A Gift Letter provides documentation to a mortgage lender specifying gift money or gift funds that will be used towards a down payment for a mortgage loan.
The proper documentation of gift funds is critical to your loan transaction, whether you are getting a FHA loan or other loan. The mortgage industry places a great deal of emphasis on establishing a formal paper trail of the gift (otherwise known as source of funds) so it is very important that you review and understand the requirements presented below. Furthermore, gift funds must be received from a relative, not a friend or acquaintance.
Please note that the required documentation will differ depending on whether you have already received the gift or will receive the gift at a future date prior to settlement.
Please note that the gift letter and supporting documentation detailed above should be received in our office no later than three weeks prior to settlement. Additionally, when making your gift deposit, be sure to keep the gift deposit separate from any other money you may be depositing that same day. This will help to keep the paper trail separate and clean.
Be sure to call your processor or your loan officer if you have any questions.