Posted on: 09th Dec, 2010 11:02 pm
My husband and I are under contract on a house, part of our downpayment/closing funds are coming from my mother, as she is repaying a loan we made to her. The loan officer is stating that my mother should write a gift letter, since that is "easier" than documenting that we made the loan to my mother, for which she is repaying us.
Since there is truly no obligation for us to pay my mother back (since it is our money in the first place), BUT it is not in fact a gift, because SHE has the obligation to pay it to us, would it be fraudulent to use a gift letter in this case?
The loan to my mother was made by two checks, from our checking acct, within the last 2 years.
Also, the loan to my mother was short-term, while HER mother (my grandma) was transferring money from Canada, which just happened recently. So, if my mother provides her bank statement to our lender, it will show the recent deposit of $10,000 which she then wrote as a check to us. Is the lender likely to, and would it be reasonable for them to ask for my grandmother's bank statements etc, showing her source for the funds, or will they only go one step back as it were?
Since there is truly no obligation for us to pay my mother back (since it is our money in the first place), BUT it is not in fact a gift, because SHE has the obligation to pay it to us, would it be fraudulent to use a gift letter in this case?
The loan to my mother was made by two checks, from our checking acct, within the last 2 years.
Also, the loan to my mother was short-term, while HER mother (my grandma) was transferring money from Canada, which just happened recently. So, if my mother provides her bank statement to our lender, it will show the recent deposit of $10,000 which she then wrote as a check to us. Is the lender likely to, and would it be reasonable for them to ask for my grandmother's bank statements etc, showing her source for the funds, or will they only go one step back as it were?
Hi juneak,
Have you informed the lender about your true situation? You should inform him about your situation and he may suggest you a way out. I feel that though your mother has the obligation to pay you, it will be considered as a gift by the lender. In case of gifted money, the lender can ask for bank statements and gift letter.
Thanks,
Jerry
Have you informed the lender about your true situation? You should inform him about your situation and he may suggest you a way out. I feel that though your mother has the obligation to pay you, it will be considered as a gift by the lender. In case of gifted money, the lender can ask for bank statements and gift letter.
Thanks,
Jerry
I need to contact site admin urgently. Can you understand me?
Hope for answer
Hope for answer
Is it possible to contact administration?
By the way, anybody home?!
By the way, anybody home?!
You must verify one of two things if you are receiving a large deposit.
1. Gift
2. Repayment of a loan
Since you probably signed no loan documents, GIFT LETTER Is easiest route.
Gift letter states repayment is not required. It does not say you can not repay the gift. It just syas not required. It is your money anyway. Mom is just giving/gifting it back.
Statements cut off every 30 days. Provide the gift letter and copy of statement showing she has the ability to give the gift (if required) with the first statement available that does not show large deposit.
I guess you could show the large deposit. Also, show you gave her the money for the large deposit. If you gave her the money, you must have a statement showing the debit came from your account.
The purpose of documenting large deposits is solely to verify you are not getting an unsecured loan that has monthly payments associated with it.
1. Gift
2. Repayment of a loan
Since you probably signed no loan documents, GIFT LETTER Is easiest route.
Gift letter states repayment is not required. It does not say you can not repay the gift. It just syas not required. It is your money anyway. Mom is just giving/gifting it back.
Statements cut off every 30 days. Provide the gift letter and copy of statement showing she has the ability to give the gift (if required) with the first statement available that does not show large deposit.
I guess you could show the large deposit. Also, show you gave her the money for the large deposit. If you gave her the money, you must have a statement showing the debit came from your account.
The purpose of documenting large deposits is solely to verify you are not getting an unsecured loan that has monthly payments associated with it.
