When you’re buying a house, there’s a good chance you’ll be asked to provide something called proof of funds. It might not be the first thing on your list when thinking about moving, but it’s a crucial step that helps keep the process smooth and stress-free.
Whether you’re applying for a mortgage or buying outright, estate agents and sellers need to know that you’ve got the money ready. And in a fast-paced market, being able to show that you’re financially prepared can make your offer more attractive and help avoid delays later.
Get expert mortgage guidance from our trusted partners
So, what exactly counts as proof of funds? When do you need it, and how can you get everything lined up before making an offer? Here’s what you need to know.
What is proof of funds when buying a house?
Put simply, proof of funds is evidence that you’ve got the money to buy the property. It reassures everyone involved, from estate agents to solicitors that you’re in a solid position to go ahead with the purchase.
If you’re a cash buyer, you’ll need to show that you can cover the full cost of the home, along with any extra costs like stamp duty and legal fees.
If you’re buying with a mortgage, the focus is usually on your deposit. Lenders and agents will want to see where it’s coming from and that it’s available when needed.
Related: Everything you need to know about tracker mortgages
When do you need to show proof of funds?
You might be asked to show proof of funds at a few different points during your home-buying journey, and often earlier than people expect.
Here’s when it usually comes up:
- When you’re ready to make an offer – estate agents will often request it before passing your offer to the seller
- When you apply for a mortgage – lenders will want to see your deposit is ready and traceable
- Before contracts are exchanged – solicitors need to confirm everything is in place before making it official
Getting your documents and funds sorted early on can speed things up and help you avoid any last-minute surprises.
Related: Surprising things that affect your credit score
What counts as proof of funds for a home purchase?
There’s more than one way to show you’ve got the funds available. What’s accepted depends on how you’re buying the property, whether with cash, a mortgage deposit, or a combination of sources.
Here are the most common types:
Bank statements
This is the most straightforward option. Recent bank statements showing your name, account number, and available balance are typically enough. Lenders usually ask for the past three months.
Savings or ISA accounts
If your deposit is sitting in a savings account or ISA, a statement showing the current balance can be used as proof.
Investment accounts
Using funds from shares or bonds? You’ll need to provide up-to-date investment statements, and sometimes proof that the money is being withdrawn.
Proceeds from a sale
Selling another property or asset to fund your purchase? A completion statement from your solicitor confirming the sale and the funds received will usually do the trick.
Gifted deposits
If any part or the entire deposit has been gifted, you’ll need a signed gifted deposit letter confirming it’s a gift and not a loan.
Related: What to do if your mortgage application fails
What do estate agents mean by proof of funds?
When an estate agent asks for proof of funds, they’re not trying to catch you out – it’s simply about making sure everything is in place and that the sale can progress without delays.
Agents are usually looking for:
- A recent bank statement showing the deposit or purchase funds
- A mortgage agreement in principle (AIP)
- A formal letter from your bank or solicitor confirming the funds
If your purchase involves both a deposit and a mortgage, they might ask for documents showing both.
Related: Do I need a financial adviser?
What is a proof of funds letter?
A proof of funds letter is a short document that confirms you have the money available. It’s usually written by your bank, solicitor, or financial adviser and includes:
- Your full name and address
- The amount of money available
- Confirmation that the funds are cleared and accessible
- The date the letter was issued
- Contact details for the person or institution providing it
These letters can be especially useful if you’re relying on overseas funds or multiple sources of money.
Can a gifted deposit be used as proof of funds?
Absolutely, but you’ll need to provide a bit more documentation to keep things above board.
If a family member is helping with your deposit, here’s what lenders and solicitors typically ask for:
- A signed gifted deposit letter confirming the money is a gift and not a loan
- ID and proof of address from the person giving the money
- Their bank statement showing the money leaving their account
- Your statement showing the money being received
Lenders need this information to make sure the gift won’t affect affordability or cause complications during the sale.
How to stay prepared
Here are a few helpful tips:
- Start gathering documents early in the process
- Make sure your name and the amount available are clearly shown
- Avoid using screenshots or cropped images – full PDFs work best
- Use recent statements, ideally from the last three months
- If you’re unsure, ask your mortgage adviser or solicitor for guidance
Ready to make your move?
Getting your proof of funds in order might feel like paperwork, but it can give you the edge when it really counts. It shows sellers you’re serious and helps the whole process move more smoothly.
If you’re about to make an offer or just want help understanding what’s needed, speak to your local Ellis & Co branch. We’re always happy to talk through your next steps and help make your move a confident one.
