Did you know February is National Weddings Month? In honor of this occasion, I thought it would be a good idea to talk about how all that wedding cash can be used for the best gift: a home of your own.
The good news is you can use all that money your friends and family shell out for your big day toward the mortgage down payment on your new home. However, there is a problem with depositing all that money into your account after the wedding: It's not considered sourced and seasoned funds.
No one wants to actually source Aunt Millie's $20 with a deposit slip, copy of the check, copy of her bank account showing sufficient funds and a signed gift letter.
So how do you avoid this issue?
It's as easy as 1-2-3.
1. Set up a simple savings account called the bridal registry account prior to the wedding.
2. Deposit all the gift money into that account.
3. Use these funds for your 3.5 percent required down payment on your Federal Housing Administration home loan.
If you're starting the homebuying search before your wedding day, just set up the account ahead of time to help with the down payment.
Taking these initiatives will help you get a fresh start for your new home with your groom or bride. But just like anything else, talk to your mortgage professional to make sure he or she can use these funds without any issues. It pays to cover all your bases.
Mike Cox offers helpful homebuying hints at RatesinMotion.com, a daily video blog providing transparent information to help consumers find the best deal on a mortgage. He can be reached at mike @ ratesinmotion.com.