The type of real estate transaction you conduct determines when the funding takes place. In most cases, purchase closings fund right at the closing, unless you live in a dry closing state, then it may take a few days. Refinances fund three business days after the closing because you have a ‘three day right of rescission,’ this gives you time to change your mind and cancel the loan.
Wet closings are the most common. What they mean is the loan funds while the ink is still wet on the papers. Typically, banks wire the funds to the closing agent before you even get to the closing table. In some cases, you may have to wait a little while, but it’s typically the same day.
During a wet closing, the closing agent typically issues checks right at the table. The seller and all third parties getting paid receive their checks at the table. If the agent is wiring the funds, they’ll wire them the same day to the designated account.
At a dry closing, the lender has the right to review the documents before funds get distributed. This can take one or more days, depending on the lender’s protocols and workload. At a dry closing no money exchanges hands. In reality, it’s not a closing; it’s just a signing of documents. It’s not until the lender approves the documentation that the funds get disbursed.
When you refinance, you have three business days to change your mind. This does include Saturday, but not Sunday. If you close on a Wednesday, for example, you have until Saturday at midnight to change your mind. If you don’t rescind the mortgage by sending your request in writing, the loan would fund on the next business day, which would be Monday in this case. Read More