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First Time Buyers
Most first-time buyers can
qualify for a mortgage loan, but they may need help from parents to make the
down payment or closing costs on their home. There are loan programs that
minimize the down payment and closing costs for first-time buyers. These
programs usually require that 3 to 5 percent of the purchase price come from the
buyers funds, not from a loan or gift. Most lenders ask for the last three
months' bank records, and the borrower will be asked to reveal the origin of any
large deposits. If the money comes from the parents, the lender may not consider
those funds when qualifying the buyers. If you are planning to help your
children finance a home, you should transfer any funds several months before
they begin their house-hunting. If it is a loan, you should draw up a formal
re-payment agreement with your children to eliminate potential misunderstandings
between you, your children, and any siblings.