DO YOU NEED A PRE- APPROVAL OR PROOF OF FUNDS LETTER?
Sellers won’t want to take their property off the market without knowing that the buyers are truly able to afford it. Here’s what buyers need to know about how to get a proof of funds letter, including a free proof of funds letter sample and more.
Is your Realtor asking for proof of funds? What is proof of funds in real estate anyway? When you’re buying a house, a proof of funds letter is a document that proves that a home buyer has enough liquid cash to purchase a home. It’s essential paperwork that all home sellers will want to see, so home buyers shouldn’t feel prepared to make an offer without one.
Who needs a proof of funds letter?
Basically all buyers need to provide a proof of funds letter. Even if you’re getting a mortgage to finance your home purchase, you’ll still need enough money for a down payment (ideally 20% of the price of the house) and closing costs (an additional 3% to 4% of the home’s price).
While lenders will delve deep into your finances to ensure you have the necessary cash on hand to close the deal, home sellers will also want to see that you have these funds set aside. That’s why you provide them with a proof of funds letter, as well as your pre-approval letter from your lenders confirming that they’re willing to loan you the rest of the money you need.
Home buyers who don’t need a mortgage because they’re buying the house in all cash aren’t off the hook, either! They will also need to provide a proof of funds for a cash offer—for a much larger amount, of course.
Proof of funds letter vs. pre-approval letter: What’s the difference?
Keep in mind that a pre-approval letter is by no means proof of funds. Mortgage pre-approval is a commitment from a lender to provide a buyer with a home loan. A proof of funds letter is a completely separate document that shows where you’re keeping the cash you need to bring to the closing table.
Author:Wendy Simpson Phone: 912-297-6829 Dated: August 15th 2022 Views: 198 About Wendy: ...
Michael Harris Team unique combination of knowledge, skills, experience and commitment to service sets apart this group of real estate specialist from all other Realtors in the Golden Isles Area of Sea Island, Saint Simons Island and Brunswick. Because Teams are human systems that make ordinary service-EXTRAORDINARY service.
With interest rates rising and home inventory is declining, you might
"My husband and I recently retired and were looking to find a new home somewhere on the southeast coast. During our on-line research we found Wendy Simpson, at the Michael Harris Team. We scheduled a date to meet with Wendy to look at some potential homes. Wendy showed us more than houses; she spent six hours taking us around Brunswick, St. Simons Island, and Jekyll Island. She said she wanted to show us the beautiful Golden Isles. When we chose to have a new home built, she acted in our best interest in every step of the process. She gave us positive tips and advice, as well as checked on the progress of the construction when we were not able to make the trip to GA from NC. We highly recommend Wendy Simpson, of the Michael Harris Team, to anyone thinking of moving to the Golden Isles area of GA."