The Funder’s role in the mortgage process is to ultimately confirm and approve the distribution of funds and authorize the recording of the property’s change of ownership. How and when this process begins will depend on whether the transaction is taking place in a wet funding state or a dry funding state.
In a wet funding state, the Funder will contact the title company prior to closing to verify the total amount of money that needs to be wired to complete the transaction. If the lender’s amount balances with the title company’s amount, the Funder will order the wire in advance so the funds can be delivered to the title company before the scheduled closing. This allows the funds to be disbursed to the appropriate parties immediately after closing.
In a dry funding state, the title company sends all of the documents signed at closing back to the lender, where they are reviewed by a Funder. The Funder ensures all of the documents are included, appropriately signed and dated by the borrower(s), that all of the conditions have been cleared and that any funds necessary to close were received. Then the Funder will verify the wire amount with the title company and if they balance, will order the wire and authorize the title company to disburse the funds appropriately.
Once the title company has distributed the funds, they will deliver the documents to the appropriate entity to officially record the property’s change in ownership – which may occur same-day. After this, the transaction is complete.
Mandy Edwards, Funding Team Lead at Castle & Cooke Mortgage, explains three things that your Funder wants you to know:
1. It is best to close earlier in the day.
Because your lender, title company and recording office are subject to wire cutoff times, it may be in your best interest to schedule your closing for earlier in the day, if possible. If you close later in the day, there is a greater chance that the disbursement of funds and recording will not take place until the following business day or later.
2. You may still be asked for documentation during the funding process.
If, after a review of your documents, the Funder discovers that certain conditions have not been satisfied or documentation is missing, you may be asked to provide it. It is possible that this could even occur after you have signed your closing documents. Be sure to provide what is requested in a timely matter, as the Funder cannot authorize the disbursement of funds until everything has been received.
3. You might not receive the key to your new home at closing.
Receiving the key to your castle is truly the most exciting part of the homebuying process and you might expect to have it in your hand as soon as you have signed your closing documents. However, in many cases, you may need to wait until the sale officially records before you can take possession and the timing of this will depend on whether you are in a wet or dry funding state. Your real estate contract should also indicate your occupancy date, which will help determine when you can officially take possession of the home.
Castle & Cooke Mortgage, LLC® (NMLS #1251) is a leading independent mortgage lender headquartered in Draper, Utah, with locations across the United States.
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