3. Collect Documents: Pre-Qualification Letter and Proof of Funds

You will need to collect the pre-qualification letter and bank statement for proof of funds. These are important and should not be overlooked. Ask how they plan to fund the loan. You discovered some of this information when you initially screened them, but now you need to dig deeper and get complete info.

A pre-qualification letter is the minimum, but having a pre-approval letter holds more weight. It shows that the buyers serious. They’ve gone further in the financing approval process. Ensure they are working with a good mortgage lender who is reputable, trustworthy, and closes loans on time.

The official letter must include the following items:

● Bank name

● Bank logo or brand

● Bank physical address

● Bank representative’s name & signature

● Bank rep’s phone number

● Approved purchase amount

● Buyer’s name(s)

● Dated within the last 30 days

Proof of Funds, or POF, is a bank statement or a similar document showing the buyer has liquid assets available for the down payment and closing costs. It could be a monthly statement from a CD, stocks, or retirement account. It could be a gifting letter or a valuation of assets. Or POF could be a letter written by a bank representative to verify funds on deposit. But typically POF is a bank statement.

Items that must be on an authentic bank statement include:

● Bank name

● Bank logo or brand

● Buyer’s name(s) on account

● Account number (with last 4 digits visible)

● Total account balance

● Dated within the last 30 days [Pause]

Remember this is a highly sensitive document and you must protect the privacy of your client. For confidentiality, the buyers should cross off all but the last 4 numbers of the account number. The last 4 numbers are important to verify that account number.