Deanna Valeo

Giving the gift of home ownership to your children and grandchildren; it is easier than you think April 4, 2015

Giving the gift of home ownership to your children and grandchildren; it is easier than you think.


QUESTION:  My daughter and son-in-law (he really is a good guy) want to buy a new home and we would like to help them out with their down payment.  We just got the GREAT! News; we're going to be grandparents!  How much do we need to give them to buy their new home? We don't want them to use all their new savings for a down payment. 

ANSWER:  First of all what a wonderful gift you are giving.  Home prices have been rising and many buyers your daughter's age want to buy for the first time.  It makes sense to buy a bit bigger home if you can and lock in record low interest rates. (see: Forbes Report below)

You can actually gift as little as 3.5% of the purchase and this will cover the down payment on a FHA loan.  Fannie Mae allows buyers to have 100% gift funds; you will need to gift 5% towards the down payment.  (FHA allows as little as 3.5% to cover the down payment; however, the non-tax deductible monthly mortgage insurance makes it a more expensive option especially if you can give a bit more).  Please keep in mind typical closing costs, outside of the down payment, are close to an additional 2-3% of the purchaes price:  ask your loan office for specifics for your case.

If you have more to contribute you may want to consider the Federal Gift Tax limit for 2015, you (and your family members) have a gift tax exclusion of $14,000 per gift.  The good news is you and your wife can gift $14,000 to your daughter and son-in-law for a total gift of $56,000 without causing a gift tax (see IRS link below)

IMPORTANT DETAIL:  Unless your children have had your gift in their bank account for 90+ days, plan on needing to supply cancelled checks and sometimes your account statement as proof the funds have come from a "legal source".  Mortgage rules require that we "source ALL large deposit" funds (this is part of the Patriot Act and came from the 9/11 commission).  If you are worried about your children seeing your overall account, please know the case's loan officer has no need to  share your information with them; simply request it remain private and it will.

Again what a great gift to your kids or grandchildren; home ownership is often the biggest personal expenditure families will make.  Your gift can help give them lasting financial security in their new home.   NMLS 91421 and 91428   Equal Housing Lender

Rents Keep Going Up! April 27, 2015

 Rents Keep Going Up!

According to the Wall Street Journal today, low inflation would be even lower (1% vs. 1.4%) if rents hadn't increased year over year by 3.5% topping off a run of rent increases that started in November 2010.  Since September 2011 national rent increases have been around 3% per year, meaning if your rent was $1000 then it will be $1,142/month today and there is no sign it is slowing.

According to the labor department, the reason is supply and demand more people getting jobs; however, wanting to be cautious about buying.

In Charlotte rent increases are even faster, 6.1% year over year, according to a recent Forbes article.

Home Buying update:  In the Charlotte Market inventory is tight and deals are made quickly on a new home.  If you are ready to get out of renting and lock in a more predictable housing payment we can help.  Give us a call today.

The Valeo-Croy Team 
MLS 91421 and 91428