Process
Gift Letter
A signed statement confirming that money received from a family member or other approved source for your down payment is a gift and not a loan that must be repaid. Lenders require gift letters because borrowed down payment money would increase your debt and affect your ability to repay the mortgage. The letter must include the donor's name, relationship to you, the gift amount, and a statement that no repayment is expected.
Why It Matters
Gift Letter is one of the steps you will encounter on the path from house hunting to holding the keys. Knowing what to expect at each stage reduces stress and helps you make better decisions under time pressure.
Stay organized and communicate proactively with your real estate agent, lender, and other professionals involved in gift letter. Delays and misunderstandings at any step can push back your closing date or cost you money.