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How to Document Gift Funds: FHA vs. Conventional Home Loan
With many Millennials entering the housing market this year, it’s likely they might need an extra push with that huge pile of school loans they graduated with.
The most expensive part of buying a home is often the down payment, and if you want your child to move out of your basement, you might want to help them along with a gift fund.
Even if you aren’t a Millennial, we could all use a little assistance in terms of money from time to time, couldn’t we?
What is a gift fund?Just like the name implies, a gift fund is a gift of liquid monetary value that can be used for a specific purchase.
Unlike a loan that has to be paid back, gift funds can be used toward large purchases like putting a down payment on a home, which can be a huge help if you’re struggling to come up with a sufficient payment (20%).
In order for funds to be considered a gift, there must be no expected or implied repayment of funds to the donor by the borrower.
Where do I receive a gift fund?In terms of receiving gift funds, lenders require you to follow one simple rule: all gift funds for a down payment ... more
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