Throughout the home purchasing process, you may be asked to provide proof of funds. What does this mean? It refers to something tangible that can be offered as evidence that you, the buyer, can follow through with the purchase. It’s a type of validation that you have the money available at your disposal to complete the home purchase. It can come in a couple of different forms like a certified letter from your financial institution or an official document from a 3rd party providing an assurance that you have the funds needed at your disposal. This letter or documentation provides the seller with a piece of mind and as a result, they may be more willing to accept your offer. Keep in mind, this is different than a pre-approval from a bank. It would typically be utilized in a “cash purchase” or for your down payment or closing costs if requested.
Check out this article from realtor.com to learn more information about proof of funds.