A Proof of Funds Letter will be a doc that you will be sometimes required to provide if you make an offer to a bank/lender.Having your own cash can provide a good POF Letter, on the other hand many new and some seasoned investors will not have enough cash to provide the lenders with a POF letter. Banks want to know that you will close when you say you are going to close. Having someone with enough money to cover the purchase price can even be a PML(private money lender) or a HML (hard money lender)and you can then use their money to prove funds, as long as you can prove that they have the money in some form.
There are fees to use hml and pml monies and can range from 1% to 5% for funding transactions. Writing your own POF letter can be close to being fraud if you are not careful and cannot produce and you may be opening yourself up to investigations.Explaining to the lenders how you are acquiring the pof letter is very helpful and of course having an end buyer only solidify's the deal. This is a summary on POF letters and I will post more video's and articles on this topic, This is just a brief look at what it may take to acquire a proof of funds letter. There are quite a few more ways to obtain these letters if they are being ask for by the lender in the state you are doing business in.
Realtor's will sometimes want a pof letter before you make an offer, so preparing your POF even before you start any process can save time and efforts. Knowing what areas and who to go to for POF letters is a process that you can accomplish by asking the right HML,PML, Investors,Family, Friends and even yourself.
