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Marriage and buy your first home: two days representing the happiest and most expensive days that most people celebrate.
According to wedding registry platform Zola, the average wedding is $36,000. According to real estate data company Attom, the average home’s down payment is $55,500. In a market where the baby boomer generation is dominated, rising interest rates and inflation allow young couples to feel housing out of reach.
Is it possible to have both?
Instead of the typical “air fryer, flashy gravy bowls, blenders and towels,” according to Zola, engaged couples are seeking cash for the home from their wedding guests.
A survey of 6,000 couples registered with Zola this year found that 87% were asked for cash, while 41% were particularly requested for down payments for their homes.
“Society is really moving in that direction and people generally feel very comfortable providing cash, especially when they know what it’s heading,” said Emily Forest, a spokesman for Zola.
If couples have a few things in mind when using gift funds to help pay for their homes, financial experts say it’s not a bad idea. What should you know about this:
Make sure you and your partner are on the same page
Janelle Sallenave, chief spending officer at financial services firm Chime, knows that a lack of financial transparency could end relationships. Before you get married and buy a home, you need to fully understand who each person is working with.
“If you’re engaged and planning the future together, getting on the same page is just as important as planning a wedding,” she said. “Financial integrity is not only useful, it’s essential.”
Sallenave recommends talking through income, debt, spending habits, retirement savings, and overall goals. She encouraged couples to agree whether they were merging bank accounts, working on debt, for example, to pay invoices.
“Setting clear roles and checking in with each other regularly helps both partners get involved, get involved on the same page and avoid any issues and confusion,” says Sallenave.
Financial experts agree that even if wedding guests help with a down payment, it’s worth the couple asking if they can afford the mortgage payments and costs associated with owning a home. Taking into account property taxes, homeowner insurance, repairs and bills, a 2024 Bankrate survey found that ownership of a typical detached home costs $18,118 a year, although not including mortgage payments.
Thoughtful about the way you ask
Sallenave said it’s not unreasonable to request cash from wedding guests, but the way couples ask is important.
Couples need to provide details about where the money goes, like the house they plan to buy and the neighborhood they want to move in, Forest and Salenabe said. Don’t ask for a specific amount and be sure to send a personalized thank you note, Sallenave added.
“It’s annoying, but if you approach it with caution and gratitude, you’ll find that people will usually help you contribute to taking the next big step,” Sallenave told USA Today.
Have the right documentation
Keeping your transactions organized is important, according to Rulon Washington, executive director of mortgage sustainability at Wells Fargo.
Various mortgages have their own rules regarding gift funding. Washington said traditional mortgages, or non-government-backed mortgages, usually expect gift funds to come from spouses or relatives, but they have not explicitly said they cannot come from friends.
“If you’re underwriting on a traditional mortgage, you probably need to provide more documents to get it right,” Washington said.
He said FHA, VA and USDA lenders are more tolerant about where the money comes from, but they want to ensure that the person who gives you cash is not a vested interest in the property like a real estate agent.
In any case, donor-signed gift letters can often be used to clear up the confusion. It usually includes a transaction date, the amount given, and a statement that you do not need to repay the money. Washington said it was possible to ask lenders for templates.
For a certain period of time, talented cash will usually be “seasoned funds” for 60-90 days. That means lenders are often convinced they don’t come from the loan, Washington said. That doesn’t necessarily mean they don’t want documentation. He added that anyone who wants to spend the money immediately after receiving it would likely need to provide additional documents.
Washington proposed opening a savings or checking account dedicated to down payments.
Know your mortgage lender
Washington said one of the best things is to connect with lenders early as they plan to use newly engaged people and gift funds for down payments.
“There’s a misconception that you shouldn’t talk to a bank until you’re ready. That’s not true,” he said. “Converse with your bank anytime, especially as soon as possible. They will help guide you and provide cheat sheets on how to save your down payment in essence.”
Reach Rachel Barber at rbarber@usatoday.com Follow her at x @rachelbarber_
