“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.
Any 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.