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Proof of Funds - Tips and Tricks

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Hi everyone!

So in light of the recent questions on how to provide proof of funds I have decided to post some tips and tricks...Planning ahead is key if you are going to start this exciting life changing process of Immigration; so cut out your un-necessary expenses and start pumping the saved cash into your future. If you are certain you want to immigrate then you will do just about anything to make it happen.

Anyone is welcome to add to this post with their tips and tricks and make corrections.

Lets just go through the basic requirements to show that you have funds:

  1. You will need no less than 3 - 6 months (application type dependent) proof of funds in your bank account.
  2. Provide stamped bank statements of at least 6 months showing the funds as being available on an official bank letter head.
  3. This needs to preferably be liquid assets - aka easily accessible.
  4. Take recent bank stamped copies (not older than a month) of your proof of funds with you when you fly to Canada.
  5. You need to have these funds in your account when you land as proof of funds maybe asked for at Immigration and they may request you to prove that it is in your account.
  6. ....(will add more here as I remember)

Tips / Tricks:

  1. Borrow money from friends and family just enough for the funds requirement. Put into a money market account and let it sit there collecting interest. Thus also building up a statement history Then return it once you have been approved and have crossed the border in Canada.
  2. Use your pension / provident fund to obtain a loan - in other words withdraw the required amount and put it into an interest bearing account.
  3. Use the sale of your house as funds (I have attached a sample letter which you could use to show the value of your house and what the anticipated sale price)
  4. Sell your house - yes you heard me - sell it! Then get an appropriate place to rent. You will find that your costs go down with the fact that you have zero maintenance to carry out, no rates and taxes to worry about and if you are renting in a townhouse complex then no water bills to pay for. Just electricity. Invest the proceeds in a money market account as this seems to currently be the best savings account with a high Return On Investment (ROI). Another advantage of this is when your PR / WP is approved you can simply book your tickets, pay for shipping and move.
  5. By selling your house, you are also able to settle your car debt and other debt. Once this is done and you are ready to leave the sale of the cars will result in pure hard cash.
  6. Use an internationally reputable recognised Real Estate Agency like Remax as it shows credibility and make your proof of funds via the house route much more realistic.
  7. Also keep in mind it take about 6-8 months for you to be refunded by the municipality (in JHB anyways) for your electricity / rates and taxes account - so plan ahead and you would end up having another nice lump sum.
  8. Start selling off things that you have no use for that is sitting in your cupboards / garage for more than 6 months and not been used. Put the proceeds from this into an interest bearing account. Before you know it you will have a nice lump sum.
  9. ....(will add more here as I remember)

This is a work in progress!

House Sale Letter template for Proof of funds.pdf

Edited by AshB
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Deodene

Thank you AshB, great tips!!

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Guest

Thank you AshB, great tips!!

Pleasure Deodene.

I have updated it...

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Nelline

I've apparently used up my quota of likes for the day but I LIKE your post Ash!

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Guest

I've apparently used up my quota of likes for the day but I LIKE your post Ash!

Thanks Nelline.

Sadly Eishkom strikes again.........no power :censored:

Is it possible to pin this thread? If so can one of the admins / mods pin it please. Thank you.

Edited by AshB

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Helanie

Hi everyone!

So in light of the recent questions on how to provide proof of funds I have decided to post some tips and tricks...Planning ahead is key if you are going to start this exciting life changing process of Immigration; so cut out your un-necessary expenses and start pumping the saved cash into your future. If you are certain you want to immigrate then you will do just about anything to make it happen.

Anyone is welcome to add to this post with their tips and tricks and make corrections.

Lets just go through the basic requirements to show that you have funds:

  1. You will need no less than 3 - 6 months (application type dependent) proof of funds in your bank account.
  2. Provide stamped bank statements of at least 6 months showing the funds as being available on an official bank letter head.
  3. This needs to preferably be liquid assets - aka easily accessible.
  4. Take recent bank stamped copies (not older than a month) of your proof of funds with you when you fly to Canada.
  5. You need to have these funds in your account when you land as proof of funds maybe asked for at Immigration and they may request you to prove that it is in your account.
  6. ....(will add more here as I remember)

Tips / Tricks:

  1. Borrow money from friends and family just enough for the funds requirement. Put into a money market account and let it sit there collecting interest. Thus also building up a statement history Then return it once you have been approved and have crossed the border in Canada.
  2. Use your pension / provident fund to obtain a loan - in other words withdraw the required amount and put it into an interest bearing account.
  3. Use the sale of your house as funds (I have attached a sample letter which you could use to show the value of your house and what the anticipated sale price)
  4. Sell your house - yes you heard me - sell it! Then get an appropriate place to rent. You will find that your costs go down with the fact that you have zero maintenance to carry out, no rates and taxes to worry about and if you are renting in a townhouse complex then no water bills to pay for. Just electricity. Invest the proceeds in a money market account as this seems to currently be the best savings account with a high Return On Investment (ROI). Another advantage of this is when your PR / WP is approved you can simply book your tickets, pay for shipping and move.
  5. By selling your house, you are also able to settle your car debt and other debt. Once this is done and you are ready to leave the sale of the cars will result in pure hard cash.
  6. Also keep in mind it take about 6-8 months for you to be refunded by the municipality (in JHB anyways) for your electricity / rates and taxes account - so plan ahead and you would end up having another nice lump sum.
  7. Start selling off things that you have no use for that is sitting in your cupboards / garage for more than 6 months and not been used. Put the proceeds from this into an interest bearing account. Before you know it you will have a nice lump sum.
  8. ....(will add more here as I remember)

This is a work in progress!

Awesome post Ash!!! Thanks for sharing!! :ilikeit::ilikeit:

Will surely help MANY people! :hug:

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Helanie

I've apparently used up my quota of likes for the day but I LIKE your post Ash!

Me too!!!!! I don't like this quota thing as I keep running out of likes! :blush::P

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Guest

Great post AshB, thanks for taking time to share.

Me too!!!!! I don't like this quota thing as I keep running out of likes! :blush::P

Must admit I haven't heard or even thought of that word in a long time, "quota". Mind you with BEE and all the other BEE's, that word is probably the most used in South Africa's vocabulary!

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Guest

Great post AshB, thanks for taking time to share.

Must admit I haven't heard or even thought of that word in a long time, "quota". Mind you with BEE and all the other BEE's, that word is probably the most used in South Africa's vocabulary!

Pleasure! In fact there are lot of things we could post and pin them to FAQ's for documentation and advice for the common things in the process.

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Sideline

Interesting post Ash,

However I might be inclined to disagree with your thought on selling the house.

First, what if you don't get accepted for EE or PnP etc? Then you need to buy a new house at a much higher price. But that's a debatable topic so not worth making it negative.

The strongest point I disagree with is the selling your house and renting property. UNLESS rental is significantly, and I mean seriously significantly (as much as 50% or more) less than your mortgage (bond). Why pay some one else's bond for them when you can pay off your own? By keeping your property until the appropriate time (after being selected etc) every month you pay into your mortgage you reduce your amount owing and your property in theory gains value. So when you do move/sell you owe less and get more. You can easily make it a condition that a house transfers within a few days of you leaving and you can bunk with family. You can easily sell 6 month ahead and make it a condition of both that you get the PR etc and that ownership will pass shortly before you leave. That gives you two ways to back out if needed. No PR/WP no sale.

Now selling to early and renting starts to erode your capital and you also get tempted (its human nature no matter how strong you think your financial discipline is) to buy those things you wouldn't usually but now are cash flush, or go out more often, or take more trips etc.

You end up paying rental, and I am to be corrected but very few reasonable rentals exist under R10/12 K a month anymore anywhere in SA. So unless you can get a rental for under R5k you are going backwards and paying someone else's bond for them. Your mortgage (for most people) is around that R8/12k Mark so you may as well pay down your own capital.

Before you know it you have spent a large chunk of money you should be taking with you and you struggle even more this side.

Settling car debt etc can be achieved by just killing your unnecessary expenses and plugging that into these high interest debts. Cars depreciate so you won't get much for it anyway, where as property increases. Selling anything because you are "leaving" puts the buyer at an advantage of "I'll grab this cheap and you don't have a chance to waste time looking for a better price" immediately.

Municipal refunds get paid to either the attorney doing the transfer or to your bank account. Think of it as a little bonus when you need it most in Canada, suddenly there is a few extra hundred dollars waiting for you and you need it right at that time, for what ever.

Not saying your thinking is wrong, but planning correctly relieves many a headache and heartache.

Edited by Sideline
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Denise A

Have your vacation days paid out.

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Denise A

Also we sold our house only from when we were already living in Canada and I wish we had much sooner.

It was a nightmare with one guy interested but then pulling out, setting us back another 2 months of covering that morgage... So if you can sell, sell. No investment in any case with all decreasing in SA

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MaryJane

Have your vacation days paid out.

I know employers do this, especially if you have good rapport with them. I've had one employer do this for me once before while I was still employed because I just accumulated too much leave. But just to put it out there, according to SA Labour legislations:

"Pay Instead of Annual Leave

Employers may not pay workers instead of granting leave, except on termination of employment.

Based on Legislation in Section 21, of the Basic Conditions of Employment Act"

http://www.labour.gov.za/DOL/legislation/acts/basic-guides/basic-guide-to-annual-leave/?searchterm=leavepay

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Sideline

Also we sold our house only from when we were already living in Canada and I wish we had much sooner.

It was a nightmare with one guy interested but then pulling out, setting us back another 2 months of covering that morgage... So if you can sell, sell. No investment in any case with all decreasing in SA

Yes I would agree with that, trying to sell when not in SA can be a nightmare. Selling before you leave with the conditions mentioned above at least covers you in case something goes wrong or a delay happens. Cover your a$$ basically. Nothing like loosing a family home and not being able to get out of the deal.

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Guest

One can use the equity in your home and take out an access bond. (bond in SA is a mortgage Canada). Transfer the money into an investment account that earns interest. There you have proof of cash funds. In addition the money is earning interest so you recover part of the additional home loan / bond payment. Might not be practical for everybody, but I reckon if you are going to sell your home anyway, why not use it.

Edited by Lawrence

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Guest

Also we sold our house only from when we were already living in Canada and I wish we had much sooner.

It was a nightmare with one guy interested but then pulling out, setting us back another 2 months of covering that morgage... So if you can sell, sell. No investment in any case with all decreasing in SA

Never an easy task selling a home from Canada. Done it with our main house and now doing it with an investment property. If I can give anybody advice, try and sell that home before you leave South Africa. No matter how good the tenants and rental agent are; out of sight out of mind. I went back in 2013 to visit and inspect our home. I was disappointed how the rental agent allowed the property to deteriorate. Its not that the property was falling to pieces, its the small things i.e. broken door lock, cracked window etc. These little things eventually lead to the larger deterioration of the property. Our one saving grace is that we've had good tenants. My estate agent (Canada is a realtor) in South Africa was saying its still a sellers market?

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Guest

I think I need to clarify my post about selling a home to gain cash for POF. I will do that after brunch and my Moroccan mint tea :holy:.

EDIT:

Ok so the reason I mentioned sell your house is because if you are far down the line in the process of immigration, you have already made up your mind to leave RSA. Whether you go to Canada, Dubai, Australia it doesn't matter.

If you do sell, you have to plan the actual sale out pretty well which is why I stated at the beginning of my post that Planning ahead is key. You have an idea of more or less when you will put the house on sale, you then are left in the hands of the potential offers and the buyers that come with it. The reason for the attached Remax letter above is to prove that you are serious about this endeavour and that you will have the money (generally more than what you would need to show as proof of funds). This was the advice that we received from our attorney before our application was submitted in September 2014 and the letter was drafted with the attorney's guidance - we had tried the pension fund route but the attorney was sceptical that it may not be sufficient and suggested the house option. I must admit there were other factors at play in this decision though.

So in our scenario we put the house on the market in August 2014, it took a month for a suitable buyer to make an offer and voila we accepted the offer. In many cases this does not happen so quickly and sometimes ends up being a very prolonged process with 3-6 months and no offers. Then it takes time for the funds to be made available by the buyer by whatever financing method was available. If there are no issues with financing, then the transaction moves along smoothly reducing time for the transfer to be lodged. Remember it takes around 3 months for the transfer of the property to be completed...Our property was finally transferred in December 2014. By this time our application was already submitted with the Remax letter so we were off. Between the time of submission of our application and the transfer we further provided proof of funds based on the transaction.

We found a place to rent which is quite a lot cheaper than a bond / mortgage payment - about R5000 cheaper. Reason we were able to do this is because in the run up to the actual transfer of the property we cleared out our garage, cupboards etc of clutter which we all tend to accumulate when you own a house. This meant we could easily settle for a smaller space and the bonus of it all was we made some cash in the process of selling off items.

Now keep in mind you now do not have to have insurance for the bond / mortgage anymore so you score on a lower premium if you so choose - another bonus.

Another R3000 was saved by moving into a townhouse complex where the electricity costs were significantly reduced and we did not have to pay for water, rates and a taxes. So we scored again!

With the proceeds from the property sale we settled the only vehicle debt we had (which admittedly was less than R20 000) but this also meant an extra sum of money every month available which went into a savings account via a self imposed debit order. The savings account had a self imposed limitation on withdrawals as well. You had to give notice to withdraw funds...so the inconvenience of giving notice deterred any impulsive spending.

If you are wise enough you will not inform people of the reason for the sale of your cars / items. You can merely say that you are downsizing. Selling items to friends and family is nice but not to your advantage because they will want it for nothing.

And after 7 months after transfer we just received our Municipality refund even with the use of the attorney! That brings a total of 10 months from sale. So factor that in too...more admin if you leave without having these things resolved.

Sidelines comment:

"You can easily make it a condition that a house transfers within a few days of you leaving and you can bunk with family. You can easily sell 6 month ahead and make it a condition of both that you get the PR etc and that ownership will pass shortly before you leave. That gives you two ways to back out if needed. No PR/WP no sale."

Very few people in this buyers market (yes it is a buyers market and not a sellers market no matter what the agents tell you!) will go for this sort of a deal. Reasons being why would they want to wait for ownership? Or for that matter pay occupational rent for something that they have purchased just to suit the needs of the seller. It will not go down well. In addition, you are at the mercy of the Municipality Deeds office and cannot predict when the transfer will materialise so you would be holding your buyers at ransom. To me this does not make sense especially if you want the deal to successfully go through. Most buyers would run from this sort of condition.

The proceeds from your house sale needs to go into an interest generating account with the . Keep in mind that you are still working and would have still had to pay for a bond / mortgage so you are not impacting your capital. You still have a monthly budget to maintain...but you are now doing it while earning some serious interest if you have invested it wisely.

So when looking at all of these factors we planned this house sale 6 months in advance and executed it when it was required - we were lucky to find a buyer rather quickly and this is not always the case.

Yes we gave up a family home but let's be honest here...it's just brick and mortar on a piece of land. You don't take it to the grave with you and neither do you take your money. If you want to be sentimental about a building in the face of a hopefully brighter future and find it's difficult parting with it then you should not be emigrating! Stay where you are and enjoy your home and sentiments, but also don't complain about everything around you and the sad state of affairs.

You don't just wake up one morning and say "I want to emigrate" so plan accordingly if it is your intent. Then execute it properly without second guessing yourself, a missed opportunity never comes around twice. Selling your home is a calculated risk which you take, pretty much like the Immigration application you just submitted .

With risk you should have a mitigation plan in the unlikely event there is a deviation from the desired outcome. Hope for the best and plan for the worst... :cowboy:

So to summarise...planning carefully in advance is key!

PS. @Raquel: The project manager in me is evident in this post :blush:.

Edited by AshB

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Qrios1

1) CIC states that one can't borrow the money for POF. I agree that funds should sustain you until you find a job after landing. What if a friend or family member advances you the funds and when you sell your house or Pension cash out you simply pay them back. That should be fine.

2) On Canadavisa people speak about "gifts" from their parents but needs to be supported by an affidavit

Edited by Qrios1

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Guest

I updated and clarified my reasons for selling of property.

Thanks for all the comments and advice from each of you, I will update the initial post for as long as I have rights to. Please keep in mind I am not a financial advisor - I am merely using my experience and logic. So adapt and apply any of the tips above with respect to your specific situation.

Edited by AshB

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Druce

All great advice guys, thanks for the tips. What happens if you have a loan in SA and you cant pay it back. I mean other than getting blacklisted here and the moral issue?

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Guest

It will be a mark on your credit history and could possibly follow you to your new home country. Remember you have no credit history in your new home country so you would need to bring some sort of credit history with you - as in a credit history report from TransUnion...

Bad karma is also a b&*^% and will bite you in the a@# I would recommend making a payment arrangement with the lender to avoid trouble.

All great advice guys, thanks for the tips. What happens if you have a loan in SA and you cant pay it back. I mean other than getting blacklisted here and the moral issue?

Edited by AshB

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Druce

It will be a mark on your credit history and could possibly follow you to your new home country. Remember you have no credit history in your new home country so you would need to bring some sort of credit history with you - as in a credit history report from TransUnion...

Bad karma is also a b&*^% and will bite you in the a@# I would recommend making a payment arrangement with the lender to avoid trouble.

Thanx for replying AshB - I have a vehicle which I dont think I will be able to settle after selling it and just thought that I will leave it for the bank to sort it, but this does not seem to be the route to follow seeing that I might get a bad credit rating and have my @$$ bitten by karma, that b!tc# dog you are talking about :P

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M-N

Thanx for replying AshB - I have a vehicle which I dont think I will be able to settle after selling it and just thought that I will leave it for the bank to sort it, but this does not seem to be the route to follow seeing that I might get a bad credit rating and have my @$$ bitten by karma, that b!tc# dog you are talking about :P

Rather put what you can into the outstanding amount and make payment arrangements. On the bright side, once you start earning those Canadian $$$$ making the payment may look like small change :whistling: (depending on your Canadian income and expenses of course) because of the exchange rate.

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Druce

Rather put what you can into the outstanding amount and make payment arrangements. On the bright side, once you start earning those Canadian $$$$ making the payment may look like small change :whistling: (depending on your Canadian income and expenses of course) because of the exchange rate.

Sounds like the best option. Thanks for the advice M-N

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jazzy111

Hi

I would just like to ask whether the proof of funds have to be in the principal applicant's name (that would be me) or is it OK if it's in the spouse's name?

(my husband has an overseas account shared with his dad & this may just have enough to be eligible for the "minimum" requirement for us - 2 adults, 1 kid)

I would still have to sell the house/resign to put my very non-liquid assets in a bank statement format.... :unsure:

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