Receiving gift funds for a down payment is a generous and helpful way to achieve homeownership. However, it’s crucial to follow the proper steps to ensure the process goes smoothly and complies with lender requirements. At Liberty Star Mortgage in Fulshear, Texas, we’re here to guide you through the do’s and don’ts of down payment gift funds.

The Do’s

1. Match the Gift Letter to the Check Amount
   The amount on the gift letter should exactly match the check provided. Consistency ensures the process meets lender requirements and avoids unnecessary delays.
2. Document Everything
   Once you receive the check:

• Deposit it into your bank account.
• Save the deposit slip.
• Provide a daily balance sheet to confirm the deposit and the remaining balance in your account.

3. Use a Wire Transfer
   Simplify the process by having your family wire the funds directly to the title company. This eliminates extra paperwork and streamlines the transaction.

The Don’ts

1. Don’t Accept Cash
   Lenders require a clear paper trail for all gift funds. Cash deposits don’t provide the necessary documentation, so checks or wire transfers are a must.
2. Don’t Spend the Funds Before Closing
   Keep the gift funds untouched in your account until the home purchase closes. Lenders will verify that the funds remain consistent with the original deposit amount.

Why Proper Handling of Gift Funds Matters

Lenders review gift funds with a detailed audit to ensure they comply with underwriting guidelines. By following these straightforward steps, you can avoid delays and move forward confidently toward homeownership.

Understanding the do’s and don’ts of gift funds is a key part of the homebuying journey. With proper preparation, you can make the most of this generous financial support while ensuring a seamless mortgage process.

Need Help Navigating Gift Funds?

We’re here to answer your questions and make the process as stress-free as possible. Buying a home is a big step, and Liberty Star Mortgage is here to help you every step of the way!