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Brooklyn couple, Eliza Palasz and Patrick Rooney, are planning a destination wedding in Canada this June. To simplify gift-giving, they've opted for an unconventional approach: asking friends and family to contribute to their home down payment instead of traditional gifts.
"We're not expecting everyone to feel drawn to contributing to our honeymoon," says Palasz. "A future home feels like a thoughtful, lasting investment that friends and family can be part of – no matter the size of their contribution."
This approach is becoming increasingly popular: 48% of newlywed homeowners asked for money toward their down payments instead of traditional gifts, according to a recent LendingTree survey. A Realtor.com survey found that 30% of wedding attendees are open to giving financial gifts toward homebuying expenses.
Palasz and Rooney plan to use the gifted funds towards a future home, but not immediately. "We don't expect to receive enough for a full down payment right after the wedding – but whatever we do receive will be set aside for that purpose," says Palasz.
To manage the gifted monies, Rooney has a one-to-three year plan and a three-plus-year plan, considering high-yield savings accounts or bonds. "It has to be money we could access quickly should an opportunity strike."
Rulon Washington, executive director of mortgage sustainability and business education for Wells Fargo, advises couples to create a plan in preparation for buying a home. This includes getting pre-approved for a mortgage and creating a separate account for gift funds.
Couples need to understand that down payment gifts come with rules depending on the amount received. "Smaller increments of money are less of a hassle – but larger amounts require more documentation," says Washington.
Palasz and Rooney hope to start with an apartment purchase in Brooklyn, eventually building a home together. They realize that real estate is expensive, but starting to save down payment funds feels like a true investment in their collective wealth.
