You’re looking to purchase a property and your parents have graciously offered to help you with the down payment. Here’s what you need to know about the process.

The Gift letter is good for 90 days. This is because Banks and Lenders require a 90-day history of the applicant’s bank statements to verify their down payment. That to be said, most gifted funds are given closer to the completion date of the purchase and therefore fall within the 90-day window, and therefore this is rarely an issue. Just note that most lenders want to see the gifted funds in the buyer’s account at least two weeks prior to the closing date. If it’s later, or the Giftor wants to give the funds directly to the Solicitor, then we’ll need to ask for an exception from the Bank or Lender.

The Gift letter will state that the funds given/received do not need to be repaid. This is because if it’s considered a loan, then it would affect the applicant’s outstanding debt which can change their mortgage approval amount.

Gifted funds must come from an immediate family member. For example parents, siblings or grandparents. Friends do NOT count.

As long as the gifted funds are in the applicant’s account the person gifting the money’s banking history normally does not need to be provided. If the money is NOT yet in the applicant’s account, then a bank statement from the Giftor’s account from which the money will be coming will be required.

The Gift letter is a pre-written template specific to whichever Bank or Lender you’ve chosen to request your Mortgage through. Therefore you do not need to write your own or look for a template online. The Bank or Lenders template is on company letterhead and highlights the Giftor and giftee’s information, the gifted amount, and the date the gift was transferred into the applicant’s account.

If you have any further questions about the Gift Letter, reach out as we’d love to help.