A gift letter is a crucial document for borrowers using gift funds towards their down payment or closing costs when applying for a mortgage. Lenders require this letter to verify the source of the funds and ensure they aren’t a loan disguised as a gift. Properly documented gift funds can significantly improve your chances of mortgage approval, especially for first-time homebuyers. The letter needs to clearly state the relationship between the donor and the recipient, the amount of the gift, and a confirmation that repayment is not expected.
Crafting a compliant gift letter involves more than just a heartfelt message. It demands specific details to satisfy lender requirements. Neglecting these details can lead to delays or even denial of your mortgage application. Always consult with your lender for their specific requirements, as these may vary. The following sample letters provide a template, but customization is key to ensuring acceptance. Remember to include the donor’s contact information for verification purposes.
Several critical elements must be included in the gift letter. The letter should include the donor’s full name, address, and phone number. It also need the recipient’s full name, the property address for which the mortgage is being sought, the exact dollar amount of the gift, and a clear statement that the gift is not a loan and does not require repayment. Finally, the letter must be dated and signed by the donor. These elements help ensure the lender’s requirements are met and the gift can be properly verified.
Sample Gift Letters for Mortgage Approval
Here are 16 sample gift letters, each tailored for slightly different situations. Remember to replace the bracketed information with your specific details.
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Sample Letter 1: Standard Gift Letter from Parent
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., daughter] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 2: Gift Letter from Grandparent
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., granddaughter] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 3: Gift Letter from Sibling
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., brother] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 4: Gift Letter from Aunt/Uncle
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., nephew] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 5: Gift Letter with Source of Funds – Savings
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., daughter] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. These funds are from my personal savings account. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 6: Gift Letter with Source of Funds – Investment Account
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., daughter] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. These funds are from my investment account held at [Bank Name]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 7: Gift Letter with Specific Property Details
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., son] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address], specifically to be used for [Purpose: e.g., down payment]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 8: Gift Letter with Both Donor and Recipient Present Address
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., niece] [Recipient Name], currently residing at [Recipient Current Address], for the purchase of the property located at [Property Address]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 9: Gift Letter with Explicit No-Repayment Clause
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., daughter] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. This is an outright gift, and there is absolutely no expectation or agreement for repayment, either now or in the future.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 10: Gift Letter with Explanation of Relationship
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to [Recipient Name], residing at [Recipient Address], who is my [Relationship – e.g., long-time friend]. We have known each other for [Number] years. The gift is for the purchase of the property located at [Property Address]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 11: Gift Letter for Closing Costs
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., son] [Recipient Name], residing at [Recipient Address], for the purpose of covering closing costs associated with the purchase of the property located at [Property Address]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 12: Gift Letter with Bank Information (Optional – Check with Lender)
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., daughter] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. The funds will be transferred from my account at [Bank Name], account number [Account Number]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 13: Gift Letter for Down Payment and Closing Costs
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., brother] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. These funds are intended to be used for both the down payment and closing costs. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 14: Gift Letter with Statement of Financial Stability
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., cousin] [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. I confirm that this gift does not represent a financial hardship for me. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name] -
Sample Letter 15: Gift Letter from Several Donors (combined)
Date: [Date]
To: [Lender Name]
Address: [Lender Address]We, [Donor 1 Name], residing at [Donor 1 Address], [Donor 1 Phone Number], and [Donor 2 Name], residing at [Donor 2 Address], [Donor 2 Phone Number], are gifting a combined amount of $[Amount] to [Recipient Name], residing at [Recipient Address], for the purchase of the property located at [Property Address]. [Donor 1 Name] is gifting $[Amount 1] and [Donor 2 Name] is gifting $[Amount 2]. This is a gift and no repayment is expected.
Sincerely,
[Donor 1 Signature]
[Donor 1 Printed Name]
[Donor 2 Signature]
[Donor 2 Printed Name] -
Sample Letter 16: Gift Letter for Refinance (Rare, but Possible in Specific Cases)
Date: [Date]
To: [Lender Name]
Address: [Lender Address]I, [Donor Name], residing at [Donor Address], [Donor Phone Number], am gifting $[Amount] to my [Relationship – e.g., friend] [Recipient Name], residing at [Recipient Address], to assist with the refinance of the property located at [Property Address]. This gift will be used to [Specific Purpose – e.g., pay down principal]. This is a gift and no repayment is expected.
Sincerely,
[Donor Signature]
[Donor Printed Name]
Conclusion
Obtaining a gift for a mortgage can be a significant advantage. However, a well-drafted gift letter is essential. Remember to personalize these samples with accurate information and always consult your lender for their specific requirements to ensure a smooth and successful mortgage approval process. Properly documenting the gift and ensuring the lender’s satisfaction are critical for achieving your homeownership goals.
