The letter must explain who is gifting the money, where the donor's funds are coming from and the relationship between the donor and the recipient. The purpose of this letter is to document that the money does not need to be repaid as well as the donor's name, contract information, and relationship to you.A gift letter for a mortgage is proof to the lender that money you've been given for your home purchase is a gift, not a loan to be repaid. What should you include in a gift letter? To use gift funds, you must provide a gift letter proving the money is not a loan. If you use gifted funds toward your home purchase, your mortgage lender will need a gift letter to explain that the money is not a loan. The owner can choose to sell or mortgage the property without the permission of the beneficiary. Can I file a Transfer on Death Deed even if I have not paid off the mortgage? Does a Transfer on Death Deed shield the property from creditors? Gifts may require the payment of a gift tax.