A Gift Letter is a document signed by the party that gives money to another party to certify that the received money is a gift and specify the area of investment, which is oftentimes a real estate acquisition.
Using a pre-made Gift Letter template will increase the likelihood that the bank will accept the letter. The templates available down below already contain the necessary confirmations and clauses and only require the personal data and signatures of the participants to be complete.
Gifting Letters are necessary when a friend or a relative assists you in making a down payment. A bank requires this information to ensure that the money was not borrowed from another source. Providing proof is necessary because a bank may calculate more debt or disqualify you from your current loan or any future borrowings.
Gifts requiring additional certification may include cash, checks, property to secure the loan, or forgiving debt. A Gift Letter should contain the name and contact information of the gifter, specify the relationship between the parties, give a description of the gift, and state when the gift was made. The gifter and the receiver should sign the letter before sending it to the bank. The letter must confirm that the received money or property is unconditional and is not expected to be returned or repaid. If the letter is written by any other person than the gifter, the letter is considered invalid.
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