What Are Proof of Funds?

Whether you're buying a property outright with cash or using a mortgage, proving you have the funds readily available to cover the cost of the home, like a down payment and closing costs, is often necessary to complete the transaction. Proof of funds (POF) are financial documents, like bank statements, that can be used to verify you meet financial obligations and can complete the purchase. 

Proof of funds is just one of many pieces of documentation you’ll provide when making a home purchase. We’ll cover how to show proof of funds, how to get proof of funds, and why they are important.

Why do I need to show proof of funds?

Proof of funds facilitate a smooth real estate transaction. Without enough liquid assets to complete the transaction, the deal could fall through. Here's why you need to show proof of funds when buying a house:

Reassure the seller 

When sellers see proof of funds, they gain confidence that you have the financial capacity to close the deal, which makes your offer more appealing, especially in a competitive market.

Verify your credibility 

For cash buyers, proof of funds show you have the money available and eliminates doubts about your ability to follow through on the purchase. It’s also an important step for buyers obtaining a mortgage. Lenders often require proof of funds to ensure you can cover associated costs like a mortgage payment, down payment and closing fees.

Speed up the process 

Sellers (and their agents) often prefer buyers who provide proof of funds early in the process, because it helps minimize uncertainty and avoid delays.

How to show proof of funds

Showing proof of funds typically involves presenting a document or statement from your financial institution. Here are some acceptable ways to show proof of funds:

• Bank statements: A basic financial document from your checking or savings account that shows your current account balance.
• Account verification letter: A letter from your bank or financial institution, verifying the funds available in your account.
• Investment account statements: Documentation from brokerage accounts holding liquid assets like stocks, bonds, or mutual funds.

• Certified financial statements: If your funds come from structured financial holdings (such as a trust), statements certified by a financial advisor or accountant may be required.
• Gift letters: A signed letter from a donor confirming that funds given for a down payment or closing costs are a gift and not a loan.

Keep in mind that sellers and lenders might ask for recent statements. Be prepared to provide documents from the last 30-90 days.

When to show proof of funds

You will likely need to provide proof of funds for a house when getting pre-approved for a mortgage and when making an offer. Sometimes, you may need to provide proof of funds within 24-48 hours of your offer being accepted. The timing of presenting proof of funds will depend on your role in the homebuying process and your method of purchase. Here's a breakdown of when you’ll need it:

During the mortgage pre-approval process

When applying for pre-approval, lenders typically ask for proof of funds early on. You’ll need to show that you can cover the down payment, closing costs, and any reserves required for loan approval. Having this ready upfront helps speed up the process.

With your offer letter

When you submit an offer, sellers often expect proof of funds to be included. This gives them confidence that you’re financially prepared to follow through, whether you’re buying with cash or financing with a mortgage. In competitive markets, providing proof of funds alongside your offer can strengthen your position.

Shortly after your offer is accepted

Sometimes sellers or their agents may request updated proof of funds within 24–48 hours of accepting your offer. This step reassures them that your finances are in order and helps keep the transaction moving forward without delays.

How to get a proof of funds letter

Your bank or financial institution should be able to provide you with a proof of funds letter. Here’s how to navigate the process step-by-step:

1. Contact your bank or financial institution

Start by reaching out to your bank, credit union, or investment advisor. Let them know you need a formal "proof of funds" letter for a specific amount to verify your financial resources. Most banks have a standard procedure for issuing this document and can guide you through it.

2. Provide necessary details

Be sure to clearly communicate the purpose of the letter, such as purchasing a home, so the document includes all relevant information. This typically covers the account holder's name, bank contact details, and the total amount available in your accounts.

3. Request for timeliness

Because real estate transactions often move quickly, make sure your bank understands you need the letter prepared promptly. Requesting the document within a specific timeframe (usually within a few days) helps keep your purchase process on track.

4. Store it securely

After receiving your proof of funds letter, carefully review it for accuracy. Since the letter contains sensitive financial information, store it securely to protect your privacy, and have it ready to share with sellers or lenders as needed.

Key takeaways 

Whether you’re making an offer on a house or securing a mortgage, proof of funds are a necessary piece of documentation. Proof of funds show sellers and lenders that you have enough money or assets to finalize the transaction, whether you’re buying with cash or financing the home purchase.

*Zillow Home Loans; an equal housing lender. NMLS #10287