Profile picture for ptaritchie

Can a parent use a HELOC to finance the mortgage for a child to pruchase their home

  • October 10 2009 - Stafford
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Answers (5)

Yes and by the way the 5% doesn't apply to FHA loans and pending on the amount of the gift you may get away with all but $500 of the child's money into the transaction.
  • December 23 2009
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the child would have to have 5% of their own seasoned  funds. then you can Lend them the rest.
  • October 21 2009
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Profile picture for ptaritchie
it is not a gifting of the amount -the HELOC would allow me to  serve as lender.
  • October 11 2009
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Profile picture for Ray Stevens
Absolutely!

For your child, it will be documented as gift funds.  Give the estimated amount to your child ASAP, because underwriters want to see the HELOC check clear your account.  Their broker should be advising your child to collect the following to document it:

1.  HELOC statement showing the gift clearing your account.
2.  Gift letter signed by the doner.
3.  Statement from your child's bank showing the funds have been deposited.
  • October 11 2009
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Certainly, if you have the equity and enough available on your line to do so to cover the new purchase.

Good Luck
  • October 10 2009
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