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Real Estate <§!
Eileen M. Day REALTOR
WHEN PARENTS HELP Some first time home buyers (actually 20%) are fortunate enough to buy their first homes with help from their parents. In these cases, par ents typically provide half the down payment for would-be homeowners who otherwise would not have savings and incomes large enough to qua! ify for a mortgage.
Parents tend to make a gift rather than a loan in such cases because too much debt can count against prospective borrowers when qualifying for a loan. As long as the future owners ante up a fourth of the down payment, lenders don't care if family generosity makes up the difference. How ever, they WILL ask for a gift letter, a simple document acknowledging that parents do not expect repayment
On the other hand, if there is an actual LOAN being made from parent to child, it should be secured with the same sort of paperwork that a bank would use. So that the interest repaid you will be fully deductible as a home acquisition loan.
If there is anything we can do to help you in the field of real estate please stop in at EILEEN M. DAY, Realtor, The Clopton House, Washington, Va. 22747. Phone 675-3033. We're here to help.
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