Leveraging Gift $ in Financing

What’s Happening?

For the second week in a row, the major stock market indexes pushed forward to establish new all-time highs. Strong economic data boosted the bond market as well as equity pricing. The market is still pushing forward with Fed Chair Janet Yellen indicating that the strong market performance may lead to a rate increase before June. With that, the probability of a rate increase has shifted the 30-day Fed Fund Futures with the likelihood of an increase at 17.7% by March 15 and at 44.% likely to increase by May 3. As it stands, June 14 seems to be the most likely date for the Fed to raise rates. When that happens, we will see almost immediate changes in the interest rates.
Using “Gifts” for a Down Payment

Many clients have financial gifts, often from parents, that they would like to put towards their home purchase. I have found that many are surprised around the rigor that is in place to vet the source(s) of these financial gifts. This scrutiny can often make both the buyers and the gift “giver” uncomfortable but there are several reasons that banks must operate in this manner. First is that banks need to ensure that the money is truly a “gift” versus an undisclosed loan. Obviously, if it was indeed a “loan” vs. “gift” it could potentially shift the buyers ability to make mortgage payments. The second reason is that Banks are required to track the flow of money to ensure that there is no illicit activity (e.g., money laundering). As a result, all gifts require the “giver” to sign documentation declaring the source of the cash gift and that it does not need to be repaid. If you need help walking through this rationale with the “giver” please include me in the conversation. I’m happy to help!

Geoffrey Davis, Mortgage Loan Consultant
6401 S. Custer Rd.

McKinney, TX 75070

Apply today: http://gdavis.fubmortgage.com
214.529.9622 Direct
855.239.6079 Fax
gdavis@firstunitedbank.com
NMLS#206192
VOTED “BEST MORTGAGE PROFESSIONAL” BY D MAGAZINE 2010, 2011, 2012, 2013, 2014 & 2015!!
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