MortgagesUndressed

Be careful however. these are turbulant waters. You don’t want to start the process with false hopes. Here are a few points to consider:

1- Usually a 20% gift make things totally acceptable.

2- The gift usually must come from a family member, non profit organization, or employer.

3- The gift must be accompanied by a letter stating it is not to be repaid.

4- Less than 20% gift means you probably will have to use some of your own money.

5- In some cases you are better using 100% financing and then after closing using to pay off some of the mortgage you took out. (Probably a second).

6- A gift of the home equity, can be done, but is scruitinized for inflated value.

7- Non profit gifts were popular but under fire. In these cases, the price was raised to cover the gift from the non profit. Read the following warning if you are considering going non profit:

HUD Cracking Down on Downpayment Assistance

The Department of Housing and Urban Development has initiated a rulemaking process to crack down on downpayment assistance programs that have bolstered Federal Housing Administration single-family loan originations but also led to rising FHA defaults and foreclosures, according to the HUD inspector general.

If all this sounds like it is full of maybes and what if’s, it is. That is another reason not to use someone that may be incompetent, like your friend who just got into the business. Sorry friend. Larry Cragun