Back to Glossary
Gift of Equity
Updated
January 19, 2023
When someone sells a property to a family member or close acquaintance for less than the current market worth, this is a gift of equity. The difference in pricing indicates the contribution of equity. In most cases, the gift of equity serves as the homebuyer's down payment. It makes it easier for them to obtain a mortgage by increasing the value of their home. When family members sell their homes, a gift of equity is frequently employed. For example, while selling the family house to their child, parents may give equity.
Related Topics
10 Best Home Builders in Nashville, TN: Find Your Dream Home Today
Wesley Mortgage 2023 Year-In-Review
What Is a Property Tax Lien
What Is an Adjustable Rate Mortgage (ARM)?
Navigating the Process of Mortgage Modification
What Is Non-Recourse Lending?
What Is a Short Sale?
When Is the First Mortgage Payment Due?