Now that we’re getting closer to your closing date, it’s time to get your down payment ready! Remember that in addition to the down payment you'll need money to cover your closing costs and prepaids on top of the down payment. If you aren't sure how much cash you need available, please speak with your lender.
If any of these funds are going to be gifted to you from a family member, you need to let your mortgage lender know right away so he or she can get approval from the underwriter for the funds as well as have a gift letter created and signed by all parties.
It’s best if the down payment and closing cost funds are transferred into one account. This account must be disclosed to your mortgage lender and you must let him or her know this is the account you’re going to be using for the down payment as the funds have to be tracked. So before moving any money between accounts, please speak with your mortgage lenders.
One business day before your closing date, your mortgage lender will email you a close estimate of the amount of money needed to close and will help you get the wire transfer instructions from the Title company. Unfortunately, the total amount usually is not available farther in advance as the title company needs to receive final figures from both your lender (if utilizing a mortgage) as well as the listing side. Your lender will often ask you to transfer a little extra money (typically $500 - $1000) on top of the estimate, just in case there are any surprises or mistakes found at closing in regards to the numbers, which happens sometimes. You’ll wire transfer these funds in one lump payment the DAY BEFORE CLOSING. It is crucial that these funds be wire transferred the day before closing at the latest to ensure a smooth quick closing. Some Title companies are able to accept a cashier's check instead so if you'd prefer to bring a cashier's check, just ask the closer at the Title company if that's an option (they definitely won't accept a personal check).
While it would be nice to wire transfer the funds several days in advance, often the title company doesn’t have the exact figures until a day or two before. Therefore, call your bank now and find out what you need to do to make a wire transfer. Most of the time you have to go into the bank personally to initiate the wire transfer as this is usually not the kind of same day wire transfer that can be done online. Also, find out what their cut off time is for wire transfers. Usually it’s around 4pm. That means you’ll have to do the wire transfer by that time the day before closing in order for it to go into the title company’s account on time. Once you’ve done the wire transfer, email myself as well as your lender so we can make sure the title company received the funds.
Lastly, explain to your work that you need to leave for a little while the day before closing in order to initiate the wire transfer and make sure that is OK with them.
At closing, any overage/extra money you paid will be refunded back to you at the very end of the closing via a check.
PLEASE NOTE: There have been a number of hackers and scammers lately trying to divert (ie. steal) closing funds to their personal accounts and away from the title companies. Generally, the wire transfer instructions will only be emailed to you from the Title company, however, occasionally they will be sent to you from your lender. THEY WILL NEVER BE SENT FROM ME. DO NOT FOLLOW WIRE TRANSFER INSTRUCTIONS SENT FROM ANYONE ELSE. ONLY FOLLOW WIRE TRANSFER INSTRUCTIONS SENT TO YOU BY THE TITLE COMPANY OR YOUR MORTGAGE LENDER. If you want to verify that the wire transfer instructions you received are legit, call the title company and they can verify them with you via phone.
