Document background
A Gift of Equity Letter For Mortgage is commonly used in New Zealand when a property owner wishes to sell their property to a family member at a price below market value, effectively gifting them a portion of the property's equity. This document is essential for mortgage applications as it provides lenders with formal confirmation that the reduced purchase price represents a genuine gift of equity rather than a loan or other financial arrangement. The letter must comply with New Zealand banking regulations, property law, and anti-money laundering requirements. It typically includes details about the property, the parties involved, the amount of equity being gifted, and explicit confirmation that no repayment is expected. This document is particularly relevant in today's housing market where family members often help each other enter the property market through equity gifts rather than cash contributions.
