Why did my gift funds requirement increase?

If you are using gift funds for a down payment on a home purchase and the requirement for gift funds increases after your bank account has decreased, you may need to provide additional documentation to meet the new requirement.  The underwriter may ask for more information to confirm that you still meet the loan conditions, including any gift fund requirements, if they become aware of a change in your financial situation, such as a drop in your savings or checking account balance.

The lender will normally need paperwork from the donor to confirm that the funds are a genuine gift and not a loan if you are donating gift money for your home loan. This supporting information could include a gift letter, donor bank statements, and a copy of the check or wire transfer that was used to send the donation monies.

It’s important to note that lenders have strict guidelines for gift funds, and failure to provide the required documentation could delay or even derail your home purchase. Make sure you are transparent with your lender and provide all the necessary information to ensure a smooth and timely loan process.

You should speak with your lender or mortgage underwriter as soon as possible to go over your options and any additional paperwork that might be needed if you are worried that a decline in your bank account balance may affect your ability to provide gift funds for your mortgage loan.