Remember that you’ll be bringing the down payment and the closing costs to the closing table. Some title companies offer the option to wire the funds securely through your bank. Prepare to have roughly 3% of the sales price in closing costs unless you negotiated closing cost in your offer.
Sometimes family or friends will gift you the funds for your closing or down payment. You will need to let your mortgage broker know that that the money can be properly documented for the underwriter. This applies in cases of inheritance as well.
Funds in this process must be tracked, therefore, all the funds for closing and down payment should be transferred to the same account and you need to make your mortgage broker aware of this account. This is to protect you and your investment as well as the bank from illegal transfers and activity.
Approximately three days prior to closing, you should receive emailed instructions from the title company or mortgage lender giving you an estimate of the final closing costs and instructions for a wire transfer. You’ll need to transfer the entire sum in one wire, or cashier’s check one day before closing. To ensure that the title company can accept and process the funds, it’s essential that you transfer them the day before closing.
You can expect an estimate from your lender if you have not heard from the title company.
Prepare your bank for the upcoming wire transfer. While it would be nice to know well in advance, and just complete the transfer to get it out of the way, that isn’t often possible, as the title company doesn’t get final figures until the day before closing. But while you’re waiting for the lender to communicate the final numbers, it’s best to give your bank a heads up and make sure there is nothing they need from you to complete the process. This would be a good time to ask about the bank’s wire transfer cut off time, most banks cannot process transfer after 4 pm. Plan accordingly, you will need to transfer before that time the day before closing. It may seem like we’re harping on this piece of advice, but it is crucial to hit this deadline in order to avoid delaying your closing. Once the transfer is complete and you have confirmation, email us at [email protected] with the subject line “Wire Transfer – Property Address”, also email the same confirmation to the settlement company and your lender.
Schedule time off work if necessary to spend the time needed at the bank the day before closing to initiate the wire transfer and see it through.
If there are any overpayments or refunds due to you, you will receive these after closing in the form of a check.
IMPORTANT NOTE: In recent months, there has been an uptick in fraudulent activity around wire transfers. Hackers have begun to send legitimate looking emails giving false wire transfer instructions and diverting your down payment and closing funds to their own untraceable account. If anything looks wrong or you don’t recognize the email address or format, DON’T SEND MONEY until you’ve called the title company and your Realtor to confirm the information. Further, at no point would any parties involved in this transfer ask for the account number you’re transferring from.
For further questions or advice, please call us at 703.539.2053 or email us at [email protected]
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