Son First Time Homebuyer Loan Options/Advice

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
bidd24
Posts: 9
Joined: Wed Sep 12, 2012 8:42 am

Son First Time Homebuyer Loan Options/Advice

Post by bidd24 »

Hi

My son is starting process for buying first home and was looking for loan advice FHA or Conventional, Traditional or online bank, I am going to help with down payment what is the best way to do that?

Been long time lurker here want to thank all for all information thru the years
John
User avatar
hand
Posts: 1975
Joined: Sun May 17, 2009 8:42 pm

Re: Son First Time Homebuyer Loan Options/Advice

Post by hand »

Helping with a downpayment is tricky - if time is not of the essence (and this is a gift), lenders like to see downpayment sitting in the buyer's account for 3 months otherwise they suspect it is not really the buyer's money.

There are of course potential tax implications of transferring large sums of money, though in all likelihood just filling out a gift form with no actual tax implications.
NYGiantsFan
Posts: 298
Joined: Fri Aug 17, 2012 7:59 am

Re: Son First Time Homebuyer Loan Options/Advice

Post by NYGiantsFan »

bidd24 wrote: Tue Sep 20, 2022 11:53 am Hi

My son is starting process for buying first home and was looking for loan advice FHA or Conventional, Traditional or online bank, I am going to help with down payment what is the best way to do that?

We went through this in Q1 2021.
Few things to keep in mind.
-Bank (loan officer) advise to have first deposit 10% coming from son.
-Bank wanted to see that there is enough assets (from son) for the full down payment.
-Bank requested last 2 years returns and W2 (from son).
-I added my name during the process as bank was providing discount on mortgage for bringing money in. (It may or may not be the best decision for you). For us, about 1/2 point discount helped with decision.
-I bought remaining at closing. Bank was fine with that.
User avatar
JoeRetire
Posts: 13813
Joined: Tue Jan 16, 2018 2:44 pm

Re: Son First Time Homebuyer Loan Options/Advice

Post by JoeRetire »

bidd24 wrote: Tue Sep 20, 2022 11:53 am Hi

My son is starting process for buying first home and was looking for loan advice FHA or Conventional, Traditional or online bank,
Conventional, 20% down to avoid PMI.
I am going to help with down payment what is the best way to do that?
Gifts from you and your spouse to him and his spouse (if he has one).

Some lenders will require that you attest that the money is a gift and not a loan.
Oh, noooooo! I'm so sorry, it's the moops! The correct answer is 'the moops'.
User avatar
Metsfan91
Posts: 509
Joined: Sat Jan 11, 2020 12:33 pm

Re: Son First Time Homebuyer Loan Options/Advice

Post by Metsfan91 »

bidd24 wrote: Tue Sep 20, 2022 11:53 am ...I am going to help with down payment what is the best way to do that?
It is your money. Keep it in your account. Make sure you are able to document for several months.

I helped a sibling with down payment. The lender required a signed statement from me stating it is a gift. Lender also asked for my bank statements for several months.
"Know what you own, and know why you own it." — Peter Lynch
User avatar
K72
Posts: 268
Joined: Wed Dec 05, 2018 8:04 pm

Re: Son First Time Homebuyer Loan Options/Advice

Post by K72 »

hand wrote: Tue Sep 20, 2022 12:46 pm Helping with a downpayment is tricky - if time is not of the essence (and this is a gift), lenders like to see downpayment sitting in the buyer's account for 3 months otherwise they suspect it is not really the buyer's money.
We had no trouble at all with either kid. Our contribution to down payment was in their account less than 30 days before closing. Lender just needed a gift letter from us. Took all of two minutes. Of course also had to file gift with IRS.
All we want are the facts...
ncbill
Posts: 1520
Joined: Sun Jul 06, 2008 4:03 pm
Location: Western NC

Re: Son First Time Homebuyer Loan Options/Advice

Post by ncbill »

Or underwrite the mortgage yourself:

https://www.nationalfamilymortgage.com

I may well do the above for my kid...I'll offer them a discounted rate, with zero down payment.
Post Reply