can put more and any amount less than 20% will require mortgage insurance (MI). MI insures the lender in the event that you default on your mortgage and they foreclose. If they are offering 20% or more you can avoid the monthly expense.
In addition to your down payment, you'll need closing costs which can be as much as 3% of the purchase price. Your lender will break these down for you and tell you some options to reduce them.
I would encourage you to meet with a great local lender as early in the process as you can. Any surprises on either credit report or employment may take time to resolve, so the sooner you start the smother the process will be when you find a house.
0 votes Thank Flag Link Sat Oct 19, 2013
Kendral,

Absolutely you can use it as a gift. If you're obtaining an fha loan, 100% of your down payment can be a gift. If it's a conventional loan, you will be required 5% of the down payment to be your own funds.

I'd love to help you with your financing. I close all loans within 30 days.
Call me anytime 312-738-8430 to discuss further options.
Alexander Romo
Home Loan Expert.
0 votes Thank Flag Link Sat Oct 19, 2013
Beautiful gift! Hope your credit is good, also. Check with various lenders and get prequalified right away. Then work with a good realtor to help you find your dream home. Best of Luck to you!
0 votes Thank Flag Link Sat Oct 19, 2013
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