A down payment on a house is not the easiest of things to manage. While it is somewhat easy to make monthly payments, down payments are a different ballgame altogether. However, mortgage companies cannot deny you a mortgage plan if a family member or friend has decided to give you funds to put a down payment on a house. Since the deal is purely between you and your family member or friend, mortgage companies cannot influence this decision. However, if a mortgage company is receiving funds from an account different from the one owned by an applicant, they need some sort of proof that this is being done legally.
In such circumstances, mortgage companies require a mortgage gift letter from the person making the down payment. This letter will chart out that the down payment is being made as a personal agreement between the friend / family member and the applicant and that there is no repayment involved. In essence, a mortgage gift letter is a self-declaration that states that the money that has been put forward is a “gift” and that the person who is giving the gift holds no right to the property.
If you have found yourself to be in this situation, you can take ideas from the following mortgage gift letter example to write your own.
January 7, 2015
Mr. Julian Moore
3362 Forest Bend Road
Keller, TX 17292
Subject: Mortgage Gift for Purchase of 222 Bear Run Road, Keller, TX
Dear Mr. Moore:
I, Natalie Samuels confirm that I am gifting $5500 to Nathan Samuels (my son) who is the purchaser of 222 Bear Run Road, Keller, TX for the deposit for the said property. I also confirm that this deposit is a non-repayable gift and that I have no interest in the property and will not reside in it.
I confirm the availability of the funds in my account – my account statement is enclosed with this letter for your reference. I agree to provide you with any documentation or personal guarantee of subsequent mortgage payments to substantiate my son’s mortgage application. Please refer to the enclosed check amounting to $5900 which should cover both the mortgage down payment and the legal fees of approximately $400. If there are any additional processing requirements, please let me know and I will fulfil them on an immediate basis.
Note: My signature on this letter indicates that I endorse that all information in this letter is correct and that I am liable to provide proof of income or such as and when required by the lending company.