Proof of Funds (POF)

Introduction to
Proof of Funds (POF)

Proof of Funds (POF) is a document or a set of documents that confirms a person or business has enough money available to complete a specific transaction. It usually includes things like bank statements, security statements, or custody statements. These documents show that the funds are real, accessible, and legally obtained, giving confidence to the other party in the deal.

Proof of Funds (POF) is a document or set of documents that verify an individual or entity has sufficient funds available for a specific transaction. Typically, POF includes bank statements, security statements, or custody statements, demonstrating that the funds required for a transaction are both accessible and legitimate.

Key Points

Proof of Funds (POF) is a document used to confirm that sufficient money is available to complete a transaction. It is most commonly required for large purchases, such as buying a home. Typical POF documents include bank statements, security statements, and custody statements. These documents must clearly show the bank’s name and address, the total balance, and include signatures from authorized bank personnel. When applying for a mortgage, both Proof of Funds and Proof of Deposit are usually required to verify financial readiness and secure the loan.

Why Proof of Funds is Important

When making large purchases—like buying a home—Proof of Funds (POF) is often required by sellers or lenders. It serves as confirmation that the buyer has the money available and legally accessible to complete the transaction. Typically verified through a bank, POF provides assurance that the buyer can cover essential costs, such as the down payment and closing fees, helping build trust and move the deal forward smoothly.

What Information is Needed in a Proof of Funds Document?

Bank’s Name and Address: Identifies the financial institution holding the funds.
Official Bank Statement: Provides a detailed view of the available funds.
Account Balances: Includes balances in checking, savings, or other relevant accounts.
Total Balance: Shows the total amount of funds available for the transaction.
Authorized Signature: Must be signed by an authorized bank representative.
Multiple Accounts: If funds are spread across different accounts, each must have its own proof.
Consolidation Tip: It may be easier to move funds into a single account to simplify documentation.

If funds are distributed across multiple accounts, proof is needed for all of them. It might be simpler to consolidate funds into a single account for ease of documentation.

Importance of POF and the need to keep it secure

Keep It Safe: Store your Proof of Funds (POF) document securely, as it contains sensitive financial details.
Be Cautious: Only share the document when absolutely necessary.
Trusted Parties Only: Ensure you’re providing it to reputable and trusted individuals or institutions, such as a verified lender, real estate agent, or legal advisor. This reduces the Risk Mitigation in Trade Financ