Question:

How to write a Gift of Equity Letter?

Answer:

You could write a Gift of Equity Letter or use a Gift of Equity Letter form. Gift of Equity Letter form might be possible to download from MortgageQnA's Forms section. If not available yet, download a Gift of Equity letter sample from the web - they are available free of charge - and ask your attorney whether any modifications are necessary. 

Also, you could always handwrite the following:

Gift of Equity Letter

To whom it may concern, [or name of closing attorney or mortgage lender]

[Here, state the purpose of the letter - I (full name of seller) am giving my (daughter, son, whatever relationship between donor and recipient), (name of relative), a gift of ($XX,XXX) to be used toward home purchase.]

[State explicitly that the gift is not to be repaid].

Sincerely,

(Name of seller/donor)

Put a date and sign it. This type of Gift of Equity letter should work in most of the cases but some lenders may not accept it. Using a Gift of Equity Letter Form in detailed format is recommended.

Also, there are certain tax issues, associated with gifts. Contact a tax professional to make sure this is done properly.

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Common misspellings: mortage and morgage