The short answer to this is “yes”. Depending on the type of mortgage for which you apply, financial help from blood relatives is permitted. An FHA mortgage allows your entire down payment to be a gift from a blood relative. So if your folks or your Grandma or your brother want to help you come up with the cash for a down payment on your first home, they can “gift” you the money. Of course, there will be rules that have to be followed about how this gift can be made. A competent mortgage consultant can tell you rules and how to make this happen.
Some conventional loan programs will also permit a gift from a blood relative. However, once again, the rules for mortgage loans are rapidly changing, especially in today’s recessionary environment, so be sure to work with a lender who stays on top of the details.
If you receive a gift from your family and closing cost help from the seller, you can purchase your first home without spending a dollar from your own pocket. It’s a great world we live in.
For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs. “Simple answers to home ownership questions”.