Proof Of Funds And Transactional Funding

If you are interested in buying property Owned or short sale properties, then you want to understand the fundamentals of transactional funding and proof of funds letters and how they relate to your property interests and activities. Basically, the transactional funding refers to the funds borrowed for a very short period to transfer a property from the present owner, to the transaction coordinator, then to the new owner. Proof of funds letters are used to help secure financing and smooth the way for the estate transactions you are concerned in.

The use of transactional funding allows the short sale process to occur smoothly. The basic grounds for the loan is that once the original owner is ready to sell and the purchaser is ready to take over the property ( generally with a standard mortgage), there is a short term loan wanted to facilitate the transfer period.

The 2 separate transactions that place on the day of settlement create a novel situation known as a double closing. If the transactional funding bank guarantees that all the other financing for the transfer of the property is in place, this makes this short-term loan deliver a comparatively low risk opportunity for a lucrative result from the provision of the short term loan.

Transactional funding works not only for the short sale eventuality listed above. An experienced financier can structure the use of a short term loan to easily carry out purchases of property owned (REO) properties, or any other real estate transaction that is based around a double closing.

When buying property, the purchaser must provide some kind of evidence that they have the funds to cover the property acquisition - this is where a proof of funds letter becomes helpful. This document that the investor can use to indicate to the parties concerned in a real estate exchange that you have pre-qualified to purchase the real estate.

Using this letter, the buyer/investor is able to secure any necessary additional funding or to reassure the seller that they have the means to fund the property purchase.

To achieve success in property investment, it pays to entirely understand the different options available to you and how to use them to maximum advantage. Transactional funding and the use of proof of funds letters are 2 added 'tools' in your investment tool kit. After you know how these finance opportunities can be used to the best advantage, you'll be on track to achieving monetary security thru real estate investment.