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Gift Letter Template
What Is a Gift Letter?
A Gift Letter is a formal statement prepared by the person who gives somebody money or property, without expecting the recipient to pay them back or compensate them some other way. Often used to help future borrowers with their credits and mortgages, these documents are prepared by borrowers' family members and friends who provide them with funds used as a deposit, down payment, or a simple payment to purchase the property or make a loan payment.
Alternate Name:
- Gifting Letter.
It is necessary to confirm the source of the gift to show the recipient did not take out a personal loan or used their own savings - the lender needs to know the borrower will not have any additional liabilities that may have a negative effect on their ability to pay for the mortgage or manage credit card debts. Download a printable Gift Letter template through the link below.
How to Write a Gift Letter?
A Gift Letter must be completed by the donor - the individual who willingly provides their financial resources to help the gift recipient. Follow these steps to compose a simple Gift Letter:
- Greet the letter reader - if you know the name of the person who will review this document along with other files, write down their name and title. Otherwise, you may indicate the name of the financial organization that needs the information about the gift or write "To whom it may concern" - the latter option is preferable if the individual who received the gift submits the documentation to multiple institutions.
- Introduce yourself and describe your relationship with the gift recipient.
- Verify your intention to provide them with a certain amount of money they can later use to cover their expenses - usually, connected with the existing or future mortgage. Indicate the address of the property if the recipient knows which house or apartment they will pay for with your money.
- Describe the gift - you may simply state the sum of money you are giving to the recipient. Specify the source of the gift - it may be your investments or savings.
- Confirm you are not expecting any repayment or another form of compensation for your gift. If the individual that receives the gift requires this document for their loan or mortgage, certify you understand the monetary funds in question will be used to help them with their financial obligations. You must also promise you will not file any liens against the property.
- Sign and date the letter. Add your name and contact information to allow any letter reader to reach out to you in case any questions or concerns arise in the future.
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