If you’re under the age of 40 and have never owned a home before, a study shows that getting a gift of cash – for any reason whatsoever – is likely to lead to homeownership.
According to government-backed mortgage group Fannie Mae, when renters are given a cash gift of at least five thousand dollars, within the next twenty-four months, their likelihood of buying a house rises twenty-three percent.
Even if the gift isn’t specifically for buying a home!
It could be any cash gift, for any reason, but – you’re going to need a paper trail. Because lenders have rules for cash gifts and how to receive them.
The giver of the gift should write a paper check and scan a copy. The receiver of the gift should deposit that check in it’s own bank transaction, so the gift amount matches the amount of the deposit exactly.
The giver of the gift should draft a letter, attesting that the gift is actually a gift and not a loan in disguise. Both parties should sign that letter. And, the receiver of the gift should make sure their lender knows a cash gift is involved because cash gifts are common enough that lenders have a process.
If you’re fortunate enough to be getting a cash gift to help with buying your house, reach out to us anytime to make sure you’re getting it right.
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Home buyers snatched up properties for sale in May as housing made its v-shaped recovery.