Buying a home can be thrilling, but when it comes to saving enough money for a down payment, that thrill becomes complicated.
Many times, homebuyers turn to family and others to get enough cash upfront for a mortgage. In fact, 27 percent of homebuyers aged 22-29 and 20 percent of those aged 30-39 received gifts from relatives or friends to help with their down payment, according to the National Association of Realtors.
These down payment gifts, while common, must be documented accurately in what’s known as a gift letter in order to be applied to a mortgage.
What is a gift letter for a mortgage?
A gift letter is a document that helps satisfy a mortgage lender’s requirement that a borrower’s down payment funds are coming from legitimate sources, explains Jessi Bostic, broker/owner of Kismet Lending in Salt Lake City. The