A larger down payment reduces the amount needed to borrow, leading to lower monthly payments and potentially better interest rates. Here are some alternative sources for down payment funds beyond personal savings or proceeds from selling a current home. We also have zero down payment options including our Equity Zero program. Plus, Bridge Loans are available for those who wish to tap into their home equity and buy before they sell.
DID YOU KNOW? Graduation and wedding cash are acceptable forms of gift money and can be used as a down payment to purchase a home. Reach out for more information!
Gift Funds from a relative or non-relatives who share a familial relationship with the buyer such as a domestic partner, relative of a domestic partner, person engaged to marry the borrower, former relative, or godparent.
A Gift of Equity refers to a gift provided by the seller of a property to the buyer. It represents a portion of the seller’s equity in the property and is transferred to the buyer at closing as a credit in the transaction.
Assets Being Sold such as a vehicle, boat, or anything of value you are selling. Requires proof of ownership (a title or registration) and evidence of value (Kelley Blue Book value or appraisal). After the sale, provide copies of the receipt and the check and deposit slip showing the transfer of funds to your account.
Retirement/Investments require extreme caution when using for funds to purchase. You will typically need to pay this back and may face a withdrawal penalty. Consult your financial advisor first.
Other Examples include loans from employers, local/state/government assistance grants, inheritances, loan paybacks, wedding/graduation gift money, and winnings.
Important Notes: Funds usually need to be “seasoned,” meaning they must be in an institutional account (like a bank or credit union). You’ll likely need to provide three months of consecutive financial statements to prove ownership of these funds.
To reduce paperwork, consolidate your funds into one account at least two to three months before closing, and keep records of all transfers and deposits while minimizing account activity.
Call your Equity Resources Mortgage Specialist to help you navigate acceptable down payment sources. We’re here to help!