Can you use your gift for a downpayment to show you have it but not pay it at closing?
Jul.31, 2010 in
Gifts for
If you are financed for a mortgage 8,000.00 with 3.5% down approx ,000.00. Can you get a gift in that amount from your parents and use it at closing to show you have the money but not actually have to put any of it down but specify in the loan for the down payment to be a part of the loan?
July 31st, 2010 at 1:35 pm
If I understand you correctly you are trying to borrow the down payment as part of the closing costs. No, because the down payment is an amount you own that goes into the home so that you have a percentage of equity in the home. This is to give you something to lose in case you get in trouble. It would end the whole point of the down payment to do that.
But if you have a really motivated seller and good appraisal, you could get the seller to pay the down payment. In that case the selling price is say $110,000 but the seller gives you credit for $6000 in closing costs, for example. What you actually pay in is your earnest money (which can be a small amount) and then you get a bill at closing for everything you haven’t paid that is not in the mortgage. That would include your down payment. If he has agreed to $4000 credit then you will technically be paying the down payment but in effect he pays it… hard to find a seller who would want to do it but these days….