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Gift Letters for Mortgage: Create Yours Now With Our Free Tool
HomeLight
Real Estate
4 days ago
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If you’re getting help from a family member or friend to cover your down payment, your lender will likely ask for a gift letter. This document helps verify that the funds are truly a gift, not a loan that could affect your ability to repay the mortgage.

Gift letters for mortgage companies are a common part of the homebuying process, especially for first-time buyers. But it’s important to get the format right and understand the rules around using gifted funds.

In this post, we’ll explain what a gift letter is, what it should include, and how to create one in minutes with our free tool.

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What is a gift letter for a mortgage?

A gift letter is a formal document that tells your lender someone has given you money to use toward your home purchase, and that you’re not expected to pay it back.

Lenders require this documentation because it helps them determine your actual debt load and financial stability. Without a gift letter, gifted funds could be mistaken for a loan, which might change your debt-to-income ratio and affect your loan approval.

What should a gift letter include?

A mortgage gift letter doesn’t need to be long, but it does need to include a few key details:

  • The name and address of the person giving the gift
  • Your name (as the buyer or borrower)
  • The amount of the gift
  • A clear statement that repayment is not required
  • The donor’s relationship to you
  • The address of the home you’re buying
  • The date the funds were transferred
  • The donor’s signature

Lenders may also request a copy of the donor’s bank statement and proof of the funds transfer. These steps help confirm the money came from a legitimate source and won’t impact your loan terms.

Create your gift letter now (free tool)

Don’t want to start from scratch? Use our free Mortgage Gift Letter Generator to quickly create a lender-approved letter with all the right details.

Just fill in a few fields — like your name, the gift amount, and your donor’s information — and your personalized gift letter will be ready to download or print. It’s the fastest way to check this task off your mortgage to-do list.

The following sections will walk through who can gift money, rules by loan type, and important things to know before using gift funds.

Who can gift money for a down payment?

If you’re buying a primary residence, most lenders allow gift money to come from a relative or someone with a close relationship to you.

While there are some exceptions depending on loan type, eligible donors typically include:

  • A parent, grandparent, or sibling
  • A spouse or domestic partner
  • A fiancé or fiancée
  • A close friend (if you can document the relationship)

What doesn’t qualify? Funds from the seller, a builder, or any party with a financial interest in the transaction are generally not allowed. Lenders want to ensure that the gift is genuine and not a disguised incentive or side deal.


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