Gift Funds

Hello MortgageMaster,

Can you tell me how I obtain funds that are being given to me as a GIFT for a down payment on a home? For instance, my brother-in-law is giving me my down payment for my home as a gift from him. Does it matter WHAT type of WAY he gives it like in a regular "CHECK" from his account or does he have to get a cashiers check to give me?

If you are receiving gift funds, the best thing to do is have your brother take the funds from his account using either a wire or cashier's check. Your lender will most likely want your brother to "source" his funds. In other words, they want to see that he had the funds to begin with, and that he actually provided the funds. If your brother uses either of the above, it will provide a paper-trail showing that the funds came from his account. Also, a personal check, if accepted (very doubtful), may take several days to clear. A word of caution: have your brother provide you the funds through escrow/title. If he writes you a check, you deposit it, and you pay for the down payment through your bank account, your brother will have to provide bank statements showing he had the funds PLUS the proof that the fund were written to you and cleared his account.

MortgageMaster