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Official Gift Letter Form in PDF

The Gift Letter form is a document used to declare that a monetary gift is being given to a borrower, typically in the context of securing a mortgage. This form helps clarify that the funds are not a loan, ensuring transparency in the financial process. Proper completion of the Gift Letter form can facilitate smoother transactions and prevent potential misunderstandings between parties involved.

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When it comes to significant financial transactions, especially in real estate, clarity and transparency are essential. One important document that plays a crucial role in these transactions is the Gift Letter form. This form is typically used when someone receives a monetary gift, often from a family member or close friend, to assist with a down payment on a home. The Gift Letter serves several purposes: it verifies that the funds are indeed a gift and not a loan, outlines the relationship between the giver and the recipient, and confirms that the giver has no expectation of repayment. By providing this information, the Gift Letter helps lenders assess the borrower’s financial situation more accurately, ensuring that all parties are on the same page. Understanding how to properly fill out and utilize this form can make a significant difference in the home-buying process, paving the way for a smoother transaction and peace of mind for everyone involved.

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Steps to Using Gift Letter

Completing the Gift Letter form is an important step in documenting financial gifts for various purposes, such as securing a mortgage. Once you have filled out the form correctly, you can submit it to the relevant parties involved in your transaction.

Begin by entering the date at the top of the form.
Fill in your name as the donor, including your address and contact information.
Provide the recipient's name, along with their address and relationship to you.
Clearly state the amount of the gift being provided.
Include a brief description of the purpose of the gift, if necessary.
Sign and date the form to confirm that the information is accurate and truthful.
If required, have the recipient sign the form to acknowledge receipt of the gift.
Make copies of the completed form for your records before submitting it.

Key takeaways

When preparing to fill out and use a Gift Letter form, there are several important points to keep in mind. Below are key takeaways that can help ensure the process goes smoothly.

Understand the Purpose: A Gift Letter is used to document a financial gift, often for purposes like a home purchase. It clarifies that the funds are a gift and not a loan.
Identify the Giver and Receiver: Clearly state who is giving the gift and who is receiving it. This information is crucial for legal and financial records.
Include Gift Amount: Specify the exact amount of money being gifted. This detail is essential for both parties and any financial institutions involved.
State the Relationship: Describe the relationship between the giver and receiver. Lenders often require this information to assess the legitimacy of the gift.
Provide a Signature: The giver must sign the letter to confirm that the information is accurate and that they willingly provided the gift.
Consider Additional Documentation: Sometimes, lenders may request bank statements or other proof of funds to accompany the Gift Letter.
Be Honest: It’s important to be truthful in the Gift Letter. Misrepresentation can lead to serious consequences in financial transactions.
Consult with Professionals: If uncertain about any part of the process, seek advice from a financial advisor or real estate professional to ensure compliance.

By keeping these takeaways in mind, you can navigate the Gift Letter process with greater confidence and clarity.

Misconceptions

When it comes to the Gift Letter form, there are several misconceptions that can lead to confusion. Understanding the truth behind these myths can help ensure a smoother process. Here are nine common misconceptions:

Gift letters are only for first-time homebuyers. Many believe that only first-time buyers need gift letters. In reality, anyone receiving a monetary gift for a home purchase may need one, regardless of their buying history.
Gift letters are not legally binding. Some think that gift letters carry no legal weight. While they are not formal contracts, they do provide a written record of the gift, which can be important for lenders.
Only family members can provide gifts. It’s a common belief that only relatives can give gifts for home purchases. However, friends and other individuals can also provide financial assistance, as long as it is clearly documented.
A gift letter is the same as a loan. Many confuse gift letters with loans. A gift is a non-repayable amount, while a loan must be paid back. This distinction is crucial for lenders.
You don’t need to disclose the source of the gift. Some assume that they can keep the source of the gift secret. However, lenders often require this information to ensure compliance with their guidelines.
Gift letters are only required for large sums of money. There is a misconception that only large gifts need documentation. In truth, any monetary gift, regardless of size, may require a gift letter.
Gift letters can be handwritten. While it’s tempting to write a quick note, lenders typically prefer a formal letter that includes specific information. This helps ensure all necessary details are included.
Once submitted, the gift letter cannot be changed. Some believe that gift letters are set in stone. However, if circumstances change, it’s possible to amend the letter with the lender's approval.
All lenders have the same requirements for gift letters. It’s a common misconception that all lenders follow the same guidelines. In fact, requirements can vary significantly, so it’s essential to check with the specific lender.

By addressing these misconceptions, you can better navigate the process of using a Gift Letter form and ensure compliance with lender requirements.

Preview - Gift Letter Form

GIFT LETTER

Applicant(s):

Loan Number:

I,				, do hereby certify the following:
	(Donor)
(1) I have made a gift of $			to
		(Amount)			(Recipient)
	Whose relationship is:
		(Relationship)

(2) This gift is to be applied toward the purchase of the property located at:

(Property Address)

(3)No repayment of the gift is expected or implied in the form of cash or by future services of the recipient.

(4)The funds given to the homebuyer were not made available to the donor from any person or entity with an interest in the sale of the property including the seller, real estate agent or broker, builder, loan officer, or any entity associated with them.

(5)The source of this gift is:

(Source)

Donor Signature		Date	Borrower Signature

Donor Name (Print or Type)			Borrower Signature

Donor Address
(	)

Donor Phone Number

WARNING: Our signatures above indicate that we fully understand that it is a Federal Crime punishable by fine, imprisonment, or both to knowingly make any false statement concerning any of the above facts as applicable under the provision of Title 18, United States Code, Section 1012 and 1014.

Attachments:

1.Evidence of Donor's Ability to Provide Funds.

2.Evidence of Receipt of Transfer of Funds.

Calyx Form - giftlttr.frm (05/02)

Document Specs

Fact Name	Description
Purpose	A Gift Letter form is used to document a financial gift, often for home purchases or loans.
Donor Information	The form typically requires the donor's name, address, and relationship to the recipient.
Recipient Information	Details about the recipient, including their name and address, must also be included.
Gift Amount	The specific amount of money being gifted is clearly stated in the form.
No Repayment	The form confirms that the gift does not need to be repaid, distinguishing it from a loan.
Signature Requirement	Both the donor and recipient usually need to sign the form to validate the transaction.
State Variations	Some states may have specific requirements for Gift Letters, influenced by local laws.
Tax Implications	Gifts above a certain amount may have tax implications, which the donor should consider.
Usage in Mortgages	Lenders often require a Gift Letter as part of the mortgage application process.
Record Keeping	It is advisable for both parties to keep a copy of the Gift Letter for their records.