Post # 1
FI and I are planning on using any wedding gifts (money) received toward a downpayment on our first home. We want to start looking immediately after the wedding (maybe even start prior to the wedding, in May).
Most likely we will have to get an FHA loan because we will have less than 20% (more like 10%).
I’ve read some things about how you have to have all of this documentation regarding gifts to use it as downpayment, etc. but a way to get around all that is to open a bank account called a “FHA bridal registry” which is really just a separate savings earmarked only for gifts to you that you apply to the downpayment.
Does anyone know anything about this or have any experience with this? Or has anyone used their wedding gifts immediately after the wedding for a downpayment, and did you have any issues?
Post # 3
@MsYankee: Oh goodness, I’m glad I read your post because my first thought was that you wanted to have a cash registry!
Whew. Anyway, I have not used the FHA to get a mortgage (I have a VA home loan) so I can’t really say if setting up a separate savings account will help clear up the source of the money or not. I would suggest meeting with a mortgage lender now to go over what requirements you will need to meet in order to qualify. They can even do a soft inquiry about your credit score, and go over what your monthly payments might look like based on current APRs and property tax rates in your area.
Post # 4
I’ve never heard that. When we were looking at FHA loans they were fine with his parents or anyone giving/loaning us an entire down payment. They did end up loaning us about 20K for the downpayment but we didn’t end up going with FHA loan. Did you talk to your loan officer about it?
Post # 5
@MsYankee: We used the money we got for our wedding as part of our downpayment on a house (the rest came from our own savings and a large sum of money from his parents) Our mortgage company wanted to know where we got all the money from so we had to specify any amount or deposit to our account over $2000. It was super annoying to have to justify all the money but we said most of the money was from the wedding and could prove we were married before the purchase of the house.
Post # 6
@DaneLady: we haven’t set up a meeting yet to discuss so thank you for the suggestion. FI did talk to the bank and the loan officer (who is based out of Albany) is going to be calling us to discuss.
Post # 7
- Wedding: August 2013 - Rocky Mountains USA
@MsYankee: Don’t know about the registry thing, but I just wanted to say you don’t necessarily have to use FHA. We had 10% down and just got a regular mortgage through a lender… We have to pay 0.5% private mortgage insurance on top of our 4.0% mortgage rate, but our house was relatively inexpensive and that’s no big deal.
Post # 8
If you are cashing checks given to you as wedding gifts and you happen to use that money as a down payment, there is no reason to do anything special. Someone can gift you a lump sum of up to 14k before paying taxes on the money. Just receiving smaller cash gifts from someone is just that, it’s just money someone gave you. You don’t need to do anything crazy like open a bank account. When you provide your bank statements, IF they ask where the influx of checks was from you simply explain that you got married and that’s pretty much the end of it.
Post # 9
@lolot: thanks! Another reason why we should meet with the bank ASAP just to learn this stuff!
Post # 10
@MsYankee: Go to your bank and talk about this. FHA does have a program like this in the FHA process, but you have to set it up through FHA. You can’t just go into a bank and set up a savings account for this purpose. A good home mortgage consultant will be able to help you set this up.
They might also be able to talk to you about other options. FHA is a GREAT product, but there are so many other financing options that do not require 20% down. If you have good credit, these would be open to you as well.
Post # 11
@MsYankee: As others have said, there are a lot of other types of loans out there where you can put less then 20% down. For a conventional loan you only need 5% and then you pay PMI, or private mortgage insurance on top of that. I would personally not recommend a FHA loan, in particular if you plan to stay in the house for a while, because you will pay PMI for the entire life of the loan. For other loans where you PMI, the PMI drops off once you reach 78% equity. The amount of PMI depends on the amount of the loan, but for a 200k loan maybe you’d pay $100 a month?
As far as your bank account, I think that the money needs to be in the account at least 30 days or else they will want to know where it came from. You might easily reach that amount of time in between your wedding and once you go to actually apply for a loan, but maybe not if you start before.