As you close a loan, one term you might hear is “table funding.” Some people refer to this as “wet closing.” The opposite of this term is “dry closing.” Basically, a closing will occur when ink on paper is either dry or wet. In other words, awaiting. Will be necessary before funds are disbursed.
WET CLOSING/TABLE FUNDING
Closing Pat has either table funding or wet closing refers to loan funds available. A closing’s aspects will be complete at the meeting’s end. In other words, wired funds can be accessed right away by a closing agent, who can then have funds dispersed as soon as the bank approves it (which tends to be instant). A seller can walk away from a closing with cash in hand, and so, too, will all independent parties that are involved with the transaction.
Dry closing happens when papers get signed during the closing. Money does not yet exchange hands. Paperwork is sent to a lender in order for a funding department to review the package. That package will be reviewed for legitimacy, as well as any fraudulent signs, to make sure that all documentation is completed properly. After verification that all specified conditions have been met, a funder will release funds to a closing agent. This individual will then disburse the funds accordingly. This process can last one day or as long as four.
IS TABLE FUNDING AVAILABLE IN EVERY STATE?
Not every state allows table funding. Here are the ones that do:
- New Mexico
All remaining states can be described as “wet states.”
WET FUNDING ADVANTAGES
Table funding (a.k.a. wet funding) comes with its fair share of advantages. To begin with, there is no unexpected condition risk – no major conditions, at least. You may discover minor issues to address, like signature issues or evidence of debts that have been paid off, but these things can be resolved easily. Major issues will not be something you come across, like contract concerns. These types of things will be handled before the closing process begins. Any delays that transpire will not happen during closing time or because of funding.
Fund immediacy is another advantage. After a file receives funding approval, the funds are wired by a lender before closing time. A closing agent will make sure that funds are available before the process starts. You won’t have to worry about deals falling through or funds being delayed due to insufficient funds.
DRY FUNDING ADVANTAGES
Although it is only necessary in several states, there are some advantages that come with dry funding. This type of funding allocates more time for issues to be dealt with. A lender will have time to resolve issues pertaining to loan paperwork, final credit poles, or final audits required.
Further, the borrower will get more time to accommodate any requested lender essentials. If there are paid debts involved, you will have an opportunity to offer proof of your payment. Funds will be dispersed by lenders until every condition is met. However, the signing aspect of the process can be done. Dry funding provides both the seller and lender with more time so they can resolve last-minute problems without postponing the closing.
PRESERVING THE PUNCTUALITY OF CLOSING
Whether your closing is wet or dry, you must endeavor to be sure that all bases are covered before a closing. Consider the following suggestions:
- If there is anything you don’t understand, ask questions.
- Obtain a cashiers check well before a closing date.
- Have closing costs and down payment funds available before the date of closing.
- Ask a loan officer questions pertaining to outstanding conditions based on appraisal, seller, or title issues.
- Follow-up with a loan officer about any conditions.
Using these basic suggestions, whether your closing is dry or wet, you will be able to make his way through the entire funding process. You should work alongside your lender to ensure that you are both in sync, as far as particulars go.