Dear Monty: We are first-time home buyers. We didn’t plan on buying a home for several years. We recently learned that we will soon receive a substantial gift. Our benefactor conditioned the gift on a home purchase. We both have satisfying careers and secure positions but need more knowledge or experience in buying a home. We would appreciate your help in getting started. What are the steps we should take to buy a home?
Monty’s Answer: First, it is essential to confirm the gift details. You will need a letter from the person who will release the funds and under what conditions. Depending on the size of the gift, you may need a mortgage. Different types of lenders make mortgages: banks, mortgage brokers, and credit unions. Shop each to learn their differences, as you will also determine the price range you can comfortably manage. You may not hear two crucial points: the ongoing maintenance costs of home ownership and the five-year rule. When using an agent, this rule is a factor but not an issue with a for-sale-by-owner home (FSBO)….