Patricia wants to use a gift from her parents for the down payment on her co-op purchase. How do share loan lenders typically handle gift funds compared to traditional mortgage lenders?
Correct Answer
C) Share loan lenders may have stricter gift documentation requirements due to the personal property nature of the security
Share loan lenders may impose stricter gift documentation requirements because the personal property security (shares and lease) is considered less stable than real property. Lenders want to ensure borrowers have genuine financial commitment and ability to maintain payments.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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