Mortgage-World.com is the top online mortgage broker allowing borrowers to use a gift of equity to purchase a home or refinance.
What is a gift of equity? A gift of equity (GOE) can be a great benefit for a potential homeowner. The equity is used as the down payment to purchase a home.
To speak directly with a loan officer, call 888-958-5382.
GOE Benefits:
- Equity is used as down payment
- Enhanced loan qualification
- Family assistance
- Seller concession allowed
- Option to come to closing with no money out of pocket
GOE Requirements:
- 500+ FICO score
- Sales contract
- Buyer and seller must be related
- 15% equity of the home must be used for down payment
WHAT IS A GIFT OF EQUITY?
What is a gift of equity?
A GOE is when a relative or family member sells a home to buyers for a price below market value. It’s a way for owners to gift real estate to their children or other relatives even if these buyers don’t have enough cash to cover a down payment or the larger monthly payment that would come from a home sold at market value. The GOE is the difference between the home’s value and its sales price.
What Types of Loans Can Be Used with a GOE?
Loan types like conventional and FHA can accept a gift of equity. Because loan types like VA and USDA typically don’t require a down payment, these would not accept a GOE. Also, some Non-QM Near-Prime loan products can accept a GOE.
The GOE covers the down payment while the seller concession covers the closing costs. The only out of pocket expense will be an appraisal.
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