Who Is Allowed to Gift Money
Gift money may come from a family member. Some lenders will stretch that to include a fiance/fiancee. Friends are not allowed to gift the down payment. Why? Because lenders believe that your parents, a grandparent, or even a brother or sister would give you cash without expecting it to be returned. But a friend? No, lenders don’t think friendship stretches that far, and that it would actually be a secret loan. Remember, borrowed money cannot be used for a down payment.
What the Gifter Has to Prove
Lenders have a form Gift Letter that the person donating the funds must fill out and sign. In addition, they have to…
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