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. 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.A mortgage gift letter is a document that helps satisfy the requirement that a borrower's down payment funds come from legitimate sources. A gift letter for a mortgage shows your lender that you don't need to repay gift money toward your down payment. A mortgage gift letter is a document that verifies that the gift money you receive is, in fact, a gift that you do not have to repay. A gift letter is a letter stating that money you receive from a friend or family member is in fact a gift, not a loan. You can use gift money for your down payment on your home, so long as you meet your lender's requirements for sourcing and documentation. "Every once in a while, that rears up and we have to say, uhoh, you're not actually allowed to accept a gift from just a friend. The property owner signs the note, which is a written promise to repay the borrowed money. The letter should state that the person giving you the money is not getting something of value in return, such as an ownership stake in the property.
