Can I get help with my down payment?

Kids May Need Help With Home Purchase.
As lending guidelines tighten and home prices ease, more young adults may need help from parents, grandparents or relatives to assemble enough cash for the down payment and closing costs on a home purchase. If you’re willing to help, be aware of some significant tax breaks.The IRS says any taxpayer (you) can give up to $12,000 per year to any other taxpayer (your child), and the recipient won’t have to pay the federal gift tax on the amount. Another taxpayer (your spouse) can also give $12,000. In addition, if the recipient is married, you and your spouse can each give $12,000 to that person with no tax obligation. Bottom Line: That means two parents can give a married couple up to $48,000 per year ($12,000 x 4 gifts) before the gift tax kicks in. That would equal a 20% down payment on a $240,000 property. The gifts can also be repeated the next year, say, in December and January, to multiply the available tax-free down payment.If you choose to help your child, his or her lender will ask for a gift letter from you verifying that the amount is, in fact, a gift—not a loan that you expect to be repaid. (A loan reduces the ability of the borrower to qualify for a mortgage loan and other payments.)
Lonnie Snyder
REALTOR®
Keller Williams Realty Southeast Sound
Phone: 206-406-2710
E-Mail : snyder@kw.com
Website: http://www.callsnyder.com/
Blogsite: http://renton-real-estate.blogspot.com/
Lonnie Snyder is a full time real estate agent and REALTOR® with Keller Williams Realty specializing in Residential Real Estate for buyers and sellers in Washington’s Kent, Renton, Newcastle and South Bellevue.