Q & A: Parent Gifts & Loans

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  1. Do I have to disclose a parent's gift?
  2. What is a gift letter?

Do I have to disclose a parent's gift?

When purchasing a home, a lender can ask to view your financial account statements for the last few months (generally the last 60 or 90 days). In doing so, they will research how your funds were obtained. If you obtained money as a gift during that time, your lender may ask for a gift letter from the giver stating that no repayment of the gift is expected.

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What is a gift letter?

Often buyers are given money from family to assist with the purchase of a home. In such cases, lenders want to verify that the buyer received the money as a true gift, and not as a loan that would require repayment. If a buyer received gift money, the lender will require the donor to write and sign a gift letter – which is documentation stating that the money was given as a gift to the buyer.  

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