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Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you.

Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower.

If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags.

All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.)

Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment.

(Another option: cheaper house.)

EDIT:

The below comments provide examples where gifts were/are NOT a problem.

My experience from buying a house just a few years ago (and my several friends who bought house in the same period, some with family gifts and some without) is that it IS an issue.

Your best bet is to TALK, IN PERSON with an actual mortgage broker in your area who can go through the options with you, and the downsides to various approaches.

Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you.

Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower.

If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags.

All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.)

Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment.

(Another option: cheaper house.)

Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you.

Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower.

If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags.

All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.)

Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment.

(Another option: cheaper house.)

EDIT:

The below comments provide examples where gifts were/are NOT a problem.

My experience from buying a house just a few years ago (and my several friends who bought house in the same period, some with family gifts and some without) is that it IS an issue.

Your best bet is to TALK, IN PERSON with an actual mortgage broker in your area who can go through the options with you, and the downsides to various approaches.

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Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you.

Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower.

If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags.

All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.)

Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment.

(Another option: cheaper house.)