Closing Day is set! You’ve done it, you’re excited, your loan is “clear to close”, and ALL you have left to do is deliver your closing funds to the title company. No worries, you can just write a personal check, right? WRONG. Here are some common mistakes homebuyers can avoid when preparing down payment funds for closing.
Most Title Companies will not accept a personal check for over $500, making a wire transfer the likely solution. However, do not assume you can simply pick up the phone and authorize a large wire transfer. Many banks require you to be in-person to request a wire over a certain amount. And what if your bank doesn’t have a nearby location? Now you can’t get your money in time for closing. So, what can you do to avoid this situation?
There are two main options for Closing Funds, also known as “Good Funds”. You can go into your bank and request an official Cashier’s Check made out to the title company, OR you can wire your funds directly to the Title Company. The Cashier’s check is quick and easy to obtain, and many buyers will pop into their bank on the way to closing. This service is usually free or has a very small cost depending on
the bank. You then hand over your check to the Title Closer and you’re all set! But wait, what if the title company won’t accept a cashier’s check OR your bank isn’t local? Then you will likely be wiring your funds to title and depending on the bank may have additional requirements.
Some banks require you to go into a branch to request a wire, some require a faxed authorization to be submitted in advance, and some require a waiting period before a wire will be sent. These requirements can cause hiccups and delays when you need access to your money, potentially delaying your closing and causing panic for all parties.
First, talk to your lender in detail about the “right” option for moving funds to title IN TIME for your closing. Also, be cautious if you are using an online “bank”, as they are often not true banks and operate under the umbrella of a larger bank. They often do not offer the same features as a bank, like cashier’s checks and wires unless you plan well in advance. This means you can find yourself looking at your “available” balance and ready to move money, yet the online bank won’t allow you access or move your funds in time, potentially jeopardizing your closing date. Confirm your bank’s policies ahead of time to be sure you’re set up for success on your Closing Day, and not finding yourself in a last-minute panic. A trusted mortgage professional is your number one resource to help navigate these pitfalls, and help you avoid unnecessary pre-closing stress.
Spire Financial (A Division of V.I.P. Mortgage, Inc.) brings lending expertise to you. All of our loan officers offer personalized communication for every client, guiding them through the process. We can show you ways to maximize your finances and unlock future opportunities. Spire Financial keeps you in control of refinancing, debt consolidation, and home equity. Together, we can achieve your financial goals.
V.I.P. Mortgage, Inc. DBA Spire Financial does Business in Accordance with Federal Fair Lending Laws. NMLS ID 145502. For state specific licensing, visit www.vipmtginc.com/national-licenses/. V.I.P. Mortgage, Inc. is not acting on behalf of or at the direction of the FHA/HUD or the Federal Government. This product or service has not been approved or endorsed by any governmental agency, and this offer is not being made by any agency of the government. V.I.P. Mortgage, Inc. is approved to participate in FHA programs but the products and services performed by V.I.P. Mortgage, Inc. are not coming directly from HUD or FHA. Information, rates, and programs are subject to change without notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions may apply. This is not an offer to enter into an agreement. Not all customers will qualify.