When funds are gifted for a purchase, which declaration should be obtained?

• A. Deed of trust
• B. Gifted Deposit Declaration
• C. Source of funds declaration
• D. Mortgage declaration

Answer: (B)

The main idea here is to prove that funds used as a deposit are a genuine gift, not money that must be repaid or tied to the property in another way. When a deposit is gifted, lenders want clear evidence that there is no loan arrangement or expectation of repayment, and that the money comes from a legitimate source. A Gifted Deposit Declaration does exactly this: it states who is giving the gift, who is receiving it, the exact amount, the date it was gifted, and that the donor does not require repayment. It may also confirm that the funds originated from the donor’s own savings or assets and that there are no conditions attached to the gift. This declaration is typically sworn or witnessed and is provided as part of the conveyancing process to satisfy lender anti-money laundering and funding checks.

A Deed of Trust records ownership or entitlement in the property, not the nature of the funds used for the deposit. A Source of Funds declaration can be used to detail where the money came from, but the specific Gifted Deposit Declaration is the formal document used to confirm the funds are a gift for the purchase. A Mortgage declaration isn’t a recognized standard document for this purpose.