What is a gift letter?
If someone is willing to make a gift of funds in order for you to purchase a home, lenders will ask for a gift letter stating that no repayment of the “gift” is expected. The amount of the gift and the date funds were transferred should be spelled out in the letter, along with the donor’s name, address, telephone number and relationship to the borrower. In addition to the letter, a lender can ask for two or three months’ worth of statements for the account where the down payment funds are located. If the money was recently placed into that account, the lender may ask where it came from and request verification of that source as well. Gifts — with the proper documentation — can be from relatives, friends, an employer, church, municipality, or nonprofit organization. Lenders often have stricter restrictions on gifts from friends and relatives other than parents. Also, if you put less than 20 percent down, some lenders may require that a portion of the down payment be your own cash, not
Related Questions
- How will gift acknowledgments be handled? Will it be the responsibility of the beneficiary station to generate an acknowledgment letter stating tax benefits/consequences?
- How can I tell if my gift card code contains the letter "O" or the number Zero (0)?
- Who will receive the gift letter and certificate?
