Family Member Gift Letter Template (Free Printable)

Individual completing a blank family member gift letter template
Sample of Family Member Gift Letter Template

What is a family member gift letter?

A family member gift letter is a document that confirms the transfer of money or assets from one family member to another, usually for the purpose of helping with a major purchase, such as buying a home.

The primary purpose of a family member gift letter is to satisfy the requirements of lenders when a borrower is using gift funds for a down payment or closing costs. Many lenders require a gift letter to ensure that the money being used is not a loan that would affect the borrower’s debt-to-income ratio. By providing this letter, the borrower can demonstrate that the funds are a genuine gift and not an additional financial obligation. This can help the borrower qualify for a loan or secure more favorable loan terms.

The benefits of a family member gift letter are numerous.

  • It allows individuals to receive financial assistance from their family members without incurring additional debt. This can be particularly helpful for first-time homebuyers who may be struggling to save for a down payment.
  • Using gift funds can help borrowers avoid costly private mortgage insurance (PMI) premiums that are typically required for loans with a down payment of less than 20%. Furthermore, the letter provides a formal record of the gift, ensuring transparency and preventing any misunderstandings or disputes in the future.

What to include in a family member gift letter?

When writing a gift letter to a family member, it is important to include certain key elements to ensure clarity and understanding.

  • Date: Begin the letter with the date to establish its timeliness and ensure that the information provided is accurate.
  • Introduction: Start by addressing the family member and expressing warm wishes or gratitude.
  • Reason for the Gift: Clearly state the purpose of the letter and explain the reason for giving the gift.
  • Relationship: Mention the relationship between the giver and the recipient, emphasizing the familial connection.
  • Description of the Gift: Provide a detailed description of the gift, including its nature, value, and any relevant specifications.
  • Conditions or Restrictions: If there are any conditions or restrictions associated with the gift, clearly state them to avoid any confusion or misinterpretation.
  • Closing: Conclude the letter by expressing well wishes and signing it with the giver’s name.

Tips to create a family member gift letter

Here are some tips to help you create an effective family member gift letter:

  • Clearly state the purpose: Begin the letter by clearly stating the purpose. Whether it’s a birthday gift, a financial contribution, or a sentimental item, make sure to specify the reason for the gift. This will help the recipient understand the intention behind the gesture and appreciate it even more.
  • Include all necessary details: It’s essential to include all relevant information in the letter. This includes the name and address of the recipient, as well as the date of the gift. Additionally, if the gift has any specific conditions or restrictions, such as being used for a particular purpose, make sure to mention them in the letter.
  • Express gratitude and love: A family member gift letter is not just a formal document; it’s also an opportunity to express your love and gratitude. Take the time to write a heartfelt message conveying your emotions and appreciation for the recipient. This personal touch will make the gift even more meaningful and cherished.

By following these tips, you can ensure that your letter effectively communicates your intentions and showcases your love for the recipient. Remember, a well-crafted gift letter not only serves as a formal document but also as a token of your affection and thoughtfulness.

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