A gift letter is a written and legal document that contains a statement telling that the money received from a relative or friend is a gift. This document is used when a borrower received assistance in making a down payment for their new personal property or real estate. A gift letter is proof that money is given as a “gift” and not a loan. It includes exchange, sale, or any other form of transfer of property from one person to another.
A gift letter is a written and legal document that contains a statement telling that the money received from a relative or friend is a gift. This document is used when a borrower received assistance in making a down payment for their new personal property or real estate. A gift letter is proof that money is given as a “gift” and not a loan. It includes exchange, sale, or any other form of transfer of property from one person to another.
FREE 10+ Mortgage Gift Letter Samples
1. Mortgage Gift of Equity Letter
2. Printable Mortgage Gift Letter
3. Mortgage Gift Letter Example
4. Mortgage Company Gift Letter
5. Formal Mortgage Gift Letter
6. Sample Mortgage Gift Letter
7. Mortgage Gift Letter in PDF
8. Standard Mortgage Gift Letter
9. Savings Mortgage Gift Letter
10. Direct Mortgage Loans Gift Letter
11. Mortgage Gift Letter Format
What is a Mortgage Gift Letter?
A mortgage gift letter is a formal letter from an individual or donor that certifies that the down payment gift money they had provided to a receiver comes with no payment expectations. This gift letter from relatives or friends is a usual way to assist them in covering their home-buying expenses such as closing costs, down payment, and other payment terms. It also assures the lender that an individual does not owe their friends or families for their gift funds.
How to Create a Mortgage Gift Letter?
When an individual wants to apply for a mortgage, lenders want to make sure that their financial budget information is accurate and reliable to ensure that they have the funds to make their down payment and they have the income to pay their monthly payments. With a mortgage gift letter, lenders can ensure that the funds from a borrower came from a reliable source and not somewhere illegal. This letter is a legal document that is usually used by a borrower’s friend or relative to assist them in making a down payment for their new home or property with no expectation of repayment.
Step 1: Provide the Giftor’s Basic Information
When creating a mortgage gift letter, it must provide information about the gifter or donor such as their name, address, and contact information. It also contains a statement that tells the donor’s relationship to the borrower or loan applicant as well as the date when the funds will be transferred.
Step 2: Include the Amount they are Transferring
The gift letter should also provide the exact amount that will be transferred to the recipient. This can be an estimated value for non-cash transactions which is often verified with supporting or backup documents.
Step 3: State the Address of the Property
After stating the funds to be transferred, provide the address of the house or real estate property to be purchased by the borrower. It should also include the dated signature of the donor and borrower.
Step 4: Add a Statement that Tells that it is a Gift and not a Loan
A mortgage gift letter is given to the borrower as a gift. Therefore, this document must include a statement that the amount given is not a loan and that repayment is not expected to be paid back by the borrower to the donor, proving that the funds were not given with an interest in the transaction.
FAQs
Why do gift letters matter to mortgage lenders?
Gift letters matter to mortgage lenders because it enables them to document that the individual gifting a borrower the money is not involved in the home purchase transaction, write that the money is not a loan, and inform the IRS about the gift funds for tax purposes or documentation.
What information must a gift letter include?
A gift letter must include the exact amount of the gift, the gifter’s signed statement that they are not expecting repayment, the address of the property to be purchased, the donor’s account information, the date of the cash transfer, the relationship between the donor and borrower, the donor’s personal information, and the dated signature of the borrower and donor.
Is a gift letter a legally binding document?
Yes, it is. The gift letter contains information that can be used by many parties and in which the donor and borrower are expected to follow the stated terms and conditions.
A mortgage gift letter is a formal and legal document signed by a donor to certify that the gift money they had given for a recipient’s down payment comes with no expectations of being paid back. It is usually given by friends or family to help an individual cover their home-buying transactions and as a way to ensure lenders that the money they are being paid with is indeed a gift and not a loan.
Related Posts
Sample College Letter Of Intent
Sample Invitation Letters for Visa
Sample Teaching Position Recommendation Letter Templates
Sample Visa Invitation Letter Templates
How to Write an Application Letter for Employment [ With Samples ]
Sample Community Service Letter Templates
Sample Commitment Letter Templates
Sample Application Letter Templates
Letterhead Samples
Sample Visa Sponsorship Letter Templates
Application Letter Templates
Sample Job Application Cover Letter Templates
Formal Excuse Letter Templates
Leave Letter Templates
Sick Leave Letter Templates