A gift letter in a mortgage context is a document provided by someone gifting funds to a borrower for a down payment, closing costs, or other expenses related to purchasing a home. The letter typically outlines the donor’s relationship to the borrower, confirms that the funds are indeed a gift and not a loan, specifies the amount of the gift, and may include other relevant details such as the source of the funds and the donor’s contact information. Gift letters are often required by lenders to ensure that the funds being used for the mortgage transaction are legitimate and do not create additional debt for the borrower. This helps lenders assess the borrower’s financial situation accurately and comply with mortgage underwriting guidelines.
Are you in the market for a new home but need help with your finances? If so, you may wonder about gift letters and how to complete them. A gift letter for mortgage loans are a written statement that ensures…
