By the Kent Redding Group
AUSTIN, TX – The holidays are a wonderful time of year and if you’re planning on buying a house in Austin you may be given money to use towards your down payment and even though gift money can be a blessing, there are 4 mistakes that you don’t want to make with holiday gift money.
Mistake #1 – Not Taking the Time to Document the Gift
Although the holiday gift money may be given to you by a friend, family member or relative, you should take the time to quickly write a gift letter that documents the gift amount, explanation of the gift (if it’s a loan or has to be repaid), date of gift transaction, your relationship to the gifter and their signature.
Writing a gift letter literally takes just minutes and it can save you a ton of hassle when it comes to applying for a mortgage loan because a lender will want to have everything documented, including gifts, just so they can have confidence that you have the ability to repay your mortgage loan.
Mistake #2 – Not Maintaining Records of The Transaction
Once you receive the gift you’re going to deposit it into your bank account, right? If so, one thing you don’t want to do is throw away the deposit receipt because, your lender will want to see all documentation involving the gift transaction including the deposit receipt or record of transferring the gift to another account.
Mistake #3 – Depositing Gift Money into Multiple Accounts
Another thing you don’t want to do after receiving gift money is to deposit that money into multiple accounts because, lenders like to see that the money which will be used for the down payment and closing costs be used from one bank account.
Mistake #4 – Not Communicating with Your Gifter
Last of all, but most important, one of the biggest mistakes that people make when they have been gifted money during the holidays is not communicating with their gifter about the transaction. Communication is important, especially if the gift amount is being transferred from the gifter to the giftees account, so you have to make sure you communicate with the gifter, write the gift letter and save all documentation of the gift money, or you could have problems getting pre-approved for a mortgage loan.
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