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What Qualifies as Proof of Funds?

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You may be wondering what proof of funds is and which documents are accepted when buying a property.

Solicitors, estate agents and auctioneers all require evidence that you have the necessary funds to complete the purchase. Property Saviour can provide insight into what you’ll need to do.

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What is “Proof of Funds” When Buying a House?

Proof of funds is necessary when buying a property. Agents, solicitors, or auctioneers will ask for evidence of the buyer’s financial capacity before proceeding with the sale.

What Qualifies?

Buying a property requires proof of funds to get started. This is an essential part of the process alongside:

  • Bank statements (preferably from the last month or earlier if feasible) representing the full cash amount or the deposit, typically at a minimum of 15%.
  • A mortgage agreement or decision in principle (AIP or DIP) combined with the deposit, amounting to 100% of the agreed sale price.
  • Adequate funds to cover additional costs such as Stamp Duty Land Tax (SDLT), legal fees, and estate agency fees.
  • Documentation confirming the Help to Buy finance grant.
  • Personal accounts, especially if you are self-employed or manage your own business.
  • Evidence of recently acquired funds as a gift or through probate.
  • Verification of an ongoing property sale that meets the required amount and has a definitive completion date.
  • Proof of the source of finance, particularly for overseas buyers.
  • Verification of dividends received or the sale of shares.
  • Official information related to a pension payout.
  • Documentation providing evidence of a cash prize or lottery win.
What Qualifies As Proof Of Funds
Proof of the source of finance, particularly for overseas buyers.

When Do You Need to Show Proof of Funds?

Before you make any type of offer on a property, we recommend having proof of funds prepared. An estate agent will be unable to accept an offer from you without a mortgage in principle or evidence that you have immediate access to the full amount of cash required upfront.

If your offer gets accepted, your solicitor will need to see that you have the financial means to purchase the property. You’ll usually require proof of funds for a property purchase at auction as well.

Auctioneers also commonly request evidence upon registration to crack down on fraud and money laundering. This means you’ll need the relevant documentation before you can bid on auction property.

Verifying Proof of Funds

Individuals providing proof of funds or proof of income for a mortgage must undergo document verification. However, this manual process can be time-consuming. To streamline operations and improve efficiency, many mortgage lenders are digitizing their processes.

This involves replacing traditional workflows with seamless digital operations that leverage modern technology. By embracing digital transformation and adopting a robust digital mindset, businesses can stay agile and exceed expectations.

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  • We always provide proof of funds with every formal offer issued.
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