Gift money from parents won't arrive on time - Any suggestion?

[Anonymous]

We just discovered that a hard-to-come by unit came on the market and we are seriously considereing putting our offer.
We are already pre-qualified with full-fledged letter from the lender for the loan amount (i.e., no need to receive gift money).
But, my parents is willing to send me some gift money (the amount that doesn't trigger the gift tax).

Problem is this gift money probably won't arrive before placing an offer.

What happens if we set up a mortgage now and use the gift money when it reached us to pay the portion of the loan,
after the mortgage payment start.
Can I do that?
Or, should I wait till we recieve gift money to set up a mortgage?
Is there differences in the mortgage amount if we top the downpayment first or
making a huge one-time (?) mortgage payment in the middle of the loan history?

Assuming, no pre-payment penalty and also would love to be flexible for choosing the reduced montly payment over a reduced payment term.

Thank you!!

[Anonymous]

Are you saying the money will come in after closing or just not today to make the offer? If you have the letter from the lender showing that you can afford the mortgage, you make the offer. Closing won't come for a while. Even if it will take your folks a little time to move finds to send it to you, you can work with the lender and they will want a gift letter from your parents which you can get now. Your parents' gift goes to you, and as long as all the money you need to being to closing is in your account on the day you write the check, you're fine.

[Anonymous]

Argh - move FUNDS and BRING to closing.

[Anonymous]

Anonymous wrote:Are you saying the money will come in after closing or just not today to make the offer?

OP here.

"Just not today to make the offer"!!! (money can come before the closing).
And, of course I can get a gift letter from my parents.

So, I should be fine and go ahead submit our offer?

[Anonymous]

OP here.

and, this will be our 1st house, so we are very amature in this stuff.

Just managed to get the lender pre-qualification end of last month.
Didn't expec this unit coming on market like today!!

[Anonymous]

Call your lender, but you sound good to go. Are you expecting a lot of competition?

[Anonymous]

My parents gifted us some money but they ony did so knowing we could afford the place on our own if they didn;t give us the money. they really wanted us to have some money after closing etc and not be house poor. It really helped. We actually put that same amount into an IRA and it has grown nicely.

A good lesson they taught us. Never buy something you can't really afford on your own.

[Anonymous]

You don't need the proof of funds right now, but if they truly are critical to your ability to purchase the place, then make sure your contract includes a financing contingency (which is wise regardless) if your offer is accepted.

But did you get pre-qualified through a lender or pre-approved? Generally pre-approvals, where the lender has already inspected your financials, pulled your credit, etc. put you in a much stronger position than just being pre-qualified when making offers. The pre-approval process may require the gift letter, etc., even if the actual funds aren't available yet.

[Anonymous]

It takes about a month to close. No money exchanged until the papers are signed. I'd go for it.

[Anonymous]

Anonymous wrote:
What happens if we set up a mortgage now and use the gift money when it reached us to pay the portion of the loan,
after the mortgage payment start.
Can I do that?
Or, should I wait till we recieve gift money to set up a mortgage?
Is there differences in the mortgage amount if we top the downpayment first or
making a huge one-time (?) mortgage payment in the middle of the loan history?

Assuming, no pre-payment penalty and also would love to be flexible for choosing the reduced montly payment over a reduced payment term.

These are questions you should ask your lender. They can run the numbers for you.

[Anonymous]

You should try being an adult

[Anonymous]

there's a $5.25 million exemption for gift tax. so if OP parents are trying not to trigger the gift tax, they've been pretty generous so far (or OP is buying a hell of a house).

[Anonymous]

Anonymous wrote:there's a $5.25 million exemption for gift tax. so if OP parents are trying not to trigger the gift tax, they've been pretty generous so far (or OP is buying a hell of a house).

That's lifetime. There's also the annual amount that doesn't really count against that - it's something like $14k a year from each person to each person.

[Anonymous]

Anonymous wrote:there's a $5.25 million exemption for gift tax. so if OP parents are trying not to trigger the gift tax, they've been pretty generous so far (or OP is buying a hell of a house).

Chances are OP meant the $14k limit below which gifts need not be reported, or subtracted from the lifetime limit of $5 million.
I love how even the PP who got gifted money still feel the need to lecture.

[Anonymous]

Ive done this before. Your lender will breed your parents to fill out gift letters pledging the money.

You get the money into your account a few days before closing. Make sure the check has enough time to get cleared. Otherwise, have the parents wire transfer the money if it won't be ready until close to closing.

Good luck. The haters are jealous of your parents love and resources. Ignore them.