Gift Letters for Home Loans
There is no question that homes in Australia are expensive. Considering the fact that prices of homes are forever going up, then it may be difficult to save up enough money for a deposit with the banks in order to get a home loan.
In order to remedy this, those without enough funds, but who have relatives or parents who are well-off can get by with the use of a gift. A gift, which is usually in cash, is used as a deposit in order to be able to get home loan approval. The gift is usually enough money to make the deposit and you are not obliged to repay the amount.
The problem is banks and lenders often do not consider deposits when they think that the money being used was only loaned to the person making the deposit. This is where the gift letter comes in. With the use of the gift letter the bank or lender is sure that the cash given to the borrower is truly a gift and they can then assess your loan application for approval.
This is the reason why a gift letter is so important. It is enough to make or break a loan application. The gift letter usually states the amount being given to the borrower and that the gift is non-refundable or repayable.
There are certain requirements that is needed in a gift letter in order for the bank to accept it. This includes little things such as including the date, Thus, with the help of a gift letter for a home loan even those who do not have enough to make a deposit for a loan can own a home of their own.
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