Mortgage Advice Archives - Page 4 of 17

Imagine you are about to purchase your dream home, and a generous financial gift from family or friends is making it possible. It’s a moment to celebrate! But did you know that mishandling gift funds can lead to delays, added stress, or even jeopardize your loan approval?

Don’t worry, we are here to guide you through the process! Let’s explore the top mistakes homebuyers make when receiving gift money and how to avoid them.

1. Skipping the Lender Consultation

Before accepting any funds, consult your lender. Gift money rules vary by loan type, and your lender will ensure the funds are eligible and compliant with regulations. Skipping this step could result in complications or even a denied loan application.

2. Failing to Document the Gift Properly

A gift without a paper trail is a red flag to lenders. They need proof that the money is a gift—not a loan. Typically, this involves:

A signed gift letter stating the amount and confirming no repayment is required.
Documentation of where the funds came from, such as a bank statement or canceled check.
Proper documentation prevents delays and provides transparency during underwriting.

3. Overlooking Tax Implications

Did you know that gift money can have tax consequences? In 2025, the annual gift tax exclusion is $17,000 per recipient. If the gift exceeds this amount, your family member may need to file a gift tax return. Make sure everyone involved understands the tax rules to avoid surprises.

4. Using Digital Payment Apps

Convenient payment apps like Venmo or Zelle might seem like a quick way to transfer funds, but they lack the paper trail required by lenders. Opt for more traditional methods like a wire transfer, electronic funds transfer (EFT), or a check. These methods ensure verifiable records that meet loan requirements.

5. Spending Every Penny Without a Cushion

It’s tempting to allocate the entire gift toward your down payment, but leaving yourself financially stretched isn’t wise. Reserve some funds for early mortgage payments or unexpected expenses during your first months as a homeowner. A financial cushion ensures peace of mind and stability.

Keep Communication Open

The key to handling gift money correctly is open communication. Keep your lender, donor, and real estate agent informed throughout the process to ensure everything is handled smoothly.

Gift money can be a wonderful way to achieve your homeownership dreams, but only if it’s managed correctly. By avoiding these common pitfalls and following your lender’s guidance, you’ll set yourself up for success and a stress-free journey to closing day.

Ready to make your dream home a reality? I’m here to help you navigate the process from start to finish. Reach out today!

Lee Vanvolkenburg

15:43 23 Nov 23

Michael and his team were wonderful to deal with. They were excellent with communication and always available to answer questions. Thank you all!

williams lovos

22:54 16 Nov 23

We close on the house tomorrow! Thank you David and Michael for making my first home buying a smooth process. I had several out of the ordinary situations that would had easily not been possible to get the loan in the time that they were able to approve it. My wife and I are forever grateful for the work the team did. Thank you again!

Mario Silvestri III

16:45 16 Nov 23

Rex Perkins

16:56 15 Nov 23

Everything had been going well over the past two years since refinancing an existing mortgage. The application process, approval, servicing website, everything had been very smooth, nothing but the best service. I then had a minor issue arise. We had a wind loss claim on our home and, unfortunately, I had put off getting the check cosigned until the last minute. An issue arose as part of a minor miscommunication in terms of where the check was to be forwarded for endorsement.

To make a long story short, I feared that this miscommunication and misdirected check coupled with my procrastination were going to result in the check expiring and a huge hassle on my part to go through the process again. Mr. Inkman nor his branch were in any way involved with my account or account management, yet, the check inadvertently ended up in their draft loss department and I feared this would further delay things. I was a bit frantic.

One of those that I emailed was Mr. Inkman. In an era when customer service is not as valued as in the past, I was very skeptical I would meet the deadline. But, to my surprise, Mr. Inkman took it on his own to personally get things done and get the issue resolved. It appears that he tracked down the overnighted check personally, directed it for signature, packaged and overnighted the check back to me. All the while remaining professional and pleasant and providing consistent email updates on the status. It doesn't even look like he delegated, rather taking the initiative and seeing it through on his own.

To me, that's not just doing a job, that's going above and beyond in terms of leadership, professionalism, and customer service. We could not be more happy. And, as a further sign of good will, the Fairway CEO actually emailed me personally to follow-up and assure resolution. Been very happy with Fairway since my refinance, Mr. Inkman's efforts only further reinforce that opinion.

Samer Fallouh

15:01 15 Nov 23

Debbie Salas

21:47 03 Oct 23

This transaction probably would not have happened without Michael. Whenever we hit a stumbling block, he found a way around it! He kept us informed and was a positive light all the way through to the end and beyond.
Thanks

Eric Kieffer

22:46 16 Aug 23

Did business with Michael about 20 years ago and he was happy to help us again. He and his team did a great job. See you in another 20.

Ensure a Stress-Free Home Purchase with These Gift Fund Tips

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