Your parents are gifting you $100,000 for your down payment?
That is incredible.
Now please do not accidentally make it a problem.
Save this.
Here’s how gift funds usually work:
1️⃣ Tell your lender before anything moves.
Do not transfer the money first.
Your lender needs to guide the timing, the account, and the documentation.
2️⃣ You will probably need a gift letter.
It usually includes:
The gift amount
Your relationship to the person gifting it
The property address
A statement that the money is a true gift
Confirmation that it does not need to be paid back
3️⃣ The paper trail matters.
You may need to show:
The donor’s bank statement
Proof the funds left their account
Proof the funds went into your account or escrow
Cash 👉 no
Mystery deposits 👉 also no
“Don’t worry, it’s from my dad” 👉 underwriting still needs proof
4️⃣ Move the money exactly how your lender tells you.
Sometimes it goes to your account.
Sometimes it goes straight to escrow.
Sometimes timing matters more than you think.
Do not guess.
Ask first.
5️⃣ Check the loan program rules.
Some loan types allow the entire down payment to be gifted.
Others may require you to bring some of your own money.
This is why you want to ask early.
6️⃣ Do not forget about reserves.
Even with a large gift, you may still need money left after closing.
Your lender will let you know what your file requires.
7️⃣ Tax note: ask a CPA.
The buyer usually does not pay tax on the gift.
The person giving the gift may need to file a gift tax form depending on the amount.
Again, that is a CPA question, not a “let’s guess on Google” question.
Common gift fund mistakes that can slow everything down:
Moving the money before talking to your lender
Using cash
Sending money through random apps
Not having a clean paper trail
Calling it a gift when it is actually a loan
Waiting until right before closing
Underwriting will ask questions.
Save this before any gift money moves, and share it with someone whose family is helping them buy a home.
— Richard Sarey, your go-to mortgage broker in Frisco Texas
#mortgagetips #mortgageeducation #MortgageAdvice #HomeLoanExpert #FriscoMortgageBroker
