Welcome to our Important Date Blog Series! This series of blog posts highlights each common important date in the Purchase & Sale Agreement for the State of Maine. These were written to give you a basic understanding and we suggest that you always speak with your Agent if you have any questions!
This is also one of the first deadlines in the contract. Lenders will want all your paperwork as soon as possible to meet this deadline.
Okay, so, we already talked about your pre-approval letter or pre-qualification in the previous blog about Earnest Money. Now we’re getting into the more serious deadlines. Providing a “Made Application Letter” or “Proof of Funds” to the Seller.
Let me start with the Made Application Letter. When your Agent is writing up your offer on a property they’ll discuss with you what type of financing you’ll be applying for. Some information about your financing will be included in your offer. You’ve got to make sure the Seller knows you’ve got your ducks in a row. Things like “conventional, FHA, 90% down, 15 year”, will be thrown around. Check with your lender on the specific financing options you have for this specific property. They can and will change based on the sale price, location, and type of property, and overall strategy of the purchase.
Now after your offer has been accepted (fingers crossed), your agent will mention they need a “Made Application Letter” from your Lender within a certain amount of days. Your Lender should have a template for this and should be able to provide you with that letter within a few days if you’ve provided them with all the necessary paperwork they need. This “Made Application Letter” is proof that you’ve applied for a mortgage on this specific property. It’s not only much stronger than a pre-approval letter but also makes you look like a responsible adult. You’re telling the Seller, “I’m so serious about buying this property I’ve sent my lender every tax document they could ever need and they still say I can buy your house”. Pretty straightforward, eh?
Proof of funds is a whole different ball game. You’ve put in an offer on a property, you know you can cover the cost of the purchase price (plus settlement costs, prorated taxes, yeah yeah yeah) in cold hard cash. Now, prove it! Your Purchase and Sale Agreement states you’ve either already provided proof of funds or you will within a certain amount of days. Providing a bank statement, bank letter, or account screenshot (as long as it has your name and a recent date) is typically the way to go. Bear in mind it’s still up to the Seller to find your proof of funds acceptable so make sure it’s legit.
You’re making money moves 👏🏼