If my parents loan me the money for down payment on my FHA Loan. What documents will my parents need?
- Beverly SLv 711 months ago
You can't "borrow" your down payment for FHA loans. They can "gift" you the down payment though. The lender will need a gift letter (they will help you prepare it).. they will need to see your parents bank statements to prove they have the money to give you, they will need to see your bank statement showing the money going into your bank. Don't do any of this till the lender tells you to. It must be tracked per FHA guidelines to work.Source(s): Mortgage lender 32 years.
- 11 months ago
You can't borrow down payment money.
- linkus86Lv 711 months ago
Your parents can't loan you the money, but they can give it to you. On my first house I used an FHA loan and got around this situation by making my parents co-borrowers and letting them come up with the 3.5%, then later (when I could afford it, paid them back) refinanced the loan solely in my name.
- curtisports2Lv 711 months ago
They CANNOT loan you the money. You cannot borrow money for the down payment or closing costs. FHA will deny you as soon as they see something that looks like a loan.
Your parents may GIFT you the money. The lender will require a gift letter from the parents. This letter becomes a legal and binding document. If you sign a separate side agreement with them to repay the money, both you and your parents are committing fraud. The money must be an actual GIFT.
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- SlumlordLv 711 months ago
You will need a gift letter from your parents (assuming they are will to just give you the money). Just a letter that they sign saying they have given you the money and are not expecting it to be repaid.
- JudyLv 711 months ago
Down payments are not allowed to be borrowed money. Your parents would have to sign a gift letter, saying the money was a gift and there was no agreement tor or expetation of repayment
- real estate guyLv 711 months ago
NONE. With an FHA loan, the 3.5% MUST BE YOUR MONEY. You can't borrow it, even from parents.
HOWEVER, if you have 3 months before settlement, have them give you the money, put it in your account now and then at the end of 3 months, the bank statements show it as your money.
TALK WITH LENDER.
- Casey YLv 711 months ago
Cannot get it as a loan...it must legally be a gift...otherwise...that's just a second mortgage...
- DEBSLv 711 months ago
They will need to gift you the money and will need to have documentation (a letter) stating that it is not a loan. Otherwise, the banks will take that loan into consideration when the decide if you qualify or not. It is another obligation which puts their loan at risk.
- 11 months ago