S/O Borrowing for down payment

watergirl

Fri, Jan 29 2021, 8:08 am

moonstone wrote:

Yeah, borrowing from friends to buy a house is a totally foreign concept to me. It would never have occurred to me to do that- and I wouldn't have wanted to in any case.

We used our savings for the down payment. Both sets of parents gave us a few thousand dollars each, but it was something they wanted to do- we certainly didn't ask for it, and we could have managed without it.

Once you borrow from a friend, the relationship changes. Is it really worth it?

I was especially confused on the other thread when someone said if you get a gift or borrow, you declare it as income to the mortgage company/bank. Thats literally not how it works. When they are making the final loan approval, they comb over everything with a fine tooth comb and question every large-ish deposit or withdrawal into all of your accounts from the past number of months. They questioned why we had, one time, like $400 leave our account at one point and we had to explain and prove how we pay tuition through another account so this was a transfer of our funds into that account... its nuts.

OP, if there was an "other" option for this thread, I would have gone with that. We had only a 3% down payment and the seller paid it at closing. We got a special and unique Fannie Mae loan product that does not charge PMI for a down payment less than 20% so we're good in that regard.

To afford our house, we did need about $1000 for the earnest deposit, $900 in closing fees, $500 for the inspection and another $400 for a radon inspection. Also we paid I think $600 to have a video inspection on our sewer pipes. For THAT, we did get a gift for some of it, like half, and the rest we paid.

We also bought in a neighborhood thats more on the outskirts of where the frum people live and there are "only" 6 frum families on our block. We moved to this city in particular because we heard amazing things about it, loved visiting, and the housing prices are not crazy. Taxes are normal.

You sometimes have to decide when you can't have it all, what you are willing to give up. BH I love the choices we made.

amother

Navy

Fri, Jan 29 2021, 8:14 am

from the other hand we gift our children 50k as long as they can save 50k and meet our gift so they have 100k down. Those that have inlaws that have the ability to contribute as well are lucky. The others God helps in other ways I find.

amother

Forestgreen

Fri, Jan 29 2021, 8:46 am

amother [ Blonde ] wrote:

Our down payment was $7000. Come join us in Cleveland 🤣. We used our tax return and a few thousand in savings.

Wow! That is amazing!! But not everyone from Cleveland has such a small down payment! We paid $45,000 for ours. And I know this is also probably a joke compared to other places...

amother

Blush

Fri, Jan 29 2021, 9:01 am

Not a penny from parents...
Though one grandfather lent us $5000 for a few days while we waited for tax return to arrive and said return only $4000. So that was a beautiful gift! We pinched together the rest to move out of our toddler size shoebox apartment with keh handful of children.

amother

Rose

Fri, Jan 29 2021, 9:27 am

saved up for 10 yrs.No gifts
down payment was $150k

In Brooklyn.

amother

cornflower

Fri, Jan 29 2021, 9:32 am

We had 75k saved up and borrowed 20k. We had it all paid back 4 years after the purchase.

amother

Dodgerblue

Fri, Jan 29 2021, 9:52 am

I didn't borrow at time of closing, but I bought a house pretty late in game and home prices had doubled. I wish I wouldve had courage to borrow earlier and get in on cheaper prices. I could've borrowed very responsiblty being that I had an income to pay it off easily.
I did get a large gift from my parents when I got married and I put that away

EMEN

Fri, Jan 29 2021, 10:25 am

What thread is this a spinoff of?

singleagain

Fri, Jan 29 2021, 10:30 am

EMEN wrote:

What thread is this a spinoff of?

https://www.imamother.com/foru.....18572

amother

Mustard

Fri, Jan 29 2021, 10:31 am

the one about her husband wants to lend out money.

I think it would be interesting to break up the borrowing in to family vs friends because I think it's differnt for family to take that risk vs friends and then for the friends one chassidish vs not.

ETA: I believe we still have 6 figures that we are owed between family and friends so we do lend out. As I said on the other thread lending for a downpayment isn't simple and if someone is pulling "shtick" they aren't someone I would lend money to.

amother

Cobalt

Fri, Jan 29 2021, 10:32 am

my inlaws gave us 50k for our first house. we sold that house and that 50k (+more at this point in equity) went towards our new down payment of 120k which we paid the rest ourselves

amother

Sienna

Fri, Jan 29 2021, 10:35 am

amother [ Blonde ] wrote:

Our down payment was $7000. Come join us in Cleveland 🤣. We used our tax return and a few thousand in savings.

And mine was closer to 25k and that was over 5 years ago. Which is still very low, I just don't want people to get the idea that 7k is standard because it isn't.

amother

Forestgreen

Fri, Jan 29 2021, 10:52 am

amother [ Sienna ] wrote:

And mine was closer to 25k and that was over 5 years ago. Which is still very low, I just don't want people to get the idea that 7k is standard because it isn't.

I think it also depends what percent you are putting down. We put down 20%. I know many people who put down much, much less than 20% or nothing (somehow?!).

amother

Vermilion

Fri, Jan 29 2021, 10:56 am

You can get a mortgage with as little as 3% down.

amother

Chocolate

Fri, Jan 29 2021, 11:10 am

Borrowed close to $200k from my parents for our down payment (20%). Committed to pay it all back (plus interest) over 10 years and bH we did. Was the biggest load off my shoulders the day it was finally paid off.

amother

Hotpink

Fri, Jan 29 2021, 11:11 am

I think DH's parents gave him down payment as a gift for his first house. The entire house price was only $225K, so it's not as hard to do as in places like New York City.

amother

Purple

Fri, Jan 29 2021, 11:15 am

We planned on using our own money and had enough for down payment. . DHs parents offered to lend us 30k so that we’d pay less interest

We ran into a problem when we transferred some money to early into our account. They made my in laws sign a paper that the5k was a gift and we won’t pay it back. The final amount they gave us day of closing and it wasnt an issue. (We had enough cash in our accounts to cover the amount we promised for down payment but mortgage company was still very on top of money going in and out)

amother

Green

Fri, Jan 29 2021, 11:39 am

amother [ Chocolate ] wrote:

This may be off topic, but anyone borrowing money - whether from parents or friends or any other Jews - should be very careful if planning to pay back interest, as there are many Torah prohibitions that can be transgressed. There may be ways to do it with a heter iska, but please consult a competent Rav before getting involved in such an arrangement.

amother

Chocolate

Fri, Jan 29 2021, 1:41 pm

amother [ Green ] wrote:

Yes, of course we are aware of the issur of ribbis and we borrowed the money using a heter iska.

amother

Copper

Fri, Jan 29 2021, 2:46 pm

A guy in dhs kollel knocked on our door out of the blue and asked to borrow money towards a down payment.

I was FLOORED. And you know what? My dh welcomed him in, had a talk, and lent him $15,000!!!!

Dh said on of the greatest form of chesed is lending someone money so they can become financially stable and people do it all the time.

The man got cosigners, ehrlich people who agreed to pay the loan if he chas vshalom defaults.

It took me a bit to wrap my head around the idea and then I reminded myself, all the money I have right now has been lent to me by Hashem.