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. 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 a 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 are unconditional and are not expected to be returned or repaid. If the letter is written by any other person then the gifter, the letter is considered invalid.
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.
This template contains a phrase typical for money gift letters, which states: “The funds provided are a bona fide gift and there is no obligation, expressed or implied, for the borrower/recipient to repay the gift in cash or other services of any kind either now or in the future.”
This is a simple one-page VA/FHA/Conventional Gift Letter. It contains a reference to the Section 1010 of Title 18 of the United States Code (Department of Housing and Urban Development Transactions), which is not quoted in full.
This is a one-page example of a mortgage gift letter. As with other letters of this kind, it notes that no repayment of this gift is expected or implied either in the form of cash or future services of the recipient.
A gift letter is written correspondence stating that money is sent to a friend or relative is a gift. Oftentimes a gift is made towards purchasing a new home or other real estate property. This is a simple version of a gift letter.