Proof of funds

Definition

Documents showing that the down payment and closing money exist, where it came from, and how long it has been in your accounts. Lenders usually ask for recent statements, often covering 90 days, and want to trace every large deposit. An unexplained deposit, such as a transfer from a relative or the sale of an asset, needs paperwork: a gift letter, a sales contract, a statement from the source account. Example: a $20,000 deposit last month has to be tied to its source, or the lender may not count it toward the down payment. Prepare statements before the offer, not during the financing deadline.