Real Estate-ese: Buyers Ask “What is Funding?”

By
Real Estate Agent with Solutions Real Estate CalBRE License #01490977

Real Estate-ese

“What is Funding?”

 

Buyers need to understand all there is to know about how to buy a Carlsbad home, from start to finish, including the terminology used in real estate transactions that may be confusing, especially if you are a first time buyer. “Funding” is one of those words you should understand.

 

Certainly the most exciting part of your home purchase is your closing. It’s handled in different ways in different states, but once it happens you become a new home owner. You can learn more about closing here in the Carlsbad area and closing costs with these links. Or watch the short VIDEO below on closing.

 

 

Buyers often ask what funding means as part of the closing process, and it’s important to understand not only what it is, but also the timing, since your closing cannot happen until the loan had been funded by the lender.

 

Here’s a quick summary of the process.

 

Loan funding is the money you are borrowingAny buyer getting a loan in order to purchase a Carlsbad home will need to have final loan approval (appraisal, all required documentation, etc.) from the underwriter before loan documents are produced.

 

These documents outline all the terms and conditions of your loan, your rights and obligations, and a whole lot more. Once these are produced they are sent to escrow.

 

After the documents are received and approved by the escrow company they, or perhaps your lender, will arrange for you to sit down with a notary to sign the loan documents. You should plan on 30 minutes to an hour – there are many pages to review and sign. Be sure to bring a valid ID, such as your driver’s license, for identification purposes for the notary.

 

Once the documents are signed then funding can occur, i.e., the lender will wire the loan funds to escrow (the amount you are borrowing). This may happen quickly, or a day or two after signing depending on the lender’s particular process – check with your loan officer to find out what the timing actually is.  

 

It’s best to have the funds received by the escrow company’s bank the day before your scheduled closing, but it is possible here in San Diego County for a loan to be funded on the morning of closing and to have a “special close” later that day.

 

Be aware that any funds required from you – the balance of your down payment and your closing costs – must also be received by escrow PRIOR to them authorizing closing to occur.

 

Visit Home Buying Tips and Advice to view my YouTube Channel playlist of short videos on how to buy a home, then give me a call (760-840-1360) to discuss your home buying needs and questions and how I can help you buy your new home. 

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Topic:
Home Buying
Location:
California San Diego County Carlsbad
Groups:
CALIFORNIA REAL ESTATE
Buyer Information - What Buyers Need to Know in Today's Market
Advice for Buyers
Tags:
mortgages
home buying tips
how to buy a house
how to buy a home
buyer tips and advice
what is funding

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Ambassador
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Paul S. Henderson, REALTOR®,CRS,
RE/MAX Professionals. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

 My question usually is where is funding and when is funding rather then what is funding Jeff Dowler 

Dec 30, 2016 08:23 PM #3
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

This is very informative, Jeff. I know there are many buyers that will nedd this information and may be reluctant ot ask.

Dec 30, 2016 08:32 PM #4
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Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Oh, I love this, Jeff Dowler!  What a great video and you share a wealth of information!  

Dec 30, 2016 08:47 PM #5
Rainmaker
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Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Did you say funding? Well on One level people think very stupid things and I never really thinking the same thing as the other person.

Dec 30, 2016 11:38 PM #6
Rainmaker
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Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Does anybody know why if you click on the names of commenters, at least on the mobile version, there is always an error message now?

Dec 30, 2016 11:39 PM #7
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Steven Nickens
Elite Pacific Properties Maui - Wailea, HI
R(S)GRI ABR, Maui Real Estate Hawaii

Jeff, great article on funding, very informative.

Dec 30, 2016 11:58 PM #8
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Kat Palmiotti
Grand Lux Realty, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

This is a nice summary of the funding process. And I agree, closing is the most exciting day!

Dec 31, 2016 04:57 AM #9
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Sham Reddy
H E R Realty, Dayton, OH - Dayton, OH
CRS

Funding and closing simplified!!! Thank!!!

Be aware that any funds required from you – the balance of your down payment and your closing costs – must also be received by escrow PRIOR to them authorizing closing to occur.

Dec 31, 2016 05:04 AM #10
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Harry F. D'Elia
Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

I always instruct my buyers that their funds must be casheir check and at title 48 hours before closing. No personal checks since that will delay closing.

Dec 31, 2016 05:36 AM #11
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Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Professionals are the keys that unlock all doors Jeff Dowler is a master key

Dec 31, 2016 06:25 AM #12
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Chris Lima
Atlantic Shores Realty Expertise - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

This is great information.  I think we sometimes take for granted that everyone knows this.  I try to explain what will or should happen step by step.  I never take anything for granted.  Years ago, I purchased a house and although we closed(papers signed) the loan had not funded.  I waited an entire weekend to get the keys.  Another lesson....don't close on Friday!

Dec 31, 2016 07:03 AM #13
Rainmaker
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Nick & Trudy Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtors, Philly Main Line

Jeff that is an interesting post as here in PA whilst all the docs need to be ready and reveiwed by the buyer prior to settlement as part of TRID, all the documents get signed at settlement, some lenders wire the funds early, but have to sign off on the final paperwork before releasing the funds to be distributed at settlement, and buyers and sellers when necessary can wire their funds to the title company handling settlement and in some cases bring a title check or certified funds to settlement as well. Seems different in CA and in Carlsbad to here.

Dec 31, 2016 08:20 AM #14
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Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Jeff, Great video with helpful information.  I do need to get more comfortable in front of the camera.  Gheez ... I have so much to say and do not like the camera 

Wishing you a Very

Dec 31, 2016 10:33 AM #15
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

William Feela  - it really is important to keep in mind. I was reminded of this several times recently

So true Debbie Laity  Thanks for the compliment!

Jeff

Jan 01, 2017 07:41 AM #16
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Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

There are many checks required through the process of buying and the last is the most important as it results in signatures and the keys to home ownership.  Happy New Year

Jan 01, 2017 07:59 AM #17
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Those are my questions, too Paul S. Henderson, REALTOR®, Broker, Tacoma Washington  but a buyer the other day didn't understand what it meant and when it happened.

And we might make assumptions that they already know what it is, which is risky, right Debbie Reynolds ?

Jeff

Jan 02, 2017 10:52 AM #18
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Thanks Debe Maxwell  It's important information, especially for first times or people buying here in CA for the first time and coming from states where things are done differently.

I don't think there are any stupid questions in real estate Laura Cerrano 

Thank you Steven Nickens 

Jeff

Jan 02, 2017 10:55 AM #19
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Thanks for the compliment, Kat Palmiotti  Closing is the ulitmate goal!!

Hi Sham Reddy  - thank you for stopping by

Harry F. D'Elia Escrow here will not even accept personal checks for closing. I always recommend wiring - it's faster and safer - as long as the wiring instructions are verified to avoid the scams that are out there.

Jeff

Jan 02, 2017 11:01 AM #20
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Thanks for your kind words Richie Alan Naggar 

Hi Chris Lima   you are so right - we should not take things for granted or assume buyers know, even those who are experienced. It's easy to throw out lingo and to forget it might be an unknown to the buyer. We cannot close here until the loan is funded and funds are received by escrow, who then authorizes closing at the records office.

Jeff

Jan 02, 2017 12:36 PM #21
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

And it was different when I was living in Massachusetts which is an attorney state Nick & Trudy Vandekar 

The more you do, Kathleen Daniels the easier it gets. You would be great, I know it!!

And that's the most exciting part Ed Silva isn't it. It's interesting how it all varies from state to state.

Jeff

Jan 02, 2017 01:25 PM #22
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