Mortgage News

The Bank of Mom & Dad has become busier since no-down-payment mortgages have practically disappeared. "In the last six months, I've dealt with more parents than I ever have," said Jay Seville, an associate with Re/Max Allegiance in Arlington. "They're part of the financing now, either with the down payment or a secondary loan." FHA loans allow gifts for the entire down payment and closing costs, while conventional loans can be more restrictive.

Some families are avoiding the required paperwork by turning over the money months before the home purchase so it can be considered the buyers' own. Both financial advisors and real estate practitioners who have experience with these kinds of family loans seek to make sure that everyone understands the terms of the loan. They advise that the terms be written down for future reference in the event of memory disputes or legal conflicts. "There are two types of pain in life: the pain of discipline and the pain of regret," said Nicholas Yrizarry, founder of a wealth management group in suburban Washington DC. "In the case of family matters, one must have discipline upfront . . . rather than having pain of regret later.” Source: The Washington Post ...q