Last Updated on April 21, 2024

Gift Letters for a Mortgage – What You Need to Know

By Alan F Macdonald

Some people get a gift from their family when they are purchasing their first place. This could be because they are on the cusp of being able to afford a home, but need a little help, or because a family member wants to help out the buyers. Its also not uncommon for parents to have some money saved up for their kids for a home. Generous, I know!

Whatever the reason, a gift like this must be properly disclosed to the mortgage company. You can’t just give people money so that they can afford a bigger loan than they usually would have – or a loan that wouldn’t normally be able to afford! The most important stipulation about a gift, is that it is a gift. This is not just another loan. You can’t promise to pay back mom and dad, or your aunt and uncle, or you sister. This money becomes yours, and it is used to pay for a part of the house you’re planning to purchase.

Here is an example of a gift letter:

Gift letter mortgage example, downloadable pdf available on

(Click the link below for a downloadable PDF version of this file)

Example Gift Letter for the Purchase of a Home

Notice that the donors – the family member forking over the cash – has to agree that this is indeed a gift and that it is not being repaid and that is isn’t coming from another party. For example, you can’t have your boss loan you money for a house under the guise of a gift from your parents. That’s mortgage fraud. The bank or mortgage company is the only one being paid back here. Remember, if you have another loan – a loan on anything – they need to know about it. It could compromise your ability to pay the mortgage. If that happens, everyone loses.

Remember that gift letters like this do not affect you getting money for renovations or anything else like that. This is just for someone who is getting a donation from family members to buy a house or condo.


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