When you give someone a gift, it’s important to write a gift letter to go along with it. This will explain the gift and why you are giving it. It will also help to ensure that the recipient understands your intentions.
When you are ready to purchase a home, you will need to have a few things in order. One of the items on your list should be a gift letter. A gift letter is simply a document that states that the money being used as part or all of your down payment is a gift from someone, not a loan.
This is important because lenders need to know that you are not borrowing the money for your down payment and that it is truly a gift.
So how do you write a gift letter? The most important thing to include in your gift letter is the donor’s name, address, phone number, and relationship to you.
You will also need to state the amount of money being given and what it is specifically for (down payment on home). It is also helpful if the donor writes out and signs the check in front of a witness so that there is no question about where the funds came from.
Once you have all of this information, simply put it into writing and have both yourself and the donor sign and date the letter.
That’s it! Now you have everything you need to show your lender that your down payment funds are indeed coming as a gift from someone close to you.
Gift Letter for Mortgage Template Pdf
When you’re applying for a mortgage, any gifts that you receive from family or friends will need to be documented. Your lender will require a Gift Letter for Mortgage to verify that the funds are not a loan and do not need to be repaid. This template can be used to provide this information to your lender.
The template includes fields for the donor’s name, address, phone number, relationship to borrower, and amount of gift. There is also space for the donor to sign and date the letter. This template is free to download and use.
Credit: homebuyer.com
Can a Gift Letter Be Handwritten?
A gift letter is a document that states that a certain amount of money has been given to you as a gift. This letter is typically used when applying for a mortgage, as proof that the funds are not coming from a loan. A gift letter can be handwritten, but it must be signed by the person giving the gift and include their name, address, phone number, and relationship to you.
The letter should also state the amount of money being given and what it is for (i.e. down payment on a home).
How Do You Document a Gift?
When you receive a gift, you may want to document it for tax purposes. Here’s how to do it:
1. Get a receipt from the person who gave you the gift.
This should include their name, address and phone number, as well as the date and amount of the gift.
2. Make a copy of the receipt and keep it with your other tax records.
3. If the value of the gift is over $14,000, you will need to file a Gift Tax return (Form 709) with the IRS.
Is a Gift Letter a Legal Document?
A gift letter is not a legal document. It is, however, a way to show your lender that the money you’re using to buy a home is a gift from someone else and not a loan.
The letter should include:
The name, address and phone number of the person giving you the money
The amount of money they are giving you
Do Gift Letters Need to Be Notarized?
The quick answer is no, gift letters do not need to be notarized. However, the lender may require that the letter be signed by a Notary Public.
If you are gifting money to someone so they can use it towards the purchase of a home, you will likely need to write a gift letter.
A gift letter is simply a document that states that the money is a gift and not a loan. This is important because loans must be repaid, but gifts do not have to be repaid.
Lenders usually require that gifted funds come from immediate family members, such as parents, grandparents, siblings or children.
The definition of immediate family can vary by lender, so it’s best to check with your lender ahead of time to see who they consider to be immediate family.
When writing a gift letter, be sure to include:
-The amount of money being gifted
-The date the funds were transferred
-A statement saying that the funds are not expected to be repaid
-Your relationship to the borrower
If you have any questions about gifting money or writing a gift letter, consult with an experienced real estate agent or loan officer.
Gift Letter
Conclusion
A gift letter is a document that verifies that money or property given to you is a gift and not a loan. This can be important when you are applying for a mortgage, as lenders will want to know that any large deposits are not borrowed funds that you will have to repay.
If you are receiving a gift of money from family or friends, they will need to write and sign a gift letter stating the amount of the gift, who the giver is, their relationship to you, and that there is no expectation of repayment.
The letter should also include the giver’s contact information in case the lender has any questions.
Once you have the completed and signed gift letter, you can then move forward with your mortgage application.