Buying a home can be thrilling, but when it comes to saving enough money for a down payment, that thrill becomes complicated.
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A father and sons
Many times, homebuyers turn to family and others to get enough cash upfront for a mortgage. In fact, 27 percent of homebuyers aged 22-29 and 20 percent of those aged 30-39 received gifts from relatives or friends to help with their down payment, according to the National Association of Realtors.
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These down payment gifts, while common, must be documented accurately in what’s known as a gift letter in order to be applied to a mortgage.
What is a gift letter for a mortgage?
A gift letter is a document that helps satisfy a mortgage lender’s requirement that a borrower’s down payment funds are coming from legitimate sources, explains Jessi Bostic, broker/owner of Kismet Lending in Salt Lake City. The