The Unvarnished Truth About Proof of Funds: What Lenders Actually Accept

By Taimour Zaman, Founder, AltFunds Global

Let’s cut through the noise. You’ve found a property, your offer is accepted, and now your mortgage broker asks for “Proof of Funds.” Your heart might skip a beat. What exactly passes muster? Is a printed bank statement enough? Will a letter from a friend work? From my desk, where I witness deals succeed and fail on this single point, let me give you the straight talk you won’t find in a Google search.

Lenders aren’t just checking a box; they’re conducting a forensic inquiry into your financial credibility. They need to see the genuine, unencumbered capital required for the down payment and closing costs. Here’s what they accept, and more importantly, what they don’t.

The Gold Standard: What They Accept Without a Fuss

1. Recent Bank or Brokerage Statements: This is the most straightforward evidence. The statement must be recent (typically within the last 30–90 days), clearly display your name and account number, and show the necessary funds. Large, recent deposits will be scrutinized; therefore, be prepared to provide documentation to support them.
2. A Verifiable POF Letter from a Licensed Institution: A letter on official bank letterhead, signed by an officer, confirming the account holder’s name, the date, and the available balance. Crucially, it must include the bank’s contact information for verification. Lenders will call to confirm its authenticity.
3. Sale Proceeds from a Property: A confirmed sale agreement for a property you are selling, alongside a statement showing the expected equity release, is a powerful and accepted form of POF.

The Grey Areas: Proceed with Caution

1. Gifted Funds: Lenders often accept these, but with strict conditions. You will need a signed gift letter from the donor (confirming the relationship and that repayment is not expected) and evidence showing the donor has the funds to give (their own bank statements).
2. Lines of Credit: Some lenders may accept a POF based on an available line of credit, but this is less common for a mortgage down payment. It signals you’re borrowing your deposit, which increases your risk profile.

The Instant Rejects: What They Toss in the Trash

1. “Purchased” POF Letters from Online Providers: As I’ve stated before, this is financial suicide. Any document that cannot be directly verified with a legitimate, regulated financial institution is considered fraudulent. Full stop.
2. Cryptocurrency Holdings: While this is evolving, most traditional lenders still view crypto as a highly volatile asset. A screenshot of your crypto wallet is almost universally unacceptable as a primary POF for a mortgage.
3. Unverifiable or “Blurred” Statements: Sending a document with key details obscured “for privacy” is an instant red flag. Transparency is non-negotiable.

The Bottom Line

A Proof of Funds isn’t just a piece of paper; it’s a testament to your financial readiness. Lenders accept evidence that is transparent, verifiable, and sourced from the regulated financial mainstream. If your source of funds feels complicated, obscure, or too good to be true, it probably is. Your first call shouldn’t be to a mysterious online provider; it should be to a trusted financial advisor who can help you build a legitimate, defensible financial profile. In the world of high-stakes finance, authenticity is the only currency that never loses its value.

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Disclaimer:

The information provided in this article is for general informational and educational purposes only. It does not constitute financial, legal, or investment advice, nor does it represent a solicitation, offer, or recommendation to buy or sell any financial instruments.

AltFunds Global AFG AG (“AFG”) is not a bank, broker-dealer, or asset manager. All services are provided on a consulting and educational basis only. Any references to investment strategies, structured finance, or alternative capital programs are provided for illustrative purposes and may not be suitable for all readers.

AFG operates under Swiss law and aligns its communications with the principles set out by the Swiss Financial Market Supervisory Authority (FINMA). However, the content herein has not been reviewed or approved by FINMA or any other regulator.

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