Buyer Proof of Funds
If you are planning to pay cash for your new home, sellers will want a proof-of funds as part of any offer submission. Proof of funds can be any document from an authorized financial institution (bank, retirement accounts, investment accounts, trusts) that can show that within the last 30 days you had sufficient funds to complete a cash transaction for the property you are looking to buy. If the transaction is going to close in more than 30 days, the seller may require an updated proof of funds prior to close to show that you still have available funds to proceed with a closing. Usually a PDF monthly or quarterly statement from your financial institution, that shows your name and address on it (that matches the contract) as well as the current available balance is sufficient to show your proof of funds.
Get a Mortgage Pre-Approval
An important ingredient in a successful home search is knowing how much you can afford. You don’t want to fall in love with a property only to find out it’s outside your price range. IF you are going to have a mortgage on your home as most buyers do, then a mortgage pre-approval from a qualified lender is imperative before you start looking at homes.
This is a document from your bank or other lender stating how much of a mortgage they are willing to give you. There are two advantages to getting this pre-approval:
- It gives you the peace-of-mind of knowing you can afford homes you view on the market, and won’t have problems arranging financing.
- It’s a sign to sellers that you are a serious, prepared buyer – which gives you the edge when making an offer.
You can arrange for a Mortgage Pre-Approval with your bank or other lender, or by working with a good mortgage broker. I’m well-connected in the local real estate scene, so if you want me to recommend a reputable broker or lender, please contact me.
How Much Home Can You Afford?
Banks and lenders use specific criteria to determine how much of a mortgage they’re willing to offer you. They look at your income, expenses, credit history and employment status, as well as the down payment you plan to make on a home. It may seem like a scary process, but it is actually straightforward. You can usually get a Mortgage Pre-Approval in a day. You’ll be glad that you did.
By knowing what you can afford, you can confidently shop within that price range. For example, if you qualify for a $250,000 mortgage, and you have another $100,000 available as a down payment, you can look for homes in the $350,000 range.
Have questions about arranging financing? Please submit the form below or call or email me.