What should be in a gift letter?

Any general questions you might have in regards to loans and finance.
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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: What should be in a gift letter?

Post by Otto Dargan »

Hi HarleyDude and welcome to the forum.

A gift letter is a letter from your parents or a close relative confirming that they are giving you a gift for you to use as a deposit to buy a property. Most of the lenders accept this form of gifted deposit.

With some lenders, a gifted deposit means you don’t need to prove genuine savings and essentially get into the property market with no deposit. Please note that lenders need to confirm the source of a borrower’s deposit to make sure they are not borrowing the deposit off credit cards or a personal loan.

The trick to getting approved is using a gift letter template that the bank will accept as proof that the money from your parents is non-refundable. Please find a sample gift letter for a mortgage that’s accepted by most lenders.

1/10/2014

To Whom It May Concern:

Re: John Smith

I confirm that I am giving my son Adam Newton an unconditional gift of $50,000 for him to use to buy a property. This gift is not payable or refundable.

Should you require any additional information please do not hesitate to contact me on 02 0000 0000.

Regards,
(SIGN)

William Newton
1 George St Sydney NSW 2000


If a Home Loan Experts mortgage broker is arranging your home loan, please email your signed letter through to them.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: What should be in a gift letter?

Post by Otto Dargan »

Hi HarleyDude,

Australian lenders have stringent requirements for letters confirming the source of a deposit and will often ask for a letter to be amended if it doesn’t meet their requirements.

Moreover, your gift letter should be:
  • Dated.
  • Signed.
  • Contain the name of the person who signed the letter.
  • Contain the name of the person receiving the gift.
  • Confirm the gift amount.
  • Confirm that the gift is unconditional, non repayable and non refundable.
Most of the lenders will accept a faxed copy, however, a few will require your mortgage broker to hold the original letter on file.

Speak with one of our gifted deposit specialists on 1300 889 743 or complete our free assessment form and we can tell you if you qualify or not.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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