Key Takeaways
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A proof of funds letter verifies you have enough liquid assets to cover a home purchase.
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You’ll need it when submitting cash offers or verifying funds during the mortgage process.
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Only liquid assets qualify—checking, savings, and liquidated investment funds are the most common.
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POF letters and preapproval letters serve different roles but work best when used together.
When preparing to purchase a home, it’s crucial to demonstrate that you’re financially ready. That’s where a proof of funds letter for a mortgage or cash offer comes into play. Whether you’re working with a lender or submitting a competitive offer directly to a seller, a proof of funds letter confirms you have enough liquid assets for a down payment, closing costs, or even a full cash purchase. This document reassures sellers and real estate agents that you’re a serious buyer who can close on time.
What Is a Proof of Funds (POF) Letter?
A proof of funds letter is an official document from your bank, credit union, or financial institution verifying that you have the necessary funds for a real estate transaction. These funds must be readily available, meaning they can be accessed immediately for closing.
Here’s what a POF letter typically covers:
- Total amount available
- Type of account
- Date and issuing institution
- Account holder’s name
The letter is often required when making a cash offer, but it’s also useful during the mortgage process when lenders verify that you can cover out-of-pocket expenses.
When Do You Need a Proof of Funds Letter?
You’ll likely need a POF letter in any of the following scenarios:
| Situation | Why It’s Needed |
| Making a cash offer | Proves you can pay the full price without financing |
| Seller or listing agent requests it | Adds credibility to your offer |
| Applying for a mortgage | Confirms you can cover the down payment and closing costs |
| Buying without a real estate agent | Helps protect your transaction with independent sellers |
Even if not required, having a proof of funds letter ready can strengthen your position in a competitive market.
What Qualifies as Proof of Funds?
To be accepted, the funds must be liquid—in other words, available without delay. Below are examples of acceptable and unacceptable proof sources:
| Acceptable Funds | Typically Not Accepted |
| Checking or savings accounts | Unliquidated retirement or brokerage accounts |
| Liquidated investment funds | Real estate equity (unsold) |
| Cash gifts with documentation | Collectibles or personal assets |
| Proceeds from a home sale | Cryptocurrency without verified transfer |
Some accounts, like 401(k)s, may be used if the funds are already withdrawn or documentation shows clear access.
How Does a Proof of Funds Letter Differ from a Preapproval Letter?
While both documents help strengthen your offer, they serve different purposes:
| Document | Purpose |
| Preapproval Letter | Confirms how much a lender is willing to let you borrow |
| Proof of Funds | Verifies your available cash to complete the transaction |
How to Get a Proof of Funds Letter
Here’s how to request and prepare your letter:
- Consolidate your funds: If your assets are spread across accounts, consider moving them to one to simplify documentation.
- Request the letter: Contact your bank or credit union. Most institutions allow in-person, online, or phone requests.
- Receive the document: Turnaround time is usually 1–3 business days.
- Share the letter: Provide the POF letter to your real estate agent, lender, or directly to the seller when submitting offers.
Strengthen Your Offer with a Proof of Funds Letter
In today’s competitive real estate market, having a proof of funds letter ready can make the difference between winning and losing your dream home. It not only confirms your financial readiness but also builds trust with sellers and lenders.
At Loan Pronto, we work closely with buyers to ensure all essential documents—including your proof of funds—are in place early in the process. Whether you’re submitting a cash offer or securing a mortgage, our team can help you move forward with confidence and clarity. Reach out today to get preapproved and secure the documents you need to stand out.
FAQs: Proof of Funds Letter
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