Using Wedding Gifts Toward a Down Payment for Your First Home
Your wedding checklist is getting shorter and shorter! But you're stuck on one thing: the registry. You've been living on your own for a while now, so you don't really need to register for the blender and the fancy plates. So, what do you register for?
You could ask your friends and family to donate to your honeymoon fund so you can finally take that three week Europe tour. But if you want to be really grown up about it, you could skip the honeymoon and ask them to donate to a fund for a down payment on a house instead. There are a few things you'll need to think about before the wedding.
Use mortgage calculators to see how much you'll need
It's great to be saving for a down payment, but how will you know when you reach your goal if you don't know how much you need? Use our mortgage calculators to see how much house you can afford with your down payment and how much you'll be paying each month.
Option 1: Plan ahead and crowdsource it
There’s no shortage of crowdsourcing sites these days. So, it’s no surprise that there are sites specifically for buying homes. Sign up for a site like Feather the Nest before you even send out the invitations. Let your family know monogrammed towels are nice, but you’d really prefer help with a down payment on a house.
Option 2: Put it in a savings account and wait
Deposit all your gift money into a savings account right after the wedding. Most lenders like to see that you’ve had your money for a certain period of time (between 30 and 90 days) before they lend to you. So, if you don’t have a house picked out already, just wait it out. Once your money is seasoned, you shouldn’t have any problems using it. This can be a tricky one if you didn’t live together before you got married. No one wants to start their lives living in separate apartments, so what do you do if you want to buy the house right away?
Option 3: Source it
If the money for your down payment has been in your account for less than 60 to 90 days, lenders will have to source it. This is so the lender can ensure you haven't taken out short-term loans to cover the costs of buying your house.
When money’s sourced, the person who gave it to you will need to provide bank statements and a gift letter to show that the money is legitimately yours. It’d be awkward to ask your dad’s boss to source her $100 gift. But if your godparents gave you a nice gift toward your down payment, they might be more willing to help you out.
Now that you have a great plan for your down payment, you can rest easy and focus on your wedding!