If you are buying a home, it may be helpful for you to know that mortgage lenders allow financial gifts to be used towards a mortgage down payment. Gifts can be a valuable tool for people trying to finance their first home, and knowing how to correctly apply a mortgage gift to your down payment is important if you’re planning to receive a gift of down payment.

Why a Gift Letter is Important

When a lender is examining your credit score, they will want to check your income and your assets. Thus, they will want to make sure that any amount in your account is yours and not just a loan from family or friends. It is important that they are able to determine that you can pay the loan back. This is why a mortgage gift letter is important: to show the bank and the government that the money is being officially gifted by a 3rd party for the mortgage down payment.

Mortgage Gift Letter Template & Information

A mortgage gift letter should contain:

• The giver’s name, address, and contact number
• The giver’s relationship to the home buyer
• The amount of the gift
• The date on which funds were transferred
• A statement from the giver indicating they do not expect a repayment
• The giver’s signature
• The address for which the mortgage gift was given

Coming up with this letter is actually quite easy. You will find many mortgage gift letter template samples online. Alternatively, you can ask your lender to provide you with a mortgage gift letter template they would like to use. Below is a mortgage gift letter template you can use!


To: [address and name of the lender]

I am giving [name of the borrower], who is my [relationship] with a gift of [dollar amount of the gift] to be used for the purchase of the property. The property is located at [state the full address of the property].

I do not expect to receive payment for this gift in cash or in future in the form of a service. Thus, I do not intend to file any lien against the property at any future date. If you wish to contact me, use the information below.

[The giver’s signature]
[The giver’s name]
[The full address of the give and their telephone number]

This simple letter above should cover all the information that the lender requires from you. He or she will also need to verify that the amount is in your bank account using a simple bank statement. For more important first time home buyer information and education, download our eBook now!