Most likely you work for a bank or other savings institution if you have been asked to write a proof of funds letter.If you are holding money or other valuable assets on behalf of someone, a private individual could be asked to provide a proof of funds letter.The proof of funds letter is used to let someone who is offering a property for sale that your client has money available in a specified amount that will allow him or her to complete the transaction.The proof of funds letter needs to meet certain expectations.
Step 1: Look at the client's accounts.
If you are being asked to provide a proof of funds letter, you will most likely be working at a bank, credit union, or other financial institution.The first thing you need to do is verify that the client has the funds.To find this information, you will need to check your bank's records.
Step 2: Clarify the account that should be considered.
You may need to verify more than one account depending on the needs of the client.You should check with the client to find out which accounts may be considered.The client may have savings, checking, money market or other accounts with your institution, but may only want to consider the funds in one account.You should know which accounts the client wants you to verify.
Step 3: Determine the amount of money that needs to be verified.
A proof of funds letter should be more than just a statement of the current account balance.The level of funding that will be represented in the proof of funds letter should be checked with the client.Limit the language of the letter to that amount.For the client's privacy, you should not give more information than is requested.The client may have over $2 million in one account.The client only needs to verify funds up to $100,000.Your letter should say that the client has at least $100,000.It will serve the purpose, but not reveal too much of the client's information.
Step 4: Use formal stationery.
A proof of funds letter needs to be official.The official stationery of your institution is what you should use.The name and address of the institution should be on this document.If the institution has more than one location, you need to know which one is giving the letter.
Step 5: The date should be provided.
It seems obvious, but it is very important.You should give a statement in the body of the letter as to when the proof of funds verification will take place.The seller can consider the validity of the proof of funds letter if the letter says, "As of October 15, 2016 our client John Smith has access to at least $____ in his account at ABC Bank."If you write the letter on October 15, 2016 but the client doesn't present it until April, the seller may have doubts as to whether the funds are still available.The seller might need a new proof of funds letter.
Step 6: The account holder's name should be specified.
The name of the account holder must be stated in the proof of funds letter.If there is a discrepancy between the name of the individual requesting the letter and the account name, you should speak to the client.The client who is requesting the letter should be given a clear statement in the proof of funds letter.John Smith requests a proof of funds letter and the account is a joint account between him and his wife.The seller can make a determination about whether to proceed with the transaction after reviewing your letter.
Step 7: Mention any restrictions.
A proof of funds letter may be written for a specific purpose.You should specify any limitations within the text of your letter if this is the case.If your client requests a proof of funds letter to attend an auction, your letter will only apply to the client's registration to bid at the auction on November 15, 2016You should contact the bank for more information.
Step 8: You should sign the letter.
The proof of funds letter must be signed by an authorized representative of the institution.If you are not authorized to provide such information but are just drafting the letter, you will need to get the signature of someone who is.
Step 9: Provide the signer's official title.
The official title of the person signing the letter should accompany the signature.It should be obvious that you have the authority to give the information contained in the proof of funds letter.
Step 10: If the client needs the letter to be sworn in.
If the letter meets all the other requirements, a notarized letter will not be required.A signature that is not signed by the seller might be required.The client should be asked if this is a requirement for the transaction.
Step 11: The letter should be given to the client.
A proof of funds letter needs to be completed and delivered quickly if the client is working on a time sensitive transaction.The customer should tell you if the letter should be held at your office or delivered to a specific address.If time is of the essence, the client may ask you to deliver the letter by special messenger or overnight delivery.It is up to you to know what is required.