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I am buying a house and the lender needs proof(bank statement) that I have enough to cover closing costs. A family member is going to help pay closing costs. Will it hurt me when they look at my bank statement and see that the amount to cover closing costs came form a family member? Its a USDA Rural Housing Loan.

4 Thoughts on Will it hurt me if I have a family member deposit a check into my bank account for closing costs?
  1. Reply
    Brother Otter
    August 12, 2011 at 11:49 pm

    Shouldn’t. If the money was a gift, then it’s yours once it’s deposited.

  2. Reply
    Paul in San Diego
    August 13, 2011 at 12:18 am

    You have to have the family member submit a gift letter explaining that they gave you the money as a gift and you don’t owe it back. Whenever you have money somehow suddenly appear in your bank account when buying a house, you have to have a paper trail of where the money came from. Otherwise, it looks like you might have gotten some kind of short-term loan from someone and that counts against your debt-to-income ratio, which could determine whether you still qualify for the loan.

    Contact your real estate agent or lender about it. Find out what they require as far as a gift letter (for example, if it must contain certain verbiage or be notarized) and get that taken care of right away. Something like that could cause a delay in funding as you get close to close of escrow.

  3. Reply
    August 13, 2011 at 12:21 am

    I get the feeling that if you were a 100% comfortable you would not be asking the question. It in all cases would be considered a form of loan fraud, a federal offense if you aren’t fully disclosing where funds are coming from. Are they allowing for a gift? Gift letter? If so, they should let you know if it is okay. Don’t do anything behind the curtains.

  4. Reply
    August 13, 2011 at 12:45 am

    It could because you will have to explain where the funds came from. Does the family member expect to be paid back? That could hurt. If not it might not. Why aren’t you finding out from a source who knows your case, like your loan officer?

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