Posted on: 03rd Dec, 2009 04:18 pm
our home appraised for significantly less than we expected. my grandfather loaned us in excess of 15,000 to pay down the current mortgage so we could refinance and get a better rate. we are using a gift letter to document the funds. we plan on paying him back with interest when we can. should a gift letter be used or some other document? are there any repercussions of disclosing that the funds will be repaid in the future? just a debt-income ratio issue, even if the repayment is made in the future?
You should use the gift letter. According to the bank, they are to assume that the money is a "gift" and it will not be repaid. However, if you make other arrangements with your grandfather, that us between the two of you.
indeed...no need to disclose your eventual intent to repay him. that's something, i take it, that is voluntary on your part anyway. there's no sense in muddying up the waters with extra information.
thanks
