Strengthen Your Home Purchase Offer with a Proof of Funds Letter

Answer

A proof of funds letter is a simple document from your bank or financial institution confirming you have enough cash available to complete a real estate transaction. Sellers and listing agents often request this letter to ensure your offer is backed by verifiable funds, especially in competitive markets or all‑cash deals.

Typically, a proof of funds letter will include:

• Account holder’s name: Matches the buyer or entity on the purchase contract.
• Account type: Checking, savings, money market or brokerage.
• Current balance: Available liquid funds, usually reflecting at least the down payment and closing costs.
• Institution letterhead: Includes bank contact information and a signature or stamp of an authorized representative.
• Date of issue: Most letters remain valid for 30–60 days to reflect real‑time balances.

Here’s how a proof of funds letter works in practice:

• For all‑cash offers, sellers rely on these letters instead of mortgage pre‑approvals to verify you can close without financing delays.
• When you’re financing, you may need the letter to demonstrate your down payment reserves in addition to a lender’s pre‑approval.
• Agents use the letter to sort through multiple offers quickly, giving priority to buyers who can close on time.

To obtain your letter, contact your bank or brokerage where the funds are held. Provide your loan officer or branch manager with the exact amount you wish to document. Most institutions will issue the letter within a business day or two, sometimes for a nominal fee.

While a proof of funds letter adds credibility, remember each seller and lender may have unique requirements. Buyers are recommended to verify format and content with their real estate agent or underwriter before submission. It’s advisable to consult a licensed lender to ensure your letter meets all transactional guidelines.