Troy Hansford for Denver Real Estate | 303-617-0607 | HansfordTeam@TroyHansford.com
          

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Denver Real Estate: Using Gift Funds To Help Purchase Your Home

There are plenty of viable financial sources available for conducting real estate transactions. One of the most popular sources involves the use of “gift funds”, which provide a prospective home buyer with an easy alternative for acquiring the necessary money to fund their real estate transaction. The concept for this method is quite simple: Someone “gifts” you the money, which you in turn apply towards your down payment, or the overall value of your home.  While I understand this might not sound like an entirely legitimate process, it’s important to note that roughly 25% of home buyers utilize gift funds as a means of payment.
Obviously there are important limitations and compliance measures for gift funds which can be levied by both the lenders involved in your home’s purchase, and the IRS. These entities will impose limits on the amount of money that can be gifted to you (IRS), and the amount of gift money you can apply towards your home’s purchase (lenders).
In addition to these limitations, you will also be required to document the origin of the money and sufficiently account for how/where it was used. A complimentary “Gift Letter” most also accompany the gifted money, serving as an additional stamp of authenticity.
If you believe gift funds could be a potential source of money for purchasing a home, do not hesitate to give us a call so we can arrange an appropriate lender for you who can ensure the process works accordingly and in a smooth manner.
If you’re interested in gift funds for the near future, but aren’t actively pursuing the purchase of a home, you will still have the option to set aside gifted money in the form of “season funds”, which will also serve in making the process easier and more efficient whenever you decide to buy.
Once again thank you for joining me on my video blog. Please reach out to me with any questions you have regarding the use of gift funds, or if you just want more information about current conditions for the real estate market in Denver. Thanks and have a great day!