Introduction: Welcome to the Homeownership Insights Podcast, your leading mortgage podcast, sponsored by Fairway Independent Mortgage Corporation. Listen as experts from across the country share knowledge to help homebuyers and homeowners make the best decisions in their homeownership journey. Our next podcast begins right now.
Casey Morris: Welcome back to the Homeownership Insights podcast. I'm Casey Morris, and today I'm talking with Fairway Loan Officers Katie Beam and Debbie Mahoney about a really interesting topic, which is, how do you ask for money when you are getting married and you don't need a traditional registry, but you are trying to buy a home?
So, Katie and Debbie are going to talk about some of the ways that you can make that ask of your family and friends and also, how do you actually use that money to buy a home? Because it's not as simple as keeping the cash in an account or, you know, saving up those checks and cashing them later. There are some procedures that you need to follow. So, we're going to talk about all of that today. So, Katie and Debbie, thank you so much for being here.
Debbie Mahoney: You bet.
Katie Beam: Yeah, happy to be here.
Casey Morris: Great. So, I thought, first question for you guys, can you use cash gifts from a wedding toward a down payment for a home? How exactly does that work from a lender’s perspective?
Debbie Mahoney: Yes, it's a guideline. It's actually in our guidelines and it can be used. It's an acceptable source of down payment. Of course, you want to document that, and you'll need a copy of the marriage license to prove that you got married. And also, verification of the funds have to be you know, I would pool all the deposits. I would make it one big deposit, possibly even maybe make copies of the checks. It couldn’t hurt. And keep a copy of that bank deposit slip and the checks going in.
And you have to do it within 90 days of your marriage, so it has to be within the first 90 days after you get married. Doesn't have to be from a relative, but you just have to prove you got married. And then you put it in the bank.
Katie Beam: And when you're saying the 90 days, Debbie, that the money has to be deposited, right, just so our listeners know, the money has to be deposited and not necessarily close on their loan, right?
Debbie Mahoney: No, not close on the loan, but deposited into a bank and some kind of, it can't be kept under a mattress has to be put in the bank. Because we will have, we will have borrowers. I know, Katie, you probably hear this all the time. I have it in savings. And I always ask the question, what do you consider a savings account? Because some people just consider that as safe at home or they've given it to their parents to hold it. When you do that, it makes it makes it that much harder to document.
So, I just tell them to go open up a savings account and then keep a copy of the deposit. And of course, the bank keeps records as well. So.
Katie Beam: Absolutely. For sure. You know, and you can never over document cash when buying a mortgage, so don't think there's too much documentation. This is just something to help smooth the process for you buyers knowing and not being afraid to get money for your wedding because it is a very special day and some people may want to gift you money or write you a check or, you know, some people use the cash apps so, you know, everything can be traceable, guys. So, you want to make sure that, you know, you're not afraid to receive the funds, or afraid to ask, but you need to know that you're going to be asked to document it. So don't be mad at us when we ask for the documentation. Right, Debbie?
Debbie Mahoney: That is exactly right. And I don't know how many times I've had to say cash and it's, you know, $20 bills and hundred-dollar bills. That in and of itself is not an acceptable form of down payment. So, we have to document Venmo. What is it? Is it Zelle now? Yeah, there's lots of them anymore about how to pay. And you can document all of them.
Katie Beam: Yeah. Correct.
Casey Morris: And how does the 90 day rule work if, say, somebody, they are getting married, they have a shower and a lot of people give them cash rather than traditional wedding gifts at the shower. And then it's more than 90 days between then and the wedding. So, they get a bunch of money at the shower and then they get a bunch of money again at the wedding. How would that work? Like what would be the best practice for making sure that they can use all of those funds toward their down payment?
Debbie Mahoney: Well, that would be okay to put in the bank because you're going to have at least 60 days for it to season. So, you know, we only look back so far on our documentation. So, when they get done with the shower, they need to go put it in their savings account and just leave it. And then it will have seasoned for over 60 days, which should be okay.
Casey Morris: Okay. So, they don't have to worry about saving that money and then doing one lump sum after the wedding.
Debbie Mahoney: The safest place for that money is in the bank. So, would you do that, Katie?
Katie Beam: Yeah, I would think so, and document it. So let's just say the shower is January 15th. Right? But we're not getting married till June 15. Right? They can go ahead and put that money in the bank because by June, you know, we've already passed that 60-day mark. So that is then we're only going to need March, April, May maybe?
Debbie Mahoney: If they’re closing on a house in June or even getting married in June and closing in July. We're only going to look back the two months before so that money would have time to sit in the bank account and leave it there.
Katie Beam: And Debbie used the word seasoned. So, Deb, I don't know if you want to kind of explain what seasoned means or I can.
Debbie Mahoney: Seasoning means it's been, it's had time to just stay in the account and basically you know, the lookback period is only so far back, so if it's seasoned longer than that, that means it was deposited before then.
Casey Morris: And, you know, I think a lot of people are encountering this question of whether to overtly ask for cash instead of traditional wedding gifts, because a lot of people are getting married later. Maybe they were living together beforehand. And so, they have a lot of the household items that people would traditionally give or they're taking more of a minimalist approach and they don't want a bunch of things. They just really want to buy a house and make that investment in their future.
But that can be a tough thing to talk to people about, especially people who are a little bit more old school and feel a little funny giving money, you know, as part of a registry or something. Do you guys have any thoughts on how to sort of broach that topic or make that ask of people?
Katie Beam: Well, like I love this question and that we’re even talking about this, right, because it's not talked about enough. So, Casey, I'm glad that you asked Debbie and I to be a part of this conversation because that's spot on.
Like, my dad gave me an option, you know, 20 something years ago. You know, you can have this big wedding, or I can give you money, you know, to buy a house or get the things you need for a house. Right? Debbie, haven’t you heard parents talk about that?
Debbie Mahoney: My gosh, my parents said exactly the same thing. Don't you just want to go on a cruise and get married on the ship?
Katie Beam: Yeah, right. You know, so I felt like in my heart of hearts, right, girls, that the mindset is kind of already there. Right? Like don't overdo the one day with the finances. Right? So, you can have something tangible that's going to last you a long time. Right? The memories are beautiful. They're special. It's magical.
But having something tangible that you can say that, you know, all my friends and family helped make my homebuying process a reality. Right? And so, you know, make it like, for example, Deb, your son's getting married in March, right? Make it a winter wonderland thing, you know, and just, you know, help make my dreams come true. You know, click this QR code and donate to help us buy our very first home, you know? And you know, you can make it fun, you know, and then even create like, you know, on Facebook or even like how they have websites for couples getting married, you know, and follow our story here after the wedding.
You know, there's lots of things that I think people can do to be creative, to bridge the gap on that conversation, Casey. And that's just kind of my perspective, and I'll let them Deb a little bit.
Debbie Mahoney: Oh, I totally agree. And I don't know if you've both heard of The Knot, but The Knot is a very popular website for weddings. And I actually have, we have a loan officer assistant getting married and so I have hers pulled up. And I think when I first answered this question, it was, I had a wedding invitation that we had just received, and it said something pretty much the same. But it says, although your presence is present enough, should you want to give or wish to give the couple a gift, here are some items, and in this case, it's Jacob and Brooklyn, here are some items Jacob and Brooklyn are interested in. There is also a cash fund if you would rather gift cash. They don't say what they're going to use it for, but I love the idea of adding to for our first home. These funds go directly to the couple. Thank you for your kindness and generosity, and then love, and the bride and groom’s name. And then right on The Knot, there's a little link to gift them cash. And I know you can also do that, I've seen them put actually a little QR code on the invitation that will go to Venmo or Zelle or any of those cash apps, I'm not plugging any of these apps. I'm just saying these there's numerous.
Casey Morris: But I thought that you both made a really great point about, you know, that parents will often say, you know, I can give you money for a wedding or I can give you money for a house, or something like that. And I think that that's interesting because a lot of people don't think to have those conversations or ask their parents and say, you know, sort of open up the dialog and say, are you going to are you planning to help us with the wedding? And how would you prefer or how would you be comfortable with us using the money? And sort of, it’s just a hard topic to talk about. So, I was wondering if you could talk about that, like how do you open that dialog even with your parents to say maybe we all have this expectation that we're going to put the money towards the wedding, but are you open to us using it for a house instead or towards, you know, an investment in our future?
Debbie Mahoney: That's a really good way to put it, what you just said. And I do think, I mean, I've been married I’m not going to tell you how long, but a very long time. And way back in the day, I mean, my husband's a big Irish Catholic family, and we got money left and right from the aunts and uncles. And it was so nice and so unexpected for me. I didn't have a lot of relatives.
So, you know, I think it's probably the bride and groom are the ones that feel the most awkward about it for sure. I think everyone else, I know with my son's friends, they're all in their twenties. And then I have one son in his thirties. They're used to, you know, oh yeah, they want cash. That’s what they want. And they, a lot of times are so established by this when they get married anymore, they've already got all the silverware and dishes and towels and things that they need. And those aren't memorable wedding gifts. So, I mean, what better way than for a down payment for a home?
Katie Beam: I fully agree, too, you know, and you hit a really good point that there's different demographics, right? And different seasons of life that kids are getting married. Right? Are young adults or mid-adults. You know, like I have, you know, some very good friends of mine that didn't get married until they were almost 40, you know, and like you said, they’re well-established in their careers, you know, they may have already bought a first home by themselves, but they haven't bought a home with their partner or their spouse. Right?
Or you've got kids that are in their senior year of college. They're not really kids. They're young adults. I am calling them kids because I've got kids that age, that are having these conversations. And making everyone comfortable, to Casey’s point, is that the bride and groom that goes to mom and dad on both sides, you know, because I think more and more families now are helping than it just being all on the bride. Y’all correct me if I'm wrong.
Debbie Mahoney: That's absolutely true.
Katie Beam: I think it's more of a family affair. I can tell you from personal experience when our oldest son got married, like we all split it in half, like everything from the showers and that kind of thing. Yeah, that's exactly what we did. And we were proud to do it that way. And then the kids had no stress. Right? But then again, some families may not be able to do that. Right? And they may not have mom or dad to ask to help for a wedding or, you know, they may not want to ask mom and dad. They may want to do it on their own.
And that's just I think when we as loan officers have to have the know-how and to talk to them, you know, and we kind of have to I think, Casey on our end, right, Debbie, is to ask those questions. When we have our initial consults, you know, or when our realtor partners bring the clients to us. You know, they kind of give us the back story before we call them, right, Miss Debbie? So it's not a cold call, right? We can say, hey, you know, you know, Joe sent us your information, said that you guys are looking to buy your first home and that you're getting married. You know, we kind of have some information.
Debbie Mahoney: How exciting is that? And it's just one more tool in the toolbox. I know when we're working with our borrowers, you know, sometimes we have to brainstorm and we'll come up with an option they never thought of, you know, and gift funds as a source of down payment is something we bring up a lot.
And I know we were lucky enough to have my husband's parents give us our first down payment. And it was back in the day where you needed the 20%, you know. So, we've definitely come a long way. And I think there's still that misconception. They don't realize that if they have really good credit, they can get into a first-time house for as low as 3% down or what have been some we don't even need any, but it's still good they need money in their accounts if they're going into homeownership.
Katie Beam: Yeah. Because, you know, the worst thing we can do is set them up for failure, you know, and not set those proper expectations and going over their budget and what they can afford and what they expect. And, you know, we look at their bank statements right, Debbie, and we see their spending habits and we're like, oh, you're telling me you can afford $2,000 a month, but your bank statement is telling me another story. So, let's talk about that.
Debbie Mahoney: Right, let's talk about that. And then they always want to know how much can I be preapproved for? And I don't know the last time that I looked at that. I look at, what do they feel comfortable paying? What are they already paying in rent, especially, and more and more of them live at home. I know we're kind of getting off track a little bit here but live at home still until they do buy their first house and they're not paying anything. So, I counsel them to take about six months and put away what they feel comfortable with. Then then they will have their down payment.
Katie Beam: You know, what do you do with all this cash when you do get it, right? Basics like how do we document? What do we do with it? And then how are they going to spend it? Well, we want them to spend it buying their brand-new home. Better than blowing it, right, put it in something that's tangible, that's an investment that's going to bring you return down the road and, you know, start building a legacy.
That's what I talk about with my clients, you know, first-time homebuyers is building a legacy for you and your family. And in my market, I work with a lot of families that may not have homeowners, you know, in their bloodline, you know, and people who haven't bought and they're the first ones and what a blessing that is. And how we talk to them about that not only through their big day and getting married, but you're not only getting married, but you're also wanting to buy your dream home with your husband or partner or wife, you know, whatever your, you know, your love affiliation may be, it doesn't matter. It’s love, right? So, and it's however that may be, but we just want to be a part of it, right, Miss Debbie?
Debbie Mahoney: We do love being a part of it. I love my job.
Casey Morris: I think that's a really, really good point that, you know, having some understanding of how do you find a good loan officer and you know, having giving people that context of, you know, what is it like to build that relationship is really important because, you know, most people might think, okay, yeah, after we get married, we want to buy a house. But you're not thinking about connecting with a loan officer. But if you do connect with a loan officer beforehand, then you do get that guidance. But to know that you can put some of these things in place and then, you know, form a relationship with a loan officer and get that insight as to, okay, you guys are probably going to get some money for your wedding or, you know, maybe you have a cash fund or something or to even educate people about that option and say, you know, you might want to think about this like, you know, here's how you might do it. I think that, you know, when it comes to weddings, people aren't thinking about the mortgage, but building that relationship early on is going to allow them to put themselves in a much better position.
Debbie Mahoney: You take at least, at least a year to plan a wedding. They say that you're under the gun if you don't have at least a year. Why would you not take that time to also be thinking about buying your first home? It definitely goes hand in hand.
Casey Morris: And I think you know, when people, I love Katie, what you said about building a legacy. And I think that's a really great way to bring people into that who, you know, if you are worried about having those conversations with people about, you know, we're going to ask for cash or we don't need traditional gifts, but if you want to give something, you can contribute to our house fund that it's it goes beyond saying, oh, we're looking for cash for our down payment.
It's saying this is where we're planning to, you know, we're building our future here. Maybe we're going to have a family or this is our vision and you're part of that by contributing to this. So, it's not just, you know, where some people might say, oh, it looks like a cash grab. It's really not. It is part of building the couple's future. So I think that's a really nice way to position it and then to work with a loan officer to make sure that you're able to make that happen based on people's help.
Katie Beam: Yeah. And with new construction booming all over the country, right, you know, a lot of times they can be planning their wedding but they also be under construction for their new build that they're going to close like the week of the wedding or when they get back even. Right? So, what a beautiful way to even have a picture of their new construction home. Have a beautiful picture of it. You know, and this is our legacy, where there's just so many different ways that I feel like young couples or older couples, you know, should not be afraid of this ask and that they should actually be really proud and excited for this ask.
Again, it's legacy. It's homebuilding, it's homebuying. It's, you know, having a place where we're going to lay our heads at night, you know, and being a part of something so special.
Debbie Mahoney: One more note on that is that you're just contributing towards it. So, one couple might feel that, you know, $50 is what they are going to contribute. And you want to make sure that, you know, the ask is just for what's best for the attendees or the people that are invited. So, I know my son he has on his regular registry contribute towards, I think it's Crate and Barrel, but they have you know because they want some nicer things that you know everyone doesn't just want the candle sticks and you know, they want nicer things. But they would never, they would never think of asking for that much from one person. But there's a little spot that says just contribute towards whatever the gift was. And, you know, that's another good point that we're not asking the world of the people. You know, we're just wanting them to contribute what's comfortable for them.
Casey Morris: Yeah. Like whatever you would have spent on a gift to begin with, then you maybe just put that in cash, you know? And yeah, I think that's a really good point, that maybe it seems overwhelming when people see a cash fund, but it's like it's literally however much you were going to spend, you just put it towards the house and every little bit really does add up. So, helping people to understand that how meaningful it actually is. And then, you know, like you said, you're not asking for the world.
Katie Beam: Right. Well, and the cool thing is with these QR codes is you put QR codes at every table. Right? Pay to dance with the groom, pay to dance with the bride. All proceeds go toward our down payment, you know, and, you know, and even like I've even seen it where they do auctions to dance with the bride, you know, and auctions to dance with the groom and how fun that is getting people going, you know, in the reception area, you know. So there's so much that we can do and that we can.
Casey Morris: Well, thank you both so much. This is really great. I mean, I think these are all just really great insights and ideas and hopefully it will help couples who are getting ready to get married and who are looking at all of these big life milestones, which are wonderful but can be a little bit overwhelming, especially from a financial perspective. Hopefully this gets them thinking about what's possible and what they might be able to do. And, you know, particularly to just connect with a loan officer and just start the conversation about how they can, you know, how they can become homeowners and start this new chapter of their lives.
The information in this podcast is distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway Independent Mortgage Corporation.
Copyright©2022 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800.All rights reserved. Fairway is not affiliated with any government agencies. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restriction sand limitations may apply. Equal Housing Opportunity.
Fairway is required to disclose the following license information. AZ License #BK-0904162; Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, License No 41DBO-78367. Licensed by the Department of Financial Protection and Innovation under the California Financing Law, NMLS #2289. Loans made or arranged pursuant to a California Residential Mortgage Lending Act License; Georgia Residential Mortgage Licensee#21158; For licensing information, go to www.nmlsconsumeraccess.org;MA Mortgage Broker and Lender License #MC2289; Licensed Nevada Mortgage Lender; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker-NYS Department of Financial Services; Rhode Island Licensed Broker &Lender; Fairway Independent Mortgage Corporation NMLS ID #2289 (www.nmlsconsumeraccess.org).
The information in this podcast is distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway Independent Mortgage Corporation.
Copyright©2022 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. Fairway is not affiliated with any government agencies. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity.
Fairway is required to disclose the following license information. AZ License #BK-0904162; Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, License No 41DBO-78367. Licensed by the Department of Financial Protection and Innovation under the California Financing Law, NMLS #2289. Loans made or arranged pursuant to a California Residential Mortgage Lending Act License; Georgia Residential Mortgage Licensee #21158; For licensing information, go to www.nmlsconsumeraccess.org; MA Mortgage Broker and Lender License #MC2289; Licensed Nevada Mortgage Lender; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker-NYS Department of Financial Services; Rhode Island Licensed Broker & Lender; Fairway Independent Mortgage Corporation NMLS ID #2289 (www.nmlsconsumeraccess.org).