A proof of funds letter is a document showing a potential buyer that a real estate investor has the funds that they need to close the sale. This letter often contains information from the buyer’s loan provider as well as information about their company.
These letters are standard practice for real estate investment purchases. Real estate investors should know the process of handling the proof of funds letter inside now.
This is what real estate investors should know about a proof of funds letter.
Why A Funds Proof Letter Is Important
The current housing market is going through some major changes. Even the White House has stepped in to address some of the issues impacting the housing market. With such a competitive market, sellers have started to require proof of funds letters to ensure sails will go by smoothly.
When Should I Get A Proof Of Funds Letter?
Real estate investors typically obtain their proof of funds letter before submitting an offer for a property. This allows your hard money lender to underwrite the loan as well as ensure that funds are available for the purchase. This also shows the seller that you have all of your financial ducks in a row and you’re ready to close out the purchase.
How Do I Get a Funds Proof Letter?
The process for obtaining a proof of funds letter is very straightforward.
Your first step is to reach out to your hard money lender of choice. You should find a hard money lender that has experience working with real estate investors, favorable rates, and the professionalism that you can rely on. You will then have to submit an application which may or may not include a credit check.
Your hard money lender will then be able to issue you a proof of funds letter so that you can proceed with your real estate purchase.
Property Specific Funds Proof Letters
A property specific proof of funds letter is targeted for a specific piece of real estate. This allows the seller to have more confidence and your ability to close out the purchase and gives you financial clarity for the terms and conditions of your funding.
Get The Financial Services You Need Today
You need a financial services provider with experience working with real estate investors. IMCMoney has been working with real estate investors for years and their experienced financial team can work with you to handle everything from obtaining a proof of funds letter to a hard money loan.
Reach out to IMCMoney today to learn more!