|Down-Payment Gifts Save Taxes!|
What could be a better gift than tax-free help with a down-payment on a home?
NOTE: The following information was provided by a loan officer and a accountant, however you should always talk with a tax expert and financial adviser about your specific goals and financial situation.
Gifts are involved in approximately 25% of all of the mortgage loans that are transacted. Gifts from
family members and relatives are allowed under IRS and lending guidelines but lenders do not report the parties involved to the IRS.
Under current IRS guidelines (please consult your accountant for tax advice and ramifications) each parent or relative can give up to $15,000 (up from $14,000 last year) to each child or relative every year. That would mean that a mother and father can each give $15,000 a year to each son, daughter, and/or grandchild that would amount to $30,000 a year in total.
If both sets of parents want to help with the down-payment on a house; each of the parents can give each borrower a gift of $15,000 per year. That would add up to $60,000 for both of you! That is a significant amount of tax-free money to help you buy a home for your family! Of course, a gift can also be less than $15,000, so give what you can.
That amount is per calendar year and not based on every twelve months. That would mean that they could give $60,000 (or more) in December 2018 and an additional $60,000 (or more) in January 2019. With only a couple of monts left in 2018, this is the time to bring up the subject with your family. What could make them happier than helping you buy a house and saving money on taxes?
For most types of mortgage loans, you will need to have 5% of the amount of the down-payment on your own, however, there are exceptions. To find out the exceptions and details about how gift money can be applied to your down-payment contact a reputable mortgage broker.
Visit www.marilynmessenger.com to see homes for sale, get the latest real estate market reports, and learn about having your own buyer agent on your side.
About the author: Marilyn Messenger, a licensed real estate broker, Certified Residential Specialist, and Accredited Buyer Representative, and Certified Luxury Homes Marketing Specialist is associated with Andrew Mitchell and Company in Concord has been representing home buyers and sellers in Wayland, Sudbury, Maynard, Stow, and Concord MA since 1993. www.MarilynMessenger.com for more.