One way to come up with the minimum down payment of 5% required for your new purchase is with a gift from family members. Most lenders allow this and it’s a great way to get into the housing market.
Often the family members are required to be an immediate family member. This is usually defined as being one of the following:
- Legal Guardian
The list is very lenient however, as not all families are alike. The family member can be biological, adoptive, stepfamily, in-laws or they could not be related at all but be considered family based on your relationship with them.
For this to be proven to the lender all that is required is a signed gift letter and proof of the funds being deposited into your bank account. Often the gift letter is provided by the lender and simply needs to be filled out and signed, and the funds are to be in your bank account a minimum of 10 days prior to your closing date.
So if you have family that have indicated they would like to gift you money for you to buy your home, get a pre-approval based on the amount you now have for a down payment, find a realtor and it’s time to go on a house hunt!
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