5 Gift Letters for Mortgage Templates
Gift Letter Template Ideas
If you've ever purchased a primary or secondary home using gift funds from another person, you’re familiar with gift letters for mortgages. These short documents are critical for completing the purchase process and getting into your new home.
How you format the gift letter for a mortgage is up to you. As long as you include all of the necessary items in the document, your bank should accept any letter you write. Some lenders may have a template for you to use. If not, use any of the templates listed below.
WHAT IS A GIFT LETTER FOR MORTGAGES?
Banks are very careful to confirm that mortgagees have the necessary income to cover their monthly payments. The last thing they want to do is make a loan that ends in default.
When you're using your own funds, your bank can be certain of where the money is coming from. If you’re receiving funds from an outside source to help with your down payment, you need to disclose how much you’re receiving, who gave you the money, and how they’re related to you. This might seem an odd request, but your mortgage company has good reasons for asking.
Gift letters reassure your bank that the money you’re receiving is a gift, not a loan. Loans aren’t allowed to be used for a down payment because they add to your debt load. Gift money does not. Your bank is trying to make sure you can pay your mortgage, and adding an additional debt makes that less likely. Use a mortgage gift letter to add a legal paper trail that ensures any funds you receive are free and clear of encumbrances. It also helps speed things for your real estate agent.
Gift letters are required whether you're buying a home to live in or an investment property. They deal with the mortgage loan whether you're financing with FHA loans, USDA and VA loans, but only if some portion of the funding comes from down payment gifts from family members or friends.
SEE ALSO: How to Generate Better Mortgage Leads
GIFT LETTERS FOR MORTGAGE TEMPLATES
The following templates include all the necessary verbiage for a gift letter and should satisfy most lenders. That said, some have stricter requirements than others, and certain types of loans, like conventional loans owned by Fannie Mae and Freddie Mac, restrict the relationships allowed to give a gift. VA loans may also require special care. Talk to your lender for specifics. Choose the mortgage gift letter template best suited to your situation.
Standard Gift Letter Template
Lenders with lenient gifting policies don’t need a complicated gift letter. This simple template should supply them with all the information they need.
——
I, [donor’s name], hereby certify that on [date of gift] I gave a gift of [gift dollar amount] to my [relation to borrower] [borrower’s name] for the purchase of the property located at [address of the home to be purchased]. This is a gift and not a loan. No repayment is required or expected, nor would it be accepted.
[Donor’s signature] [Date]
[Donor’s address]
[Donor’s telephone number]
Simplified Gift Letter Template
Your letter doesn't need a lot of structure and doesn't even need to read like a letter. Your lender will be happy as long as all the information they need is present. As long as payment gifts are recognized for what they are.
——
Gift Letter
A gift was made on [date of gift] concerning the purchase of the property listed below. This is a bonafide gift with no obligation, either expressed or implied. The funds concerned aren’t being made available by any person or entity with an interest in the sale of the property.
Donor: [donor’s name]
Donor’s address: [donor’s address]
Donor’s relationship to borrower: [relationship]
Borrower: [borrower’s name]
Borrower’s address: [borrower’s address]
Amount of the gift: [gift amount]
Property being purchased with gifted funds: [property address]
[Donor’s signature] [Date]
[Donor’s address]
Donor’s telephone number]
Gift Letter for Mortgage With Additional Details
As mentioned, some lenders may need more information to process the loan. This template adds additional details. This is for a down payment gift or any other kind of help (don't worry about a gift tax because there isn't one.)
——
I, [donor’s name], hereby certify that on [date of gift], I gave [borrower’s name] who is my [relationship to borrower] a gift in the amount of [gift amount] for use purchasing property located at [property address].
The funds are being held by [name of banking institution] and were gifted from [name of donor’s depository] at [address of depository], account number [account number]. Attached to this document, you’ll find institutional verification for where the funds came from and where they were deposited.
The funds were provided free of any repayment obligations, neither expressed nor implied. This is not a loan but a gift.
[Donor’s signature] [Date]
[Donor’s address]
[Donor’s email address]
Alternative Gift Letter #1
You’re free to structure your gift letter for mortgage transactions however you like. Here’s another way you might organize things.
——
Dear loan officer,
This letter is intended to let you know that I’m gifting [gift amount] to [borrower’s name], my [relationshop to borrower], for the purchase of her new home, located at [property address].
I don’t expect repayment in any form, whether financial or in services. This is a gift given free of all obligations. I’m happy to provide any other documentation you may need to prove the authenticity of this transaction.
Signed:
[Donor’s signature] [Date]
[Donor’s address]
[Donor’s email address]
Alternative Gift Letter #2
Here’s a second, loose letter structure. Remember, what really matters is the content, not the format.
——
[Date]
[Lending institution’s name]
[Lending institution’s address]
I/we [name of donor(s)] intend to make an obligation-free gift of [gift amount] to [name of borrower], my/our [relationship to borrower]. The address of the property being purchased is [property address].
There is no repayment expected or implied with this gift, either cash or future services. Any other verification documentation needed is available upon request.
Signed this day, [date]
[Donor’s signature]
[Donor’s address]
[Donor’s email address]
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DON’T FORGET THE HOUSEWARMING CARDS!
Once you’ve wrapped up the mortgage process, moved your stuff, and started settling into your new home, consider sending out housewarming cards. Your friends and loved ones will want to know your new address and dear details about the journey.
Instead of an email, consider sending a handwritten card. They’re more personal, relatable, and better express new house emotions. Just don’t handwrite them yourself. Who has time for that? Instead, enlist Simply Noted’s fleet of handwriting machines to get premium quality, pen-written cards personalized to each recipient in no time at all.
You can even create a custom design. Take a photo of your new home and place it on the front of the card. Our custom card creation tool makes it easy to use whatever assets you like to create the perfect housewarming card!
