A gift letter is one of the most important legal documents to prove the asset is yours. This document shows that you have the mortgage, loan, tax, or any other thing as a gift from your domestic partner or family, as a donated gift, or for your future services. Hence, the document proves it’s a gift, not a loan.
While many people take gifts from others without this document, there is a great risk of facing legal issues in the future, especially if the gift has a high value. You need to create a gift letter to save yourself from legal matters, disputes, and several other problems. Not only this, but you are notarized to eliminate any risk. With a notarized gift letter, you can save your relationships, reduce the chances of getting a hit on your personal finance, and avoid legal matters. So, if you are getting FHA loans, mortgage gifts, or any monetary gift, you need to notarize your gift letter.
Wondering how you can do it? Who does a gift letter need to be notarized? And who can help you in this case? Read further to get all your answers.
It is a formal document that proves the money you have received is not a loan but a gift; the donor’s relationship is strong with you, and he or she doesn’t want their money back.
A gift can be anything like an exchange, sale, transfer of property, or any other thing. Common types of gifts are:
Although gift letters are common when it comes to mortgage down payments, they can be provided with a gift of equity and for estate planning purposes. The equity gift letter includes the home sale below its market value. Typically, it occurs when you get real estate property as a gift from a relative.
Yes, your gift letter needs to be notarized. Also, both the donor needs to sign it to make it valid. If the donor wrote the gift letter, it also tells the relationship you and the donor have. It also shows that it is signed by both people. This document will prove that you don’t need to pay anything. Therefore, it’s important to create gift letters to eliminate any problems.
Notarizing documents is important. And it is more important to notarize gift letters because if the donor wants or dies, you may need to give the gift back to them. Here are a few reasons you need to notarize gift letters.
Notarizing is important if you want to avoid any kind of conflicts and disputes with people. It saves you from legal cases and issues that can occur in the future. Even if you experience any legal problem, you will prove that the property or anything else is given to you as a gift, and you don’t need to return it.
In the era where scammers can easily make anyone a victim, it’s important to have a notarized document. This is because you will have a trustworthy notary who can verify the signatures. This adds an additional layer of protection to your document and prevents others from misusing it.
You don’t need to appear in court and prove yourself when your gift letter is notarized. Under the law, your notarized document is considered a self-authenticating document. This means you can submit it as evidence in a trial without any other argument or additional proof. Your case will be dismissed once you show the notary’s signs.
While many people don’t consider notarizing their gift letter, the document will not be legally binding until you notarize it. Due to the notary’s stamp and signature, the authenticity and credibility of the document will increase.
Before notarizing, you need to create a gift letter. There are several things that you need to keep in mind to notarize your gift letter. Most people use mortgage gift letter templates or other templates so that they can’t forget the important information they need to mention. This is the best option for anyone who has never made a gift letter. If you opt for the template, you can avoid any legal problems in the future. Also, it will make the process seamless and achievable for you. Once you get the template, here are a few things you must clearly mention.
Your mortgage gift letter or others need to include all the basic information so that you don’t have to face any problems in the future. You need to mention the donor’s name and their contact information. Make sure to give the donor’s name, the one they use on personal identity cards. You also need to give your basic details to show that the mortgage gift letter has been given to you.
You need to specify in the document if you are getting a loan, property, asset, or anything else. For instance, if you are getting a property, make sure to mention its address. If you are getting a loan, then specify why you are getting it.
Another thing you need to do is to tell your relationship with the buyer. Are you a friend or family member? While this step might not seem important, it can reduce the risk of forgery.
The gift amount is important to write so that no one can claim you have taken more than they offered. If it’s the house or any other thing, it tells its value. While you will be writing the gift value, the date of transferring the gift is also important to mention. This will prove that you got the gift in the person’s life and are not trying to claim it after death.
When you are writing the gift letter document, make sure to add the statement on behalf of the donor that you don’t need repayment. This clear and precise statement will save you from legal matters.
You need to provide details information about the donor. You need to give the donor’s account number, bank, and type of account. Also, make sure to get it signed by the donor. Remember to suggest your donor read and sign it after accepting the mentioned clause.
While the gift letter requirements for notarization are different in every state, the basic technique for notarizing any document includes three steps: observing the signature, verifying the identity of the person who has signed it, and marking the signature with a seal or stamp.
When you need to notarize a document, people who are going to sign need to give their accurate identification so that notaries can verify the identity of all signers. After verifying the signer’s identity, the notary will help each signer check the document and observe whether they are correctly signing. Once everyone signs the papers, your chosen notary will stamp each sign. The stamp contains the notary’s name, the state in which they give their services, and the notarized document expiry.
Generally, the notarization process needs to be done in person. Therefore, all the signing parties need to choose a date and time so they can be present at the same time at the notary office. Also, when you and other signers go to the notary, you must take a paper copy of the document that needs notarizing and all the other necessary identification.
If you don’t want to visit the notary, you can opt for the electronic notary method. However, looking for experts who can offer you these services is crucial.
The majority of states have changed their notary laws to permit some kind of online notarization. Remote ink-signed notarization (RIN) and remote online notarization (RON) are the two methods that can be used to complete this process.
RON modifies the notarization process from the conventional and IPEN versions. The notary watches the signer sign the paper in wet ink using a video and audio chat service. The notary will then seal each signature with their official seal after receiving the signed document by mail from the signer. The paper is mailed back to the signer once the notary has authenticated each signature.
To enable fully remote document notarization, RON makes use of contemporary audio-video techniques, identity verification, and digital audit trail technologies. The identification verification, signature inspection, and application of the notary seal are all identical procedures in the RON notarization process; they are just carried out through a quicker and more secure means.
Most people are aware of the standard notarization procedure, which involves making an appointment to meet with a notary in person or showing up or contacting a company that offers this type of service.
Businesses that offer financial, title/ loan, and shipping services often provide in-house notarization services as an extension. These can include institutions such as:
These options are an ideal solution if you want the notarization to be done fast. However, they can be costly and depend on the availability of these businesses to provide the service in the first place.
But make sure to look for a credible and trustworthy notary who can notarize your gift money, gift tax, gift down payment, gift funds, gift mortgage loan, or others. Once you choose a notary, check whether they offer notarization services for your type of gift letter.
Wondering how you can find a notary? You may find a notary public in many places who will notarize your paperwork for you. The following are a few of the most typical locations where notaries are present:
If you want to find a notary near your location, you can search the internet for a local notary. You can also find their reviews, detailed information, and website that will give you an idea of whether they are suitable for you or not. Also, you don’t need to hire them at the first meeting. It’s best to consult them, discuss your concern with them, and hire them if you get satisfied.
Whether you get a conventional loan, VA loans, payment gifts, or any other thing as a gift, you need a gift letter to prove your authority on it. While it’s possible that no one claims on it, it’s best to prepare for any legal issues in the future. Also, you need to notarize the gift letter to complete the legal binding. Wondering where you can notarize your document? PandaDoc Notary! Can offer you online notarization of the gift letter. We can guide you through the legal steps to create the gift letter. Our team can also help you create it to provide a template to make the process seamless for you. So, don’t wait and contact us!