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Full Financial Disclosures and Gift Letters

My realtor faxed in my offer Monday morning on a home [3] that seemed like an incredibly good deal. It’s a 2,400+ sq ft. place in Columbia, MD with four reasonably sized bedrooms (not counting the basement), three and a half baths, and a great deck. The offer I made was competitive enough to warrant the seller’s agent to request what is termed “full financial disclosure,” which meant I was to detail my job, salary, assets, and liabilities in a stock form provided by Century 21. The form was a little funny considering how it asked for the information but the Century 21 logo meant I could trust this was all the information they needed. What struck me as a little strange was that I didn’t need to provide any proof of any of this, though the pre-approval letter (where I did provide proof to LendingTree [4]) did provide secondary proof.

The funny thing about the form, other than I didn’t provide any bank statements or pay stubs, was that in the listing of asset accounts it had checking, savings, credit union, and then an other category. Under checking and savings, there was only enough room for two accounts. I think in the age of online banks like ING and Emigrant, having only two savings or checking accounts is rare. Also, I have a checking and savings account at a credit union (through work and through my father’s work, since I opened those when I was a teenager) so do I count those in credit union or the regular checking and savings. I just went with putting it all in checking and savings and a small sum in the credit union – making sure not to double count any of the accounts.

The gift letter portion of the title refers to how I’m going to get money for the downpayment from my parents, specifically my father (someone has to be writing the gift letter, so it was my father). I searched for about ten minutes on Google and couldn’t find any example gift letter template, just a list of some criteria. Essentially, the letter just needs to say who is giving who money, that it is a gift, and that there is no expectation that the money will be repaid (i.e. the gift is not a loan). The money must be used towards closing costs or the downpayment by rule, but the letter doesn’t need to say this. I’ve provided an example gift letter template that I created myself and that my agent accepted and faxed to the seller.

To Whom It May Concern,
This gift letter is to state the fact that I intend to give to my [nature of the relationship], [your name], a gift of [dollar amount] towards the purchase of a home. This is not a loan and there is no expectation that this sum will be repaid.


[your benefactor’s name]

I should find out this morning whether or not I’m writing a “DENIED!” or a “I’M FANTASTICALLY POOR” follow-up post. 🙂