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Should Mom And Dad “Gift You” With A Down Payment For A Home?

OK, let’s face it: many of us got a little help from mom and dad when we bought our first homes back before zero-down loans. Guess what, it’s 1980 all over again. Tough Love in lending and we are back to ten,  twenty percent down payments,  tough for kids fresh out of school, loaded with education debt, to come up with. No wonder lenders are seeing a surge in kids asking M&D for help with down payments. Keep in mind, the help cannot be a loan and you must document the down payment gift with a “gift letter.” My fave mortgage blog has all the details on the right way to do a gift letter, and will even email you a sample. To satisfy underwriter’s increasingly unsatiable appetites, you’ll need the gift letter, the gift in a cashier’s check, and no co-mingling of funds on deposit. 

This is not new: the tradition at Romanian weddings was to pin money on the bride (a tradition I’d like to revive), that money going to help the couple buy their first home. There are also many ways parents can help their children buy a home without giving them a chunk of cash. For example, we let my daughter and her fiance live with us while they saved up for a down payment. You can also cover the cost of property improvements on the new home once they move in.

Call me Debbie Divorce Downer, but I am a member of the 50% divorce rate generation: what do you do if the marriage doesn’t last? Let’s say you “gift” Johnny and Susie $20,000 for a down payment on a cute M Streets cottage. They split after two years. Texas is a community property state, home is to be sold and equity split. My take: you have just gifted your son-in-law $10,000. Am I correct?

What About All The Banks?

Peggy Levinson over at the D Home blog queried me a few days ago: since there are now more banks than churches or gas stations in Dallas the USA, what would we do if they had to shutter? You may recall I told you a year ago that Wachovia’s $451,000 monthly land lease at Preston and Mockingbird is one of the highest in the nation… wonder how much traffic they are losing with all that construction? (Now Wells Fargo pays the rent.) Anyhow, Preston Center is only getting busier what with the Staubach building and more development, including rumors that George Bush will office in that building (which have been denied) or in Trammell Crow’s redevelopment of the old Parkland Hospital. But read an article today saying that smaller and mid-size banks may actually weather this economic crisis and — you’ll never guess it — profit.

Does Wall Street Shake-Out = Lower Interest Rates?

Inman asks the question.

Jessica & Tony Update

Yes, she is helping him select furnishings for their Irving home most definitely. My source is sworn to secrecy but let’s just say the darling duo has already started shopping in Dallas for their new Irving home.

Will Owner Financing Help Sell A Home?

I have a home on the market in San Antonio, and one party has asked me about seller-financing. My in-house barristers tell me that is very risky in case of default, but if I get the house back anyhow, how risky can it be? I have begun researching this issue and welcome your ideas, input. (Peggy and I both do, actually.)