Question Details

Confused Jan…, Home Buyer in 08724

Short on down payment. What should we do?

Asked by Confused Jannie, 08724 Wed Oct 3, 2007

We make a good income and have no debt except big student loan balances. No car payments and we pay our credit cards off every month. Parents want to gift or loan us down payment money. Good or bad idea?

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5
You don't need any, in fact you don't even need closing cost money if you can get the seller to cover it. The My Community loan program will let you go 100% up to $417,000 loan amount.
Web Reference: http://getprequalified.com
0 votes Thank Flag Link Wed Nov 7, 2007
As you have read, gifts are an excellent source for down payments. If you are a first time buyer, there are excellent programs that will help you obtain the best financing. Note: Gifts by parents are not tax deductible...so that should never be a part of the decision. On the contrary, if your parents gift too much in the current year, they could be subject to gift tax laws. I run a dual platform practice of home financing and tax services and have seen incorrect data floating around this subject all to often. There are a lot of factors that will determine your qualifications, but budget should be primary. Speak to your tax advisor, financial planner, or a solid mortgage broker before writing any offers. Please view profile for legal disclaimer.
Web Reference: http://www.SLarson.com
0 votes Thank Flag Link Fri Oct 5, 2007
Lease to own or owner finance... works every time
0 votes Thank Flag Link Thu Oct 4, 2007
Jan, I don't know what area you reside but there are many programs with down payment assistance. I know Wachovia has a $25,000 GRANT downpayment assistance program where the down payment is forgiven! Gifting from parents is always a great idea as both parents can give to the child. However, it is not much (this is if they wish to write it off in the year of gifting) however, no law says they can't give you as much as you need! Just clear it with your lender as they will want to have total "gifting" and no payment stated on the gift letter. Also, check your union or credit union plus your city as many have great plans for first time homebuyers with reduced interest rates also!!
0 votes Thank Flag Link Wed Oct 3, 2007
Hi Jan,
Big student loan balances could be a big problem, even with a downpayment. Talk to a couple of lenders and see if a mortgage is feasible at this time. If it is, a gift for the downpayment is the way to go, as a loan would be considered another debt, reducing the amount of mortgage you'd qualify for. Good luck!
0 votes Thank Flag Link Wed Oct 3, 2007
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