Terminology Tip: Gift Letter

This is a letter stating that the gift giver, typically an immediate family member, is making a gift of a specific amount to the gift receiver for purpose of a down payment on a home.

Check with your lender for their specific requirements, but typically the letter must state the amount of the gift, the subject property address, the relationship of the gifter to the giftee, and a note that the receiver is not required to pay back the gift at any time. Persons wishing to gift money should check with their accountant or financial adviser to verify any gift limits and tax implications of their financial contribution.