Home Buying in 19711>Question Details

Thompson, Home Buyer in Delaware

Was wondering if "gifted money" could be used to help buy a home.

Asked by Thompson, Delaware Fri Sep 5, 2008

I receive an annual gift of $12,000 from my parents. I make $20,800 yearly and so does my girlfriend. Would it be possible for a lender to look at my annual gift as a source of income? This would bring our income from $41,600 to $53,600. It would help us a lot if we were able to use it as "income" in a sense. Also would I then be taxed on the gift? Please, if anyone has any information, please respond!

Thanks, Prospective homebuyer in DE

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Answers

3
You can not use the Gift money as income because there is no way to prove it will continue for at least 3 years. We must verify that the income will continue. Since you are not claiming it on taxes that is another issue as well. You can use the gift money for down payment but not as income. You can use a parent as a non-occupying co-borrower on an FHA loan to help you qualify if you income is not enough.
If you would like to explore your options feel free to call me at 302-588-3665. You may also want to attend our free first time home buyer seminar this saturday October 24 2009 at 10 AM till noon and again from 1 PM till 3 PM at the Christiana Hilton Hotel in Newark, DE

John Thomas
Certified Mortgage Planner
302-703-0727 Office
302-588-3665 Cell
0 votes Thank Flag Link Wed Oct 21, 2009
I know lenders accept gift money. Now you are saying you get this annually. You would have to have your folks sign paperwork indicating such and stating it is a gift and not a loan. I would suggest you talk to a lender. That money would account for something I believe.
0 votes Thank Flag Link Sat Sep 20, 2008
Typically a Lender will not count the income however you still have options available
1. FHA Allows for a Non-Occupying co-borrower such as your mom and dad to sign with you to help out with your income problem
2. The USDA direct loans are based off income and you are able to buy a home with interest rates as low as 1%
3. Claim the 12k per year on your taxes and go back the last two years and amend your taxes to show that as income. You will have more tax liability but your parents will get a break and if they are giving it to you they might also give you the difference in your tax obligations

I hope this helps and should I be of any other assistance please e-mail
0 votes Thank Flag Link Fri Sep 5, 2008
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