Free Gift Letter for a Mortgage Template

A gift letter for a mortgage confirms that money toward a home purchase is a gift, not a loan. The donor writes it, signs it, and hands it to the borrower to pass along to the lender.

Lenders care about the difference because a loan changes the math. A borrower who owes money back carries a debt, and that debt affects how much house they can afford. Therefore the letter answers one narrow question: does anyone expect repayment?

The letter does not move money on its own. Instead, it records the intent behind a transfer that happens separately by wire, check, or bank transfer. It also does not replace bank statements or transfer receipts, so keep those close by.

A gift letter differs from a promissory note as well. That kind of note sets out repayment terms, while this letter states the opposite. Borrowing wording from a loan document is a common mistake, so keep the language simple and direct.

You need a gift letter for a mortgage whenever someone else puts money toward your home purchase. Most lenders ask for one as soon as a deposit lands that your income and savings do not explain.

Common situations include:

• A parent covers part of the down payment on a first home.
• Grandparents contribute toward closing costs as a wedding or graduation gift.
• A sibling sends money so a family member can buy out an ex-partner.
• Another relative chips in to cover an appraisal gap after a competitive offer.

Timing matters as much as the letter. Send the funds early, then let them sit in the account while the lender reviews your file. That way the deposit is easy to trace, and the underwriter can match it to the letter without extra questions.

Lenders also look at how long the money has been sitting in the account. Check with your loan officer on whether your program expects the funds to season for a set period.

Every gift letter for a mortgage covers the same core facts. Keep each part short and specific, since underwriters read for detail rather than length.

Donor and Borrower Names

List full legal names for the person giving the money and the person receiving it. Also add a mailing address and phone number for the donor, because lenders often call to confirm.

The Gift Amount

Write the exact figure in numbers. Then note the date the money moved, plus the method, such as a wire or a cashier’s check.

The Relationship

Say plainly how the two people are connected — mother, stepfather, aunt, or longtime family friend. Loan programs can limit who counts as an acceptable donor, so this line matters more than it looks.

The Property Address

Name the home the money is going toward. If you have not gone under contract yet, ask your loan officer how they want that handled.

A No-Repayment Statement

This sentence is the heart of the letter. One clear line saying the money is a gift, and that no repayment is expected, does the job.

Signatures and Date

The donor signs and dates the letter. Some lenders also want the borrower’s signature, so leave room for both.

Start with the facts your lender needs, then keep the wording plain. A short, complete letter moves through underwriting faster than a long one.

1. Confirm the amount and the date the money will move.
2. Fill in donor and borrower names, addresses, and phone numbers.
3. State the relationship in everyday words.
4. Add the address of the property the funds will go toward.
5. Include one sentence saying no repayment is expected.
6. Have the donor sign and date the letter.

Some lenders ask the borrower to sign as well. Others want a bank statement from the donor showing the money was available. Because these requests vary, send a draft to your loan officer before anyone signs.

Plain language works better here than formal legal phrasing. Underwriters want the amount, the relationship, and the promise that nothing gets repaid. Anything past those points only slows the review down.

Notarization is not always part of the process, and expectations differ from one lender to the next. If yours asks for it, book the appointment while the letter is still unsigned. That way the donor signs in front of the notary instead of beforehand.

A gift letter for a mortgage is one piece of a larger loan file. Rules for gift funds come from your loan program and your lender. So the safest move is to ask your loan officer exactly what your file needs.

Questions worth raising early:

• Can gift funds cover the full down payment, or only part of it?
• Which donor relationships does this loan program accept?
• Should the money go into my account or straight to closing?
• Do you need a bank statement or transfer receipt from the donor?

Tax treatment sits outside what a lender reviews. Large gifts can create reporting duties for the donor. So ask an accountant or a tax professional before a big transfer.

Finally, keep every detail consistent. The amount in the letter should match the amount that lands in the account. Names should match too, exactly as they appear on the transfer. Small mismatches are the most common reason underwriters come back with questions.