Gift funds are funds from an immediate family member or spouse to be used toward the down payment on your home.
It is important to note that if you’re stating the funds are a gift, that there are no repayment requirements from the gifter. If there are, the funds would be considered a loan, and its payment will be factored into your monthly expenses.
When do you need a gift letter?
Generally, you will need gift letters for deposits to your accounts that are greater than 50 percent of your monthly income.
The gifter will need to provide a gift letter along with documentation on the source of the funds.
Typical gift letters include the donors contact information, relationship to the applicant, dollar amount of the gift, date the funds were transferred, statement that there are no repayment expectations, gifter’s signature and address of property being purchased.
— Joe W. Hattendorf Jr., BECU Mortgage Advisor, 425-609-5419. Equal Housing Opportunity Lender. MLO# 517664