Home Buying in Brooklyn>Question Details

Nyguy75, Home Buyer in Brooklyn, NY

How do I fill out a purchase offer if the down payment money is coming as a gift from my parents?

Asked by Nyguy75, Brooklyn, NY Thu Oct 22, 2009

I plan on putting in an offer on a condo but the down payment is coming from my parents as a gift. The offer form requires i put down all assets that I have. I once had an agent tell me to put the amount in the cash section even if you don't have it yet. What is the best way of doing this?

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Mitchell, if you would like to go to http://www.fha.gov, you can do a searh of gift funds guidelines for FHA and see that what you are being told is not correct. The funds need to come from the donor's account. If the borrower shows a copy of a check coming from an account in the donor's name, with a fully completed gift letter, and evidence of depositing the funds into their own account, they are often not even asked for evidence of donor's ability. The best way to do this is to deposit the funds before the time of the application, and show all of this (copy of check, evidence of deposit, and gift letter) with the initial mortgage application.
0 votes Thank Flag Link Thu Oct 22, 2009
I stand corrected. I checked with a mortgage banker I work with and for a FANNIEMAE mortgage the money that your parents are giving you has to have been deposited in a bank account for at least 30 days. If your going for a FHA mortgage then the money would have to be in your parents bank account for at least 60 days.

The long and short of it is that you can't just take money from under a mattress and deposit it in a bank account today and then gift it to your children tomorrow, You would have to wait 30 or 60 days depending on the type of loan you are applying for.
0 votes Thank Flag Link Thu Oct 22, 2009
I recently had similar experience with my clients, where they were receiving money as a gift from their parents. As long as you can provide "source of funds" (letter from your parents should be enough), you dont have to wait 3 month for the money to be in the bank. I know in some cultures parents cant give money to their kids as a gift , only as a loan (superstition of some sort). In that case there are might be problems.
0 votes Thank Flag Link Thu Oct 22, 2009
I agree with what your agent is telling you. If you were completing a mortgage application, the gift would go on as an asset. Will you have any of your own funds in the transaction, or is it all gifted? That could potentially affect the financing, so that is something that you should keep in mind. It will depend on the amount you are putting down in total. Mitchell, I think you are mixing up the seasoning on the borrowers funds, with what is gifted. If the parents give him the gift, it does not have to be in his account for 3 months, it can be given after the mortgage is approved, as long as he gives enough time to show the transfer of gift funds. Depending on the lender, clearance of any conditions can take time. I have an in-house underwriter, so we can clear last minute conditions, that is not the case with all lenders.
NYguy, please call me if you would like to discuss your financing needs, and to have all your questions answered.

Robin Silverberg
Private Mortgage Banker
516-972-1687
0 votes Thank Flag Link Thu Oct 22, 2009
Dear Nyguy75:

Usually when you make an offer you do not have to state the location of your assets. Unless that is specifically requested by the homeowner. That usually comes into play when you are going to the bank to get your mortgage.

One thing to keep in mind is that the "gift" money you are getting needs to be seasoned. This means that it should have been sitting in a bank account or some other form of asset for three months. You must be able to show and prove that. You can't take cash from underneath someones mattress and use it, that will not work!

If the seller is requiring that you disclose the location of the assets, be honest. Tell them the money is being received as a gift from your parents, but also show them the bank statements showing the assets are available and as I stated "seasoned." Then you shouldn't have a problem.

Bear in mind that I am not an attorney and cannot give legal advice, you should also speak to an attorney to help you out with this. If I can be of further assistance please let me know. Good luck!

Sincerely,
Mitchell S. Fieldman
Associate Broker/ Director of Sales
Madison Estates & Properties, inc.
Office: (718) 645-1665
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Thu Oct 22, 2009
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