Proof of Funds letter

Financing, Hard Money Lenders, Private Money
1

Anyone got a proof of funds letter they can show me? I would prefer to have one with all of the financial information viewable if possible. :biggrin

Thanks

2

My banker just writes a very concise letter stating that our company has funds available to purchase the property at XXX address for $XXX. His contact information is on there if the seller or the seller’s Realtor have any questions.

3

I’ve seen a lot of different POF letters and it seems like anything on bank letter head with a banker’s signature and contact information will do the trick.

If you’re trying to come up with your own verbiage, I’d suggest the following:

  1. Try to avoid putting actual dollar amounts on the letter. I’ve found it is better to use statements like “has sufficient funds to purchase” or “has liquidity in excess of ___(min amount)” because it a) protects your privacy, b) gives you flexibility and c) does not provide information that can be used against you during negotiations.

  2. Try to include a positive statement regarding your credit and or good standing with the bank such as “Client is in good standing with the bank and has always paid as agreed”. This obviously will strengthen the overall effectiveness of your letter.

4

Thank you all.

5

May 6, 2007

To Whom It May Concern:

This is to confirm that Joe Smith has been pre-approved for a loan for a single family residential property based on a 70% loan to After Repaired Value appraisal, but with no cash out. The maximum amount the borrower is pre-qualified for is $100,000.00. This pre-qualification is good for 90 days from the above date and is renewable by mutual written consent. Borrower’s credit has been reviewed and we have received a written application.

As always, final loan commitment is subject to the appraised valuation of the property by an appraiser chosen by our firm as well as other considerations.

Thank you for your cooperation.

This is not an approval for a Loan. Approval of the Loan requires that Lender verify the information that the applicant has provided and that the collateral for the Loan (the subject property) will satisfy the lender’s requirements (for example, appraisal, title, survey, condition and insurance)

Sincerely,

6

On every one of our POF letters, my banker only lists our first offer price. He does that so the seller doesn’t see that I’ve been approved for thousands more. Then the negotiations begin. I’ve never been asked for another POF letter showing the higher agreed upon amount.