Last minute sourcing of gift funds for closing!

[Anonymous]

So my daughter is gifting us money for closing, Closing is June 1st. Anyways she need her check from this Friday to complete her gift funds for us. She gets a paper check, sometimes her banking app will allow her to have the funds immediately for access but sometimes it doesn’t. Even if it does allow her, I think the money will say pending in her account even though we can use the money. So I don’t know if that will work for the u/w. Can we cash her check at the bank listed, make a copy of the check and maybe get a receipt from the bank. Then go deposit the money into her account and wire the money? The amount cashed and the amount deposited will be a bit different because the bank cashing the check will charge a small fee. Will this be sufficient for sourcing purposes?

[CreditInspired]

HI OP,

I copied parts of this from a quicken loans blog so hope it helps:

You can show evidence of the transfer with the donor’s withdrawal slip and your deposit slip, or a copy of the check and evidence that it’s been deposited into your account. If the gift is made at closing, there must be a copy of the donor’s certified check and a settlement statement with the exact amount of the gift.

For FHA loans coming from a family member or close friend, some additional documentation is required: 

We need a copy of the canceled or certified check. We also have to be able to verify that the donor had the money for the check in the account for at least 30 days prior to the gift. This is verified through bank statements.

If the donor borrowed the funds, they need to be able to document the source. The gift cannot come from cash the donor has on hand.

And to be on the safe side, always, always ask your lender because it's the UW's opinion that counts.

GL2U

[JVille]

Wire transfer from daughters account to title company is also allowed. Checkbwith your lender.

[Anonymous]

I was already planning on doing the wire transfer, but either we have to go on Friday 5/25 and deposit the check, then wait until Tuesday 5/29 to wire the money to title(closing is that Friday 6/1). Or we can try to cash the check from the bank it was issued from and deposit the cash into her account, then wire the money on Friday 5/25. I figured the bank wants to money at title the sooner the better because they are asking for the wire transmission receipt and a bank transaction history from date of wire to 30 days prior. I just didn’t know if cashing the check at the other bank and depositing it, how I would be able to have a paper trail to source that money? Could I make a copy of the check first?

[JVille]

Wire the money Ditect from Donors account (where the money sits today) direct to title company. Escrow officer and LO can tell you exactly how they want it done.

[Anonymous]

My daughter is gifting us $600, she currently has $325 in the account. She needs her check from this Friday to complete the money she needs to gift us. I’m trying to figure out the fastest way to get that money into her account on Friday so that it can be sourced, then wired on Friday.

[JVille]

The Lender will want to know where that money is coming from since it is not already sitting in her account.

[kc0039]

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@Anonymous wrote:
My daughter is gifting us $600, she currently has $325 in the account. She needs her check from this Friday to complete the money she needs to gift us. I’m trying to figure out the fastest way to get that money into her account on Friday so that it can be sourced, then wired on Friday.

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FHA, VA, or Conventional loan? It looks like you can do the deposit without having to provide any additional docs IF and only IF:

1. Conventional loan - less than 50% of qualifying income.

2. FHA & VA loan - less than 1% of the sale price of the home

Overlays may apply to your lender

[Anonymous]

Good news! We only need the $300 that is in her account now to close!! Going to do the wire to escrow tomorrow then wait for our final underwriting.