Comments on: How to Write a Mortgage Gift Letter http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/ personal finance tips, tricks, and commentary Sun, 22 Nov 2009 03:39:46 -0500 http://wordpress.org/?v=abc hourly 1 By: Richard McCullough http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-132399 Richard McCullough Sat, 13 Jun 2009 19:36:59 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-132399 What if a family member gives a cash gift to his daughter and her husband every year and you want the mortgage company to recognize this for approval purposes on a refinance? How do you write the letter? How much can the daughter and her husband receive from the family member in the state of Maryland? Thank you!! What if a family member gives a cash gift to his daughter and her husband every year and you want the mortgage company to recognize this for approval purposes on a refinance? How do you write the letter? How much can the daughter and her husband receive from the family member in the state of Maryland?
Thank you!!

]]> By: Nicole http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-132385 Nicole Sat, 13 Jun 2009 02:07:41 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-132385 Eva - My uncle is an EU citizen and will be gifting us the money for our down payment. We asked the bank today whether that's a problem, and they said it doesn't make a difference - they just need the gift letter and we need to be sure that we leave enough time for the wire transfer to come through from overseas before our closing date (in the past it has taken 7-9 business days). Eva – My uncle is an EU citizen and will be gifting us the money for our down payment. We asked the bank today whether that’s a problem, and they said it doesn’t make a difference – they just need the gift letter and we need to be sure that we leave enough time for the wire transfer to come through from overseas before our closing date (in the past it has taken 7-9 business days).

]]> By: Eva http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-132358 Eva Thu, 11 Jun 2009 22:57:46 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-132358 Can I receive gift money for a downpayment from another country? Can I receive gift money for a downpayment from another country?

]]> By: needs help http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-118886 needs help Thu, 17 Jul 2008 17:12:34 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-118886 okay, i have a question and i would really some help. here's the scenario. my husband and i just got married (about 2 months ago) and have found a house. unfortunately his credit is bad so we opted to take out the mortgage under my name only. our parents are each offering to lend us 15K for the down payment with the understanding that we will pay them back within 7 years. Now, the bank has approved me for the price of this home (which we are in contract for), with the understanding that i will be putting 20% down. With these loans from our parents we're in the clear, but our parents don't want to sign the gift letter saying that this is a full gift because this is not the case. we have only 2 weeks until our closing date. what can we do about this? is there any way around the gift letter? do all lenders ask for a gift letter? okay, i have a question and i would really some help.

here’s the scenario. my husband and i just got married (about 2 months ago) and have found a house. unfortunately his credit is bad so we opted to take out the mortgage under my name only. our parents are each offering to lend us 15K for the down payment with the understanding that we will pay them back within 7 years. Now, the bank has approved me for the price of this home (which we are in contract for), with the understanding that i will be putting 20% down. With these loans from our parents we’re in the clear, but our parents don’t want to sign the gift letter saying that this is a full gift because this is not the case. we have only 2 weeks until our closing date.

what can we do about this? is there any way around the gift letter? do all lenders ask for a gift letter?

]]> By: Cristie http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-114486 Cristie Thu, 17 Jan 2008 08:20:45 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-114486 My limited understanding of the gift tax law is that a gift will not get you into "hot water" with the IRS unless you do not claim said gift on your income tax return (form 709). You can give up to $12,000 per giftee tax-free. The remainder of the gift is subject to a gift tax, however, the tax can be applied against the unified tax credit (the most you can give in your lifetime). For example, you give your daughter and your son-in-law each $25,000. The first $12,000 each is exempt. The remaining $13,000 each, or $26,000, is subject to a gift tax of about $5,000. You apply this to your unified tax credit, and do not have to "pay" any additional taxes, simply use form 709. Of course, you have reduced by $5,000 the amount you can exempt for future gifts or your estate upon your passing. The recipient has no income tax ramifications from a gift. Assuming your estate is not over $2 million, it probably can't hurt to take advantage of this method of gifting. Please correct me if I am wrong. My limited understanding of the gift tax law is that a gift will not get you into “hot water” with the IRS unless you do not claim said gift on your income tax return (form 709). You can give up to $12,000 per giftee tax-free. The remainder of the gift is subject to a gift tax, however, the tax can be applied against the unified tax credit (the most you can give in your lifetime). For example, you give your daughter and your son-in-law each $25,000. The first $12,000 each is exempt. The remaining $13,000 each, or $26,000, is subject to a gift tax of about $5,000. You apply this to your unified tax credit, and do not have to “pay” any additional taxes, simply use form 709. Of course, you have reduced by $5,000 the amount you can exempt for future gifts or your estate upon your passing. The recipient has no income tax ramifications from a gift. Assuming your estate is not over $2 million, it probably can’t hurt to take advantage of this method of gifting. Please correct me if I am wrong.

]]> By: nickel http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-91784 nickel Wed, 10 Oct 2007 15:24:20 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-91784 Lucky: A gift is a gift. They're worried that a bunch of money that suddenly appears in your account might be an under the table loan, which would make you a bigger risk. I would imagine that he could just say that he's your future father-in-law, and that he's giving you a gift to be used toward the purchase of a home. They just want to be sure that you're not over-extending yourself by borrowing money from other people and using that as your down payment. They want the down payment to be *your* money (gift or otherwise). Lucky: A gift is a gift. They’re worried that a bunch of money that suddenly appears in your account might be an under the table loan, which would make you a bigger risk. I would imagine that he could just say that he’s your future father-in-law, and that he’s giving you a gift to be used toward the purchase of a home. They just want to be sure that you’re not over-extending yourself by borrowing money from other people and using that as your down payment. They want the down payment to be *your* money (gift or otherwise).

]]> By: lucky http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-91729 lucky Wed, 10 Oct 2007 13:45:06 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-91729 But what If the donation if from a non-relative such as a future father in law??? But what If the donation if from a non-relative such as a future father in law???

]]> By: Fifi Sani http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-46163 Fifi Sani Wed, 06 Dec 2006 05:15:50 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-46163 so regarding the gift equity....will the seller be taxed on the purchased price when really they only recieved the purchase price minus the gift equity? or can they write of their gift equity? so regarding the gift equity….will the seller be taxed on the purchased price when really they only recieved the purchase price minus the gift equity? or can they write of their gift equity?

]]> By: Maria West http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-18519 Maria West Fri, 18 Aug 2006 12:43:02 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-18519 I have a customer who is actually purchasing a property from a relative. The balance on the mortgage being $101,000...the selling price is $150,000. The property, though, is appriaised at around $400,000. The lender wants a "gift letter" from the seller. (These are two cousins.) How should the gift letter be drawn up? What needs to be stated in the letter? Maria (Savannah) I have a customer who is actually purchasing a property from a relative. The balance on the mortgage being $101,000…the selling price is $150,000. The property, though, is appriaised at around $400,000. The lender wants a “gift letter” from the seller. (These are two cousins.) How should the gift letter be drawn up? What needs to be stated in the letter?

Maria (Savannah)

]]> By: amanda http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-5951 amanda Mon, 15 May 2006 21:28:38 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-5951 I am a Sr. Processor for a mortgage company, and often the closing monies do need to be "seasoned" usually 60days, but sometimes 90days. but not for gifts, expecially if it's a gift of equity. As for having the money given to you "off the record" this is the better way to go, if you have someone whose willing to give you the money ahead of time, deposit it in your bank right away so that you can meet the "seasoning" requirement. It is better to go this route if possible as more programs will be available to you. I am a Sr. Processor for a mortgage company, and often the closing monies do need to be “seasoned” usually 60days, but sometimes 90days. but not for gifts, expecially if it’s a gift of equity.

As for having the money given to you “off the record” this is the better way to go, if you have someone whose willing to give you the money ahead of time, deposit it in your bank right away so that you can meet the “seasoning” requirement. It is better to go this route if possible as more programs will be available to you.

]]> By: Akhil http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-2994 Akhil Mon, 10 Apr 2006 16:31:38 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-2994 What is the benefit of submitting this letter versus not submitting it and taking the loan from a family member "off the record" What is the benefit of submitting this letter versus not submitting it and taking the loan from a family member “off the record”

]]> By: nickel http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-2928 nickel Sat, 08 Apr 2006 00:57:11 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-2928 Hah! Just searched your site and found your example. I guess there's not many ways of saying it. However, our mortgage broker did end up sending a much more complicated form that asked for the donor's bank account info, etc. I guess that's to be sure that the funds are available if you haven't deposited them yet. Much easier to stick with the simple letter, though, if it's clear that you already have the funds. Hah! Just searched your site and found your example. I guess there’s not many ways of saying it. However, our mortgage broker did end up sending a much more complicated form that asked for the donor’s bank account info, etc. I guess that’s to be sure that the funds are available if you haven’t deposited them yet. Much easier to stick with the simple letter, though, if it’s clear that you already have the funds.

]]> By: jim http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-2909 jim Fri, 07 Apr 2006 13:14:44 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-2909 Gee that gift letter sure looks familiar... :) Gee that gift letter sure looks familiar… :)

]]> By: RS http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-2880 RS Thu, 06 Apr 2006 00:46:40 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-2880 It was a long time ago...so I may be forgetting exactly how it went, but my wife and I got a gift from her parents to buy our first house and we didn't need a letter. I think that they did ask us about it, but didn't require a letter. I could be wrong though. It was a long time ago…so I may be forgetting exactly how it went, but my wife and I got a gift from her parents to buy our first house and we didn’t need a letter. I think that they did ask us about it, but didn’t require a letter. I could be wrong though.

]]> By: nickel http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-2878 nickel Wed, 05 Apr 2006 22:29:27 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-2878 As I understand it, no, the money doesn't have to be in your possession for an extended period of time. In fact, one lender that I've talked to has a template for the letter, and it includes a request for info regarding the account that the gift funds will come from, such that they can verify that the funds actually exist. So in this case, the funds don't even have to be in your possession yet. They just want proof that the funds exist and that you will have access to them. As far as the money being 'seasoned' goes, that's probably to get the deposit outside the range of what the underwriter will look at in terms of account statements. If they see a large deposit, they'll want to know where it came from. If the funds appear to have been there all along (because you made the deposit over 90 days ago), they'll just assume that it was your money in the first place. As I understand it, no, the money doesn’t have to be in your possession for an extended period of time. In fact, one lender that I’ve talked to has a template for the letter, and it includes a request for info regarding the account that the gift funds will come from, such that they can verify that the funds actually exist. So in this case, the funds don’t even have to be in your possession yet. They just want proof that the funds exist and that you will have access to them. As far as the money being ’seasoned’ goes, that’s probably to get the deposit outside the range of what the underwriter will look at in terms of account statements. If they see a large deposit, they’ll want to know where it came from. If the funds appear to have been there all along (because you made the deposit over 90 days ago), they’ll just assume that it was your money in the first place.

]]> By: Making Our Way http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/comment-page-1/#comment-2877 Making Our Way Wed, 05 Apr 2006 22:22:07 +0000 http://www.fivecentnickel.com/2006/04/05/how-to-write-a-mortgage-gift-letter/#comment-2877 $0.05, Very interesting idea the gift letter. I have a question, my lenders, in the past, reqquired that downpayment money be "seasoned". This means that it had been in my possession for more than 90 days. I wonder how it applies to money gifted from a relative for a downpayment? Have a wonderful Wednesday, Making Our Way $0.05,

Very interesting idea the gift letter.

I have a question, my lenders, in the past, reqquired that downpayment money be “seasoned”. This means that it had been in my possession for more than 90 days.

I wonder how it applies to money gifted from a relative for a downpayment?

Have a wonderful Wednesday,
Making Our Way

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