Gift Funds
The process of buying a home requires documentation for almost every step. Purchase agreements, contracts, inspections, closings, and loan documents seem to flood the process at every turn. If a family member wishes to assist the new homebuyer by contributing money to help with the down-payment, the financial assistance is considered a “gift” and should be documented in the loan and closing paperwork to avoid issues with the closing.
Gift funds are an extremely generous offering, and family members are frequently willing to help contribute to an important purchase like a home or condo. If you would like more information on buying a home, contact the Austin real estate professional of the Carvajal Group at 512-419-7770.
Gift Fund Letter Requirements
In order to use gift funds at closing, the person who is giving the gift typically must write a letter that includes:
- Explanation to the lender that the donor intends to “gift” the money to the individual making the purchase
- The purpose should be for the purchase of the specific property
- The relationship between the donor and homebuyer should be specifically stated
- The exact amount of the gift should be stated
- The letter should be signed by the donor and dated
Many homeowners take advantage of gift funds if they have relatives who are willing to give them money to assist with the purchase of a home. It is important that all financial assistance be disclosed to the lender in specific documentation to avoid problems with the loan.
Contact Us
If you are looking to purchase a home in the Austin area, contact the Austin real estate professionals of the Carvajal Group at 512-419-7770 today.
