Money from parents for down payment, how should I go about this?
There are two ways to approach this. 1. Simply take Mom and Dad's money and have them provide a letter for the bank that the money is gift for the down payment. This will provide the lender the necessary paper trail. 2. FHA Kiddie Condo Program or co-borrowing. Buy the house with your parents as both co-borrowers and co-owners. This will allow their money to be used for the down payment and for you to take it from there. Then, after a few months you can refinance in your name only and get the parents of the title. Or simply keep them on title with you (it makes little difference because you can claim all the tax benefits for yourself).
Using gift money for a down payment?
My wife and I are purchasing our 1st home. My sister and bro-in-law offered to pay our down payment for us if we pay them back. We've been pre-approved for the mortgage but we ran into issues. It appears the only way to have them pay the down payment would be for them to gift us the money. We're doing a 20% down payment. We thought having my bro-in-law included as a co-signer would allow him to pay the down payment directly, but I guess we can't (not sure if that is because of the credit union's policy or what). There's two issues we have found with them paying it as a gift: - We read the tax-free limit of gifting a relative money is $14,000 or $28,000 if married. We're purchasing the house for $171,000, so we'd have to break the limit to hit the $34,200 for our down payment. - We would have to sign a gift letter as proof, stating that it's purely a gift and we wouldn't have to pay the gift back. So my questions are as follows: - We live in Michigan. I can't find any concrete proof, but I read that Michigan doesn't have a gift tax for passing that limit, is this true? Even so, would my brother-in-law still be hit with gift tax federally if we went over that limit? - Would signing that gift letter and then still paying him back (personally, not through "official channels" or anything) be legal and not constitute fraud or anything like that? - Is there any other way we could have them pay our down payment unpenalized we should look into?
Can I gift some or all of the down payment for my own home to a buyer?
Yes, you can certainly gift some or all of the downpayment. There are a variety of ways to do that.However, you will probably want to consult a CPA to avoid any surprises, because there can be tax issues with gifting money.
Are there any US taxes on a gift for house downpayment?
For the vast majority of people - No, you won't owe any gift taxes.You can give away up to 14,000 dollars per year per person without saying anything to the government.If you give someone over $14,000 you need to file a form with your taxes. You still do not owe gift taxes on it. -- You have a lifetime exclusion of 5.43 million dollars that you can give away without taxes. So, if you've given away more than 5.43 million dollars, then yes, you will owe gift taxes on the amount given away. Intuit explains it quite nicely:The annual federal gift tax exclusion allows you to give away up to $14,000 in 2015 to as many people as you wish without those gifts counting against your $5 million lifetime exemption. (After 2015, the $14,000 exclusion may be increased for inflation.)Say you give two favored relatives $20,000 each in 2015 and give another relative $10,000. The $20,000 gifts are called taxable gifts because they exceed the $14,000 annual exclusion. But you won’t actually owe any gift tax unless you’ve exhausted your lifetime exemption amount. Assuming you haven’t, the two taxable gifts simply reduce your lifetime exemption by $12,000 [($20,000 - $14,000) x 2 = $12,000]. The $10,000 gift is ignored, because it’s below the $14,000 annual exclusion.If you give three individuals $14,000 each in 2015, these gifts are ignored because they don’t exceed the annual exclusion.The Gift Tax Made Simple
Can my wife take out a personal loan to gift me as a down payment on a house?
I am taking out a loan in just my name because my wife won t qualify. Trying to get down payment together and I am curious if since she isn t on the laon if she can take out a personal loan to gift me as down payment.
Aged Money for Down payment on mortgage?
This is another way the mortgage companies are cracking down on potentially shaky borrowers. If you had a chunk of cash that just magically appeared in your account one day with no trail as to where it came from (sale of assets, gift from someone, etc.), it could be that you convinced some friend or relative to give you a "loan" for however long it takes to secure your financing. In this case, you would be defrauding the bank. So, what they want is some paper trail over the last two months that shows where the money came from. You could have transferred it through a dozen banks, as long as it was always your account (although they would probably question why you moved that money around so much). If you were given the money as a gift, you have to have a gift letter (may need to be notarized - I never had to get one) that says this money was a bona fide gift from a parent or something and that you do not owe that money to anyone.
When receiving a gift down payment for a mortgage from a family member, does the amount of money the donor has in his bank account matter?
When receiving a gift down payment for a mortgage from a family member, does the amount of money the donor has in his bank account matter?When you’re receiving a gift down payment for a mortgage from a family member, that family member will be required to verify he has sufficient funds in an account to cover the amount of the gift. This verification can normally be satisfied with 1–3 months of bank statements, depending on the individual lender’s requirements.Lenders are not so concerned about how much money the donor has in the bank, as long as he can verify he has sufficient funds to cover the amount of the gift.The fact that the donor must verify he has the funds to give often offends the family member (usually a parent) who is making the gift. It helps if you (or the loan officer) can explain the reason for verifying these funds.“Gifts” from family members have often been used to hide borrowed funds and lenders do not want a borrower to have loans which have not been disclosed by the borrower which causes more debt than has been used in underwriting his application.Lenders have seen it all and are alert at discovering undisclosed loans which affect the borrower’s ability to qualify for his loan.
Is it possible to buy a house with no down payment?
How can I buy a house if I can't afford the down payment?Although it’s not a good idea to buy a house if you can’t even afford the down payment, there are dozens of different ways to do it. A few examples:If you served in the U.S. military, you can get a VA loan with no down payment.In some areas of the country, you can get Farm Administration loans with no down payment.Have a parent “gift you” the money. Technically, your down payment is not supposed to be borrowed, so you use a gift instead. (A gift doesn’t have to be repaid; a loan does.)Find a co-owner who has the money. There are plenty of investors who—if the deal is right—will put up the money in return for partial ownership of the property.Do an equity-share arrangement. It’s similar to the above, but with some additional bells and whistles. (Look the term up online. Equity-shares were very popular in the 1970s.)Get owner financing and persuade the owner not to require a down payment.Do a lease-option or lease-purchase. A portion of your monthly payment should be credited to either the down payment or the purchase price.And, of course, you can always wait until you’ve saved up the money for the down payment. Live very frugally. Get a second job. Maybe move back in with your parents (if you’re not already there).
Will I incur any taxes if my spouse gifts me money for the down payment of a property in the USA?
A2A. US perspective.If you are a US citizen, the answer is that neither you as the recipient, nor your spouse as the gifter, will incur any taxes on a gift from your spouse to you.If you are not a US citizen, you as the recipient will not incur any taxes on a gift from your spouse. If your spouse is a US citizen or resident alien, then your spouse as the gifter will have to file a gift tax return if the amount of the gift exceeds the marital exemption of $149,000; however the spouse may not have to pay any taxes due to the lifetime exemption.Note that if the spouse retains an interest in the property in the latter case, the IRS will likely rule that because you don't have an unfettered right to the property, the gift is a gift of a “future interest” and the spouse as the gifter will not be able to apply the marital exemption to any part of the gift.