Now it's time to part with those hard-earned dollars, but keep in mind that you will soon get to move into a new home! Usually the morning on the business day before your closing date, your mortgage lender will email you a close estimate of the amount of money needed to close as well as the wire transfer instructions. This amount will include your down payment, your closing costs (2-3% of your purchase price), and a little extra ($1,500-$2,000). For example if you are purchasing a home for $500,000 and are paying 20% down payment, expect to pay $100,000 in down payment, plus up to $15,000 in closing costs, and $2,000 for extra costs (any overages will be refunded the next day), or $117,000 in total. You will pay these funds in one lump payment the day before closing. Amounts under $50,000 can be paid for with a cashier’s check, however, amounts over $50,000 must be wire transferred.
Please be careful to read any wire transfer instructions carefully and verify that they are from your mortgage lender as scammers targeting real estate wire transfers is very common. It is highly recommended to call your mortgage lender to verify the email and instructions. The title company cannot accept your funds the day of closing.
Plan to take an hour or two as early in the day as possible (a long lunch break) to avoid the wire transfer cut off time at your bank. Usually this time is before their closing time. It is critical that you complete this transfer before the cut-off time to ensure that the funds are transferred the next day and that your scheduled closing can occur successfully. If you do not make the cut-off time, your closing will be delayed. The title company cannot take a check the day of closing.
Make sure you have a clear understanding of your bank’s wire transfer procedures. Typically, you have to go into the bank personally to initiate the wire transfer. You should find out how long it takes to complete and what the cut off time is for wire transfers. Wire transfer cut off times are not the same as bank hours and are usually a few hours prior to their closing time. You will need to make sure that you schedule to take time off (a long lunch break) the day before closing to make your wire transfer. Once you’ve done the wire transfer, email me and mortgage lender so we can make sure the title company received the funds. If you miss the cut off time and the funds do not get into the title company’s account the next day, your closing will be delayed.