“Can you show me proof of funds?”
This request stops many buyers in their tracks.
Many lose dream homes by handling this poorly. I’ve witnessed the disappointment repeatedly since 2015.
In this guide, I’ll show you exactly what estate agents need. You’ll learn how to prepare perfect proof of funds.
No confusion.
No delays.
Just clear steps to prove you’re a serious buyer.
Understanding Proof of Funds Requirements
First of all let’s clarify something…
What is Proof of Funds?
When buying property in the UK, proof of funds is documentation that verifies you have the money available to complete the purchase. This is required to:
- Demonstrate you can afford the property
- Satisfy anti-money laundering (AML) regulations
- Show sellers you’re a serious buyer
These are usually bank statements that show your savings and a mortgage agreement. They prove you have enough money for the deposit and other costs.
Most proof documents only last for three months before you need new ones.
Why Estate Agents Ask for Proof
Time-wasters cause big problems in house sales.
Agents must check where your money comes from by law. This stops bad actors from using houses to hide dirty money. Having your proof ready helps your purchase go faster.
Sellers also feel safer when they see your proof.
Who Needs to See Your Proof
Cash house buyers face the most checking.
The estate agent needs proof when you make an offer. Your solicitor will also need to see it before starting paperwork. Also, auction houses want proof before they even let you bid.
Remember these simple points:
- Keep your proof of funds documents updated
- Have them ready when making offer as you may need to show them multiple times
- Different professionals might need different papers
Being prepared makes buying a house much easier.
Acceptable Types of Proof of Funds Documentation
When buying a house, you need to prove you have the money. Here are the documents that work best.
Bank Statements
Bank statements are the most common way to show your money.
They need to show your name, account number, bank logo, and how much money you have. Most agents want to see the last three months of statements to make sure your money isn’t just sitting there temporarily. They will want to know where big deposits came from.
Printouts from online banking might not be good enough.
You’ll need official statements with all the proper bank information. Some agents want statements stamped by your bank, but this is becoming less common now.
AIP or DIP
A Mortgage Agreement in Principle (AIP) or Decision in Principle (DIP) is a document from a lender that shows how much you are likley allowed to borrow.
Unless you are buying a house for cash you will likely need this to have your offer accepted.
It includes your name, the lender’s details, the potential loan amount, and usually has a reference number. Most AIPs/DIPs are valid for between 60 and 90 days, giving you time to find a property. They show sellers and estate agents that you’ve been pre-approved by a lender.
Getting an AIP/DIP involves a credit check, which may be a “soft” check that doesn’t affect your credit score, or a “hard” check that does leave a mark on your credit history.
The document itself must come directly from the mortgage lender or broker. But screenshots or emails generally aren’t accepted as valid proof.
Remember that an AIP/DIP is not a guarantee of a mortgage offer – the lender will still need to do a full assessment when you apply for the actual mortgage.
Savings and Investment Statements
Money in savings counts toward your house deposit.
ISA statements, stock accounts, and even pension papers can all help prove you have enough funds. The papers need to show current values, your name, and that you can get the money when needed for your house.
Investment accounts might need extra explanation.
If you’re using stocks as proof of funds, you may need a letter from your broker confirming how quickly you can turn these into cash.
Property Sale Evidence
Selling another house to buy your new one?
Papers from your solicitor show exactly how much money you’ll get from your sale. These documents prove to sellers that your current house sale will give you enough money for your new purchase.
Your solicitor can write an official letter explaining when you’ll get the money.
Gift Letters and Family Loans
Parents helping with your deposit need to write a gift letter.
This letter must clearly say the money doesn’t need to be paid back. Banks need this because they want to know you won’t have an extra loan to repay along with your mortgage. The letter should show the amount, who it’s from, and their signature.
Family loans need proper paperwork.
Money from family that you will pay back must be properly recorded. Mortgage lenders will count these loans when figuring out how much you can borrow.
For more information about papers you’ll need throughout the selling process, check out what you need to sell your house for a complete guide.
Preparing To Send Proof of Funds
Getting your money papers ready helps speed up your house purchase. Here’s how to do it right.
Create one complete money file.
Put all your money papers in one folder with clear labels. This helps house sellers check your funds quickly without asking for more stuff. Add a simple cover page that lists what’s in your folder so people can find things easily.
Don’t just show your deposit money.
Remember to include papers for all costs like solicitor fees and moving expenses.
Cover up private details that aren’t needed.
Your spending history and account numbers should be hidden to keep you safe. Use a black marker on paper or editing tools on digital copies. Leave only your name, bank name, dates, and how much money you have.
Never hide the important parts.
The final money amount must stay clear to read. Many people make mistakes by covering too much, which makes their proof get rejected.
Big money deposits need explanation letters.
If you recently got a large sum of money, you need to explain where it came from. A simple letter explaining that it was a work bonus or gift from your parents can prevent delays.
Investment accounts need extra papers.
If your money is in stocks or foreign accounts, include a note explaining when you’ll turn these into cash for your house purchase.
Keep your money information safe.
Never send financial papers by regular email. Ask your estate agent about their secure way to send documents or use password-protected files. Good professionals have special systems to keep your information safe.
Ask who will see your financial information. Under data protection laws, companies must only collect what they actually need.
You can also ask for your papers to be deleted when they’re done with them.
If you’re buying without a bank loan, check out how buying a house with cash works to learn about the simpler process.
Secure Methods for Sending Proof of Funds
When buying a home, you’ll need to show you have enough money. There are several safe ways to send this important information.
Always confirm your documents were received.
Call your agent the day after sending important papers. This simple step prevents delays in your home purchase.
Email can be risky for sending money details.
Many people do this for convenience, but it’s not best practice.
Use a secure email service that has special protection. These services scramble your information so only the right person can see it. Many banks offer their own secure messaging systems for sending money proof.
Encrypted files add an extra layer of safety. You can lock your documents with a password and send them separately. Tell the password to the agent over the phone, not in the same email.
Sometimes the old ways work best.
Registered post gives you proof that your documents reached the right place. You’ll get a tracking number and signature when delivered. This method takes longer but can feel safer for many people.
Dropping off your papers in person is the most secure option. You can hand your documents directly to your agent or solictor. Always ask for a receipt if you use this route as proof they got your documents.
Many estate agent companies have their own special websites.
These secure portals are made just for sending important documents. They use strong protection to keep your information safe from hackers. Your agent will give you login details and steps to follow.
The portal will show if your documents were received. This gives you peace of mind that your information arrived safely.
Legal and Regulatory Considerations
Selling and buying your home can be simple if you know the rules. I’ve guided many sellers through this journey successfully.
Understanding Legal Protections
Estate agents must check where money comes from before any sale. Don’t worry if they ask for bank statements – this is normal.
But you should keep your personal details safe.
You can say no if someone asks for papers that you don’t think are required. Check with your solicitor first as there may be an alternative.
Indemnity insurance can protect you from legal problems that might come up when buying.
Your information must be kept safe by law and since tighter GDPR rules. Estate agents have to protect your details during the whole selling process.
What You Need to Prepare
Having the right papers makes selling faster. Always prepare your important documents early.
Get these ready:
- Photo ID (passport or driving licence)
- Proof of address (recent bills)
- Bank statements (last three months)
- Mortgage details
Common Challenges and Solutions
Showing you have enough money to buy a house can be tricky.
Money problems can pop up when you’re trying to buy a home. Sellers need to know your money is real before they agree to sell to you. Having the right papers ready makes everything easier.
Sometimes the normal bank statement isn’t enough.
You can use other papers when you don’t have the usual ones. Your home loan helper can suggest different ways to show your money. A letter from your money advisor might work instead of bank papers.
You can mix different papers to show all your money.
Short-term loans help when your cash is stuck somewhere else. These loans cover the gap until your real money arrives. Ask your bank about quick loans that can help.
Old money papers can cause delays.
Sellers want to see papers from the last month. Banks check your money history and need new information. Using old papers can make the seller pick someone else instead of you.
Money changes need to be explained.
New jobs, big deposits, or money gifts all need explaining. Keep papers that show where your money came from. Being honest about money changes stops problems later.
Using money from other countries takes extra work.
Foreign accounts need to be translated to English. The value of money from other countries can change every day. Keep extra money ready in case your foreign money loses value.
Money from overseas gets checked more carefully.
Banks have strict rules about foreign money. They need to know exactly where the money came from. Start this process early to avoid delays.
Sending your proof of funds at the right time is important.
Your papers should be dated close to when you make your offer. Banks can’t sign or stamp papers on weekends or holidays, so plan ahead. Having your proof ready before finding a house puts you ahead of other buyers.
Quick action helps in hot markets.
Online banking documents can work until signed papers arrive. Having your proof of funds ready gives you an edge when time between exchange and completion is tight.
Send Proof of Funds for Special Circumstances
Showing you have enough money gets tricky in special situations.
First-time Buyers with Gifted Deposits
Parents often help with first home purchases.
A gift letter must state the money is a gift, not a loan. It needs to show the amount, who’s giving it, and confirm it doesn’t need repayment. Banks have specific gift letter forms that must be filled out exactly right.
Parents might need to prove where their gift money came from. Bank statements help show the money is legitimate. Some banks require parents’ ID and address proof too.
Property Chain Situations
Buying and selling at the same time is complicated.
When you need to sell your current home to buy a new one, your solicitor will create papers showing how money will move between sales. This helps everyone understand your funds will come from your home sale.
A sale agreement from your buyer proves money will be available. Your solicitor might create a package showing all connected sales in the buying and selling a house process.
Business Purchases
Using company money requires extra documentation.
Business statements can prove available funds. A letter from your business accountant helps confirm the money is ready.
When using company money for personal homes, meeting notes showing approval are needed. Tax information should be included to prove everything is legal.
Auction Purchases
Auction houses have strict money rules.
Before bidding, you must prove you have the deposit (usually 10%). This proof needs to be very recent, typically from the last week.
After winning, you usually have 28 days to pay the rest. Your solicitor must provide proof that all remaining money is available. Auction houses often have special bank forms to verify your funds.
How Property Buyers Today Simplify the Proof of Funds Process
If you need to sell your home to buy your next one it can be tricky if someone pulls out of the chain.
We’ve helped many people to sell their house quickly for cash to help them buy their next home.
Here are some of the reasons why so many people work with us…
Speed
Most house sales take months, but we can buy your property in as little as 7 days.
This quick process is perfect if you need to move soon or want to avoid being stuck in a long chain of buyers and sellers. We have the cash on hand so don’t need to wait for mortgages or a chain to collapse.
Guaranteed Sale
Did you know 1 in 3 sales fall through on the open market?
We know how frustrating it is to get 6 months into a process and have a buyer pull out.
When we give you the final price for your house, that’s the amount you’ll get. Guaranteed!
No Costs
You won’t face any costs with us.
We handle all the expenses involved in buying your property, including legal fees and surveys. You get cash in your bank when the sale is complete, and there are no surprise estate agent commissions to worry about.
No Stress Or Hassle
Our team supports you through the whole selling process.
We keep you updated about what’s happening and answer any questions quickly. You’ll always understand what’s going on with your sale and what happens next.
Free Property Valuation
Our property experts will value your house at no cost to you.
They look carefully at your property and check local market prices to give you an accurate figure. This professional service comes with no obligations.
No Viewings Required
Forget about cleaning and tidying for viewings.
We don’t need multiple visits or open houses to make our offer. This means no strangers walking through your home, and no disruption to your daily life.
All Properties Welcome
Whether your house needs work or is in perfect condition, we’ll buy it.
We have experience with all types of properties and conditions. This means you can sell your house to us no matter what state it’s in.
Professional Legal Service
Our expert team manages all the legal requirements for you.
We work with experienced property lawyers who make sure everything runs smoothly, and put your property at the top of their list. This gives you peace of mind that your sale is being handled properly from start to finish.
