Buyer FAQ: Can my family give me money for a downpayment?

by Josh Blumen on Thursday, May 31st, 2012

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Can my family give me the money for a downpayment on a home purchase in Massachusetts?

Absolutely! As a matter of fact, anyone can give another person – family or not – up to $13,000 per year without having to file a gift tax return. This means that mom and dad can jointly give you up to $26,000, or jointly give you and your spouse up to $52,000 for your downpayment with no additional tax filing requirement. Any amounts in excess of these annual limits requires the filing of a gift tax return.

If you’re financing your mortgage and receiving some or all of your downpayment as a gift, your lender will need to know the details. At the very least, you’ll need to provide your lender with:

  • A signed gift letter from your donor (the person giving you the money) that confirms the amount of the gift , and that this amount is indeed a gift and not a loan to be repaid.
  • A copy of the bank statement for the account that was the source of the gifted funds.

Even though the IRS says anyone can give you gift money, if you’re applying for a FHA, VA or Mass Housing loan, the gift money must come from a family member.  Each lender’s requirements may vary slightly, so be sure to check with your lender for specific requirements.

To find out more about how we can help your Massachusetts real estate closing go smoothly, please contact The Law Offices of Joshua Blumen,

P. C. at 781-575-0077.

How an iPhone Saved My Closing: A Seller’s Tale

by Josh Blumen on Thursday, February 16th, 2012

I was walking into the supermarket on a Friday afternoon when the buyer’s attorney called. My clients were scheduled to close the sale of their South Boston condo on Monday morning and now there was a problem with the title. It was a minor problem, but enough to push back the closing date until it was resolved.

The problem: When my clients purchased the condo, the mortgage held by the previous owner had not been properly discharged from the public records at the Registry of Deeds.

There were two possible solutions. One option was to get a new discharge — a time consuming process that involved tracking down that seller’s lender from ten years ago, showing that the mortgage had been paid-in-full, and waiting for a new discharge. Not going to happen in time for the closing Monday.

But if we could prove that my sellers had purchased an Owner’s title insurance policy, the closing could proceed as scheduled with a promise from the title insurance company to fix the problem. I just needed to see a copy of the settlement statement my sellers had signed 10 years earlier. If my clients had purchased an Owner’s title insurance policy, it would be noted on the settlement statement.

I called my clients from the produce aisle — and just in time. Even though they were halfway out the door for a getaway weekend and their entire household was boxed up for the move, they were able to find their original settlement docs. But now there was another problem. Everything else was in boxes, including their fax machine, scanner, and computers.

We were about to bump the closing date when it hit me: “What kind of phone are you talking to me from?” It was an iPhone. “Fantastic. Take a few pictures of the settlement statement and email or text it to me.”

Five minutes later, I was looking at clear picture of the settlement statement on my iPhone. Turns out my that my clients had purchased an Owner’s title insurance policy from First American at their closing. I emailed this information to the Buyer’s attorney and contacted First American several minutes later — from the soup aisle.

The bottom line: Thanks to a little creative thinking and modern technology, my clients sold on time and are looking for a new home in the suburbs. To find out how we can help your purchase, sale or refinance go smoothly, please call the Law Offices of Joshua Blumen, P.C. at 781-575-0077.

Refinance FAQ: No Check at the Closing?

by Josh Blumen on Monday, January 23rd, 2012

Know what to expect when you refinance

I am refinancing my home in Massachusetts to pull out cash because mortgage rates are so low.  How come I don’t get a check at the closing? 

The short answer is that there will not be any “cash-out” refinance money available until a few days after your signing. Let me explain…

When you are refinancing your home – your primary residence – you have three days after signing the mortgage, the note, and all of your lender’s closing documents to think about whether or not you really want to go through with it. This three-day period, which serves as a consumer protection, is referred to as the Right of Rescission. At your closing, you will receive two copies of your Right to Rescind which tell you how to cancel the transaction during the three-day period, at no additional cost.

The three-day rescission period begins with the first day after you sign your closing documents. For example, if we sign your refinance closing documents on Monday, your rescission period would be Tuesday, Wednesday and Thursday. Provided that you have not cancelled the transaction by midnight on Thursday, the refinance will become final on Friday, which is the day your closing attorney will receive money from your new lender to fund your new loan.

Once your closing attorney receives the money from your new lender, your attorney will record your new mortgage, payoff your old mortgage, and send you a check for any money you were getting back.

To find out more about how we can help your Massachusetts real estate closing go smoothly, please contact the Law Offices of Joshua Blumen, P.C. at 781-575-0077 or via our online contact form.