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Can I get a sample gift of equity letter?

Can someone send me a sample gift of equity letter? Thank you.

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

JC, this format for gift of equity letter should work:

[quote:c4957c2d29]
To whom it may concern,

The purpose of this letter is to state that I am giving my (relationship between donor and recipient), (recipient's name), a gift of ($XX,XXX) to be used toward the purchase of a home. There is no expectation of repayment of this gift.

Sincerely,
(donor's name)
[/quote:c4957c2d29]

Also, after letter is made it should be signed and dated.

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miller_st's picture
miller_st | Joined: January 17, 2007 04:47 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Letter Lichtenberg has given is of the short format and some lenders may not accept it.

You can use this detalied format of a gift of equity letter also. Take out a print of the letter and show it to your lender he will tell you if it can be used or not.

[quote:fcd9301e4e]

GIFT LETTER

I/WE ______________________________________________________________________________
YOUR NAME(S)

residing at

____________________________________________________________________________
YOUR ADDRESS and TELEPHONE NUMBER

AM/ARE the ____________________________ of [home buyer's name].
RELATIONSHIP

I/We have given or will give the sum of $____________ as a gift to [home buyer's name] towards the
purchase of the property located at:

[property address]

I/We certify that the above gift was or is given in good faith and repayment of such gift is not required. The funds given to [buyer's name] were not made available from any person or entity with an interest in the sale of the property including the seller, real estate agent, broker, builder, loan officer or any entity associated with them. The above funds will be drawn on my account with

_________________________________________
NAME OF YOUR BANK

_________________________________________
ADDRESS OF YOUR BANK

_________________________________________
ACCOUNT NUMBER

________________________________
SIGNATURE OF GIFT DONOR

Date: _____________________________

________________________________
SIGNATURE OF BORROWER #1

Date: _____________________________

[/quote:fcd9301e4e]

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We recently had a death in the family and the heirs want to sell house of deceased to my Daughter the deceased grand daughter. question if all parties are in agreement can we reduce the sale of the house from 80000.00 to 60000.00 and consider the difference a gift of equity with out money changing hands, or should we just reduce the price?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Omer,

Welcome to forums.

You can reduce the price if that makes it easy for you to buy the home. But if you consider the remaining as gift of equity, your daughter need not pay gift taxes on what she recives. Rather, the individuals offering the gift will have tax considerations provided they don't qualify for gift tax exemptions .

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

In the sample gift letter given here, it states the amount that is given. However, it says "towards the purchase of the property located" what if we recieve 100,000 however only use 70,000 towards the purchase of the new home and the rest we use to help us move and cover breaking our current rental lease?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Chitiris,

As you are using 70,000 towards the purchase of the property, you should write that in the gift letter which you will be showing to the lender. You will not have to write 100,000. However, the person gifting you the money will be paying gift taxes. if any, on the 100,000 and not on the 70,000.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I need to write a letter to my sibling concern renowning their share in my mother home who die 20 years. Six have given their share Two have not.
I have paid the foreclosure, taxes and remolding house.

Help!!!!

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

I need to write a letter to my sibling concern renowning their share in my mother homw who died 20 years ago. Six of my sibling have given their shares; two have not. I've paid the foreclosures, taxes and remolding the house. I need sample letter so I can put the propert in my name.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

How many family member can gift you money to be use for a down payment of a house that we are buying. We need 60,000 and I dont know how to get this done. Please help.... thanks

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jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Wajo,

There is no limit to the maximum number of family members who can gift you money to make the down payments. If there are, say, 10 of your family members who want to assist you with the down payment, they can go ahead and do so. As long as you are not borrowing the money to make the down payment and you can show the lender the source of the gift money, there should not be any problem for you.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

wajo, the fewer the better, though - just think of all the paperwork and the potential for confusion when this arrives in your lender's office. i agree with what jenkin7 told you, but caution you to keep it down to a dull roar, if possible.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Since the Apr 30 deadline has expired for the government tax credit, are there any new ones for a first time home buyer? :?:

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome Sharonjo,

I haven't heard of any new tax credit for first time home buyers.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

No, Sharon, you won't find any more tax credits. Now that's not to say that the government couldn't reinstitute it at some date in the future, but for now, it is gone.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

For years I have been paying in our "house account". My mother "owns" the house but the money I have been paying in is being applied toward the downpayment.... so in my mind I have been paying for it. The bank is telling me to ask for a Gift of Equity Letter.

Why would it be a Gift of Equity Letter if I really paid for it. Am I getting hung up on details and it doesn't matter as much?

Can give more details if you need them.

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi kimmo,

I too did not understand why the lender is asking for a gift of equity letter. I would suggest you to contact your lender and check out why he is asking for it.

You can check out the given page to get a sample gift of equity letter:
http://www.mortgagefit.com/predeal/giftequity.html

Thanks

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Kimmo, it's easy to understand, actually. Since you are not an owner of the home, your Mom would need to provide this gift letter for you. The funds you've paid into the home are, truly, your equity, but as you're not on title, no lender would consider it that way.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

if some one is gifting money do they have to state where the funds are coming from?

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Yes, Missy, gift funds must be "sourced."

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I gave my son $45,000.00 from the sale of my home to him. We signed a loan agreement the money would be repaid within 4 years. No gift of equity letter was ever signed.
Now he refuses to repay the loan. He ststes this is mortgage fraud and the mortgage co can take the house back.
How true is this? My opinion, he is attempting to frighten me into stop requesting repayment.

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

If you and your son had signed an agreement regarding the loan, then you have the rights to receive the payments. You can even take legal actions against your son by contacting a lawyer if he is not paying the dues to you.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Could this make my nephew, who bought my late mother's (his grandmother's) house ineligible for the first time buyer tax break? He and his wife applied for it but were denied. The house was sold under the "estate of..."
Any help is greatly appreciated.

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi bassithound!

Welcome to forums!

Your nephew and his wife won't be considered as a first time buyer as they already own their grandmother's house.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am confused. The house was on the market when my Mom died. My nephew was renting at the time and we lowered the price so they could buy it. They never owned a home before. They bought it (October, 2009)before the deadline expired for the tax break. What could be the reason for the denial. A friend did the same thing for their son around the same time and he got the tax break. Thank you so much for your input. I feel terribly for my nephew because he wanted to keep the house in the family.

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi bassithound,

If a property is purchased from some one who is in blood relation with you, then you do not qualify for the first time homebuyer's tax credit. That may be one of the reasons why your nephew won't qualify for a tax credit.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

If I offer a gift of money to a relative for the purchase of their house, let's say $7,000. Whose responsible for paying taxes on that money?
Thanks!

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Lorena!

Welcome to forums!

As you're gifting the money, you'll be liable for paying gift taxes. However, there is a gift tax exemption of $13,000 annually. Thus, you won't be liable for paying the gift taxes for $7,000.

Feel free to ask if you've further queries.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thank you for the feedback!

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

can a brother inlaw give this down payment if he is not marryed to your sister any more

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

The brother-in-law may gift the down-payment. However, it will be better if the borrower discusses the matter with the lender and takes his opinion in this issue.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'm unclear on who retains gift info for mortgage paymts.
I was planning to get a low-no interest loan from a family member, for which the lender requests a gift letter & copy of cancelled " gift" check.
I plan to pay this back by year-end & not get involved with cosignatures, but my family now won't sign the letter because of expected taxes.
Does the IRS retain this info, & what is the best route, since it is not really a gift?

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Ericbob!

Welcome to forums!

You and your family should contact a CPA in this regard and take his/her opinion in this matter.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Can you show me a format sample of a gift letter, that I would write and sign, for a friend of 20 years. He is the father of my grandchild. This would be for a FDA loan. Thank you

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome tara,

You can check out the given page in order to find out a link for a sample gift of equity letter: http://www.mortgagefit.com/predeal/giftequity.html

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Ericbob, the IRS isn't involved in this. If you have serious tax questions, you truly ought to speak with a tax advisor, but no lender shares information with taxing authorities - it's not even really relevant. You're nervous about nothing in that case.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

The lender send a fill out letter to have my brother fill out for gifting me $2000.00 to close the sale of a house I am buying. I povided the other $5000.00. The gift was cash that I deposited in my bank account. On the letter the lender wants my brothers bank account number which he will not give out as they are quite wealthy and dont want to give out that information. Is it required that the gifter must give out the bank account information?

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Yes, it is, Karen. Lenders have seen way too much fraud over the years, and they need to button-down every last piece of the puzzle. If your brother won't divulge the information requested, you'll have a hard time using that $2000 from him. You might have to come up with another relative who's a bit more cooperative, who can also provide you with a couple thousand dollars.

If you can cajole your brother into doing what needs to be done, the lender ought to have no problem with it. They're simply looking for adequate documentation in an effort to verify that you're not trying to be sneaky - what kind of funds he has at his disposal won't ever be a part of the equation.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My father sold his house to my brother the gift letter was in the amount of $24000 does my father have to pay taxes on that amount?

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi rose,

There is a gift tax exemption of $13000. Your father will have to pay taxes for the rest of the amount.

Thanks,

Jerry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have a second home, it's a town house, it worths $300,000.00 market value. My son and daughter-in-law want to buy it, and I agreed to sell to them for $150,000, so they dont have to pay for down paymenr and closing costs. Please advise what kind of taxes that we both have to pay. Thank you.

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome Sharon,

You may be liable for property transfer taxes, deed recording fees, etc. The attorney who will handle the whole process will let you know what taxes you will be liable for.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,
I am buying my brothers house.Appraisal = $315,000-200,000he
Owes on the house plus my closing cost.the balance $115,000
Will be a gift of equity.can this happen?what if I don't qualify
Because of bills I owe that puts me over the ratio?where does it go on the contract and what wording in the letter is necessary?

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Can I use the appraisal value for the sales price?

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jenny,

You can find a sample gift letter here: http://www.mortgagefit.com/know-how/giftequity-letter.html#24715 .

The appraisal value will be the value of the property and depending upon this, you will get the loan amount.

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