What is Sample Gift Letter For Mortgage?
A Sample Gift Letter For Mortgage is a formal document used when a homebuyer receives a financial gift (often from family) to cover part of a down payment or closing costs. Lenders require this letter to confirm the funds are a gift (not a loan) and to comply with mortgage regulations. It protects both parties by clarifying the terms of the gift.
Why is it Important to Use Sample Gift Letter For Mortgage
Using a properly structured gift letter ensures transparency and legal compliance during the mortgage process. Here’s why it matters:
- Lender Requirements: Most lenders mandate a gift letter to verify the source of funds.
- Tax Compliance: Helps avoid misclassification of gifts as taxable income.
- Legal Protection: Prevents disputes by documenting the donor’s intent.
- Faster Approval: Streamlines underwriting by providing clear documentation.
General Structure of Sample Gift Letter For Mortgage
A standard gift letter includes the following elements:
- Place and Date: Location and date of writing.
- Recipient Details: Lender’s or borrower’s name and address.
- Main Content: Gift amount, purpose, and confirmation of no repayment expected.
- Closing: Donor’s contact information.
- Signature: Signed by the donor and sometimes the recipient.
Best Sample Gift Letter For Mortgage Example
Example 1: Standard Gift Letter for Down Payment
Date: June 15, 2025
To: ABC Mortgage Company
123 Lender Avenue
New York, NY 10001
Subject: Gift Letter for Mortgage Down Payment
Dear Sir/Madam,
I, John Smith, residing at 456 Oak Street, Chicago, IL 60601, am writing to confirm that I am gifting my son, Michael Smith, the sum of $50,000 (Fifty Thousand Dollars) to assist with the down payment for his home purchase at 789 Maple Drive, Chicago, IL.
This gift is given freely and without any expectation of repayment. It is not a loan, and I relinquish all claims to these funds. I understand this letter may be shared with relevant parties to process the mortgage application.
Sincerely,
John Smith
(Signature)
Phone: (555) 123-4567
Example 2: Gift Letter with Multiple Donors
Date: July 1, 2025
To: XYZ Bank Mortgage Department
789 Finance Blvd
Los Angeles, CA 90001
We, Robert and Emily Johnson (parents of the borrower, David Johnson), jointly gift the amount of $75,000 (Seventy-Five Thousand Dollars) to support the purchase of his new home at 321 Pine Lane, San Diego, CA.
This gift is unconditional and requires no repayment. We affirm that these funds are from our personal savings and are not borrowed.
Best regards,
Robert Johnson | Emily Johnson
(Signatures)
Contact: (555) 987-6543
Example 3: Gift Letter for Closing Costs
Date: August 10, 2025
To: DEF Lending Services
456 Credit Road
Houston, TX 77002
I, Sarah Williams, hereby declare a gift of $15,000 (Fifteen Thousand Dollars) to my daughter, Lisa Williams, to cover closing costs for her mortgage at 1010 Elm Street, Austin, TX.
This gift is irrevocable and does not create a debtor-creditor relationship. I attest that no repayment is expected, now or in the future.
Respectfully,
Sarah Williams
(Signature)
Email: [email protected]
Example 4: Gift Letter with Relationship Affidavit
Date: September 5, 2025
To: Sunshine Mortgage Group
321 Home Loan Plaza
Miami, FL 33101
I, Carlos Mendez, uncle of the borrower Ana Mendez, gift $30,000 (Thirty Thousand Dollars) toward her home purchase at 555 Coral Way, Miami, FL. Our familial relationship is confirmed via attached birth certificates.
This gift is non-refundable and complies with all mortgage guidelines. I certify that these funds are legally obtained and tax-compliant.
Regards,
Carlos Mendez
(Signature)
Phone: (555) 456-7890
Example 5: Concise Gift Letter for Refinancing
Date: October 20, 2025
To: Premier Mortgage Co.
888 Refinance Lane
Seattle, WA 98101
This letter confirms my gift of $25,000 to James Lee (my brother) to reduce the principal on his mortgage refinance for 222 Birch Road, Seattle, WA. No repayment is required.
Sincerely,
Thomas Lee
(Signature)
Address: 333 Spruce Ave, Seattle, WA 98102
FAQ about Sample Gift Letter For Mortgage
What is Sample Gift Letter For Mortgage?
A legal document proving that funds provided for a mortgage are a gift (not a loan), ensuring compliance with lender and tax requirements.
When is Sample Gift Letter For Mortgage used?
Commonly required for down payments, closing costs, or refinancing when part of the funds come from a family member or friend.
Common Mistakes in Creating Sample Gift Letter For Mortgage
- Omitting donor/recipient details or loan information.
- Failing to state “no repayment expected” clearly.
- Not including signatures or contact information.
Conclusion and Recommendations
A Sample Gift Letter For Mortgage is a critical document that should be crafted carefully to meet legal and lender standards. Use the examples above as templates, ensuring all personal and financial details are accurate.
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