Video: What is a Mortgage Gift Letter?
Monday Nov 30th, 2020
What is a Mortgage Gift Letter?
Saving enough money to use as a down payment to purchase a home is no easy task, especially if you are buying for the first time.
Most lenders allow gifted funds to be used as down payments but there are some restrictions.
Typically, down payment gifts can only come from a relative and the property being purchased must be the primary residence for the buyers.
Lenders also typically require that the donor and the recipient both sign a mortgage gift letter.
In addition, many lenders require a paper trail of funds from the donor to the recipient including copies of the donor’s bank statements that include the gift amount.
If you receive a gift, you are not required to report it as income but the gift giver is responsible for paying any tax and filing a gift tax return.