Gift funds
Money given by a relative or other allowed donor toward a down payment or closing costs, with no expectation of repayment. Lenders require a signed gift letter and proof of the transfer.
Also called: gift letter, gifted down payment, gift money
Related terms
The part of the purchase price you pay in cash rather than borrow. A larger down payment lowers the loan amount and can remove the need for mortgage insurance on a conventional loan.
Programs, often run by state or local housing agencies, that help buyers cover the down payment or closing costs through grants or low-cost or forgivable second loans. Most have income, price or first-time buyer rules.
The lender's review of your income, assets, credit and the property to decide whether to approve the loan. The underwriter often asks for more documents before issuing final approval.
The total amount the buyer must bring to closing, usually the down payment plus closing costs minus earnest money and any credits. The final figure is on the Closing Disclosure.
Savings left over after closing, often measured in months of mortgage payments. Lenders may require reserves for jumbo, investment and multi-unit loans to show you can handle a setback.