Gift Letter Template Modify Form

Gift Letter Template

A Gift Letter is a document used to declare that a monetary gift is being given, typically for the purpose of helping someone purchase a home. This form is essential for lenders to ensure that the funds are indeed a gift and not a loan, which can affect the borrower’s financial standing. If you’re ready to simplify your home buying process, fill out the Gift Letter form by clicking the button below.

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When navigating the world of real estate transactions, understanding the nuances of financing options is crucial, especially for first-time homebuyers. One important tool in this process is the Gift Letter form, which plays a significant role in clarifying the financial support provided by family members or friends. This document serves to confirm that the funds given are indeed a gift, rather than a loan, which can impact the buyer's ability to secure a mortgage. Typically, the form includes essential details such as the donor's name, the recipient's name, the amount of the gift, and a statement affirming that repayment is not expected. By clearly outlining these elements, the Gift Letter helps lenders assess the buyer's financial situation more accurately, ensuring a smoother approval process. Additionally, it can help prevent potential misunderstandings or complications that might arise during the home buying journey. Understanding how to properly fill out and utilize this form can empower buyers to make informed decisions and pave the way for a successful purchase.

Instructions on How to Fill Out Gift Letter

Completing the Gift Letter form is an important step in the process of documenting financial gifts. Once filled out correctly, the form can help clarify the nature of the funds being provided. Follow these steps to ensure accuracy and completeness.

  1. Begin by entering the date at the top of the form.
  2. Provide the name of the donor, including their relationship to the recipient.
  3. Fill in the recipient's name and address. Ensure this information is accurate.
  4. Specify the amount of the gift in the designated section.
  5. Indicate the purpose of the gift. This might include a home purchase, education, or other significant expenses.
  6. Both the donor and recipient should sign and date the form at the bottom.
  7. Make a copy of the completed form for your records before submitting it.

After completing the form, it is crucial to submit it along with any other required documentation. This will help ensure a smooth transaction and avoid potential issues later on.

Key takeaways

When filling out and using a Gift Letter form, it is important to understand its purpose and requirements. Here are some key takeaways:

  • Purpose of the Gift Letter: This document confirms that a gift of money has been given, typically for a down payment on a home.
  • Donor Information: The letter must include the donor's name, address, and contact information.
  • Recipient Information: Include the name and address of the recipient who is receiving the gift.
  • Gift Amount: Clearly state the amount of the gift being provided.
  • No Expectation of Repayment: The letter should specify that the gift does not need to be repaid.
  • Signature Requirement: The donor must sign the letter to validate the gift.
  • Use in Loan Applications: Lenders often require this letter as part of the mortgage application process.
  • Documentation: Keep a copy of the Gift Letter for your records and provide it to your lender as needed.

Understanding these key points can help ensure that the Gift Letter is filled out correctly and serves its intended purpose in financial transactions.

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Documents used along the form

When you are preparing to give or receive a gift, especially in the context of real estate or financial transactions, several documents may accompany the Gift Letter form. These documents help clarify the terms of the gift and provide necessary information to lenders or other parties involved. Below is a list of commonly used forms and documents.

  • Bank Statements: These show the donor's financial capacity to provide the gift. They confirm that the funds are available and legitimate.
  • Proof of Identity: A copy of the donor's identification, like a driver's license or passport, verifies who is giving the gift.
  • Gift Tax Return (Form 709): If the gift exceeds a certain amount, the donor may need to file this form with the IRS to report the gift for tax purposes.
  • Loan Application: If the recipient is using the gift for a home purchase, they will need to submit a loan application to the lender, detailing their financial situation.
  • Purchase Agreement: This document outlines the terms of the property sale, including the price and the parties involved, which may reference the gift.
  • Settlement Statement: Also known as a HUD-1, this document summarizes the financial details of the transaction, including any gifts that are part of the down payment.
  • Affidavit of Gift: This is a sworn statement that confirms the gift was made without expectation of repayment, further clarifying the nature of the transaction.
  • Financial Gift Agreement: This outlines the terms of the gift, including any conditions or expectations from the donor, ensuring both parties are clear on the arrangement.

Having these documents prepared can streamline the process and help ensure that everything goes smoothly. Always consult with a legal or financial advisor if you have specific questions about your situation.

Sample - 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)

Dos and Don'ts

When filling out a Gift Letter form, there are several important guidelines to follow. Here’s a list of things you should and shouldn't do:

  • Do: Clearly state the amount of the gift.
  • Do: Include the donor's name and contact information.
  • Do: Specify the relationship between the donor and the recipient.
  • Do: Sign and date the letter to validate it.
  • Don't: Leave any sections blank; fill in all required information.
  • Don't: Use vague language; be specific about the gift's purpose.
  • Don't: Forget to check for spelling and grammatical errors before submission.