Gifts are a big part of buying a home for a lot of purchasers. They can also be a source of anxiety: documentation requirements for gifting funds can be a little overwhelming – especially for a lot of first time buyers.
So to help make the process as easy as possible, here are the items needed:
- Gift letter signed by donor and recipient – for a copy of a gift letter click here
- Evidence of donor’s ability to provide funds (copy of bank statement from donor showing sufficient funds in the account)
- Copy of gift check – cancelled check is best (front and back after check has cleared)
- Copy of deposit slip or printout confirming funds have been deposited. We recommend not using an ATM to make the deposit
Because lenders have to prove that funds for the gift are truly coming from the donor, we ask for a recent bank statement from the donor proving they have sufficient funds to give a gift. Donors can take credit card advances, sell cars, liquidate stock etc, but we have to be able to prove the funds truly came from them and not from a party or source that is unacceptable. For donors that are concerned about divulging private information, this can be a real challenge. For those donors that don’t want to provide financial information, our suggestion is to provide gift funds well in advance of the purchase in which case the funds would be “seasoned” and would not be considered a gift.