Closing
Generally speaking, closing is the last step of your home purchase or refinance. It’s when you sign all the finalized documents and either get the keys to your new home or seal the deal on your refinanced mortgage rate.
There are a lot of industry terms that you’ll want to be familiar with before it’s time for you to close. Let’s go over them together.
On this page, we will discuss:
What Happens During Closing?
There are four key steps involved in closing.
Loan signing is the process of signing all of the final paperwork.
Wet vs. Dry States
The terms “wet state” and “dry state” are industry jargon to describe the timing and regulations regarding the closing process.
Wet States
In wet states, the entire closing process occurs while the “ink is still wet”, metaphorically; loan signing, loan funding, recording, and disbursement all happen at the closing table on the day of.
Dry States
In dry states, borrowers have to wait a day or two after signing the loan documents—or until the “ink is dry”—to complete the closing process. The waiting period is intended to ensure that all transactions are valid and legal whilst keeping the deal in progress.
The dry states we are licensed in are:
The Closing Timeline
Different states work to different timelines, to the term “closing day” unintentionally means different things to different people.
Purchase
Around 3 – 7 business days
Wet States
Day 1
The initial Closing Disclosure is issued 3 days prior to the loan signing.
Day 3
Final Closing Disclosure issued*
Day 4
Closing day occurs including loan signing, loan funding, recording, disbursement, and then the homebuyers get the keys.
Dry States
Day 1
The initial Closing Disclosure is issued 3 days prior to the loan signing.
Day 3
The final Closing Disclosure is issued.*
Day 4
Loan signing occurs.
Day 5
Recording and loan funding occur.
Day 6
Closing day occurs including loan disbursement** and homebuyers get the keys.
*There is a mandatory 3-day period between receiving your closing disclosure and the loan signing. This is to give enough time to address any issues and ensure all parties, including the lender, are ready to close on time. You can learn more about the closing disclosure here.
**You can’t fund or disburse on a Saturday, so the overall process may take 7 days. In some dry states, all these steps may happen on the same day.
Refinance
Around 6 – 9 business days
Primary Residences
Day 1
The initial Closing Disclosure is issued 3 days prior to the loan signing.
Day 3
The loan signing occurs at the closing table and 3-business day right of rescission period begins.***
Day 6
The right of rescission period ends and the borrower’s role is complete. The loan recording and funding are completed.
Day 9
Disbursement: cash-out customers receive their funds 3-5 days after the lender has confirmed funding has been received
Investment Properties and Second Homes
Day 1
The initial Closing Disclosure is issued 3 days prior to the loan signing.
Day 3
The final Closing Disclosure is issued.
Day 4
Loan signing occurs and the borrower’s role is complete.
Day 5
Recording, loan funding, and disbursement occur. If you are working with a local title company, this process may happen sooner.
***Refinance customers have the right to back out of the refinance mortgage agreement for up to three days after the loan signing; this is known as the right of rescission. Once the right of rescission has ended, the borrower’s role in the closing process is complete.
The Closing Table
The entire process from signing to disbursement can take around two hours. It takes about an hour two get all the loan documents signed. Then, loan funding and disbursements are transferred via the Federal Reserve wiring system. The Fed’s deadline is 5pm EST, so it is recommended that you get started sooner rather than later in order to get everything done by then.
What To Bring
Who May Be There
What Will You Sign
* The rescission period is only applicable for refinance transactioons.
One Month Post-Closing
The First Payment
Your first mortgage payment will be due on the first day of the first full month after closing. This means, if you close in September, your first mortgage payment will be due on November 1st.
The closing disclosure lists a few prepaid amounts that you bring to the closing table. These costs will cover the interest that accrues between closing and your first payment.
Once your regular mortgage payments kick in, they will reflect the estimated total monthly amount that was quoted on your final closing disclosure.
Loan Transfer
After closing, your loan will be transferred to another servicing company. Everything about your loan will remain exactly the same; the only difference is that you will be making your payments to someone else instead of us.
Once your loan is transferred, you will be notified by us and your new servicer with everything that you need to know in order to continue making your mortgage payments.
Closing Faster
HomeLend Mortgage closes loans with a year-to-date average of 31 days. With a national closing average of 45 – 60 days – according to the The Mortgage Reports – we leave our competition in the dust. You could be closing 2 – 4 weeks faster than our competitors when you work with us.
