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
  • Wet Vs. Dry States
  • The Closing Timeline
  • The Closing Table
  • One Month Post-Closing
  • Closing Faster

What Happens During Closing?

There are four key steps involved in closing.

Loan signing is the process of signing all of the final paperwork.

Loan funding is when the funds are remitted to an escrow account. Escrow holds the funds for safekeeping until all involved parties have completed their parts in the process. If you’ve made an earnest money deposit, the escrow account would hold onto that as well.

Recording is when the grant deed to the property is recorded at the County Recorder’s office. Once the grant deed is recorded, escrow can disburse the funds and close the account (aka “close of escrow”).

Disbursement is when the funds have been paid out to all involved parties. At this point, the mortgage can be considered “closed”. This point is also referred to as “settlement”—when all is settled. 

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:

  • California
  • Oregon
  • Washington

The Closing Timeline

Different states work to different timelines, to the term “closing day” unintentionally means different things to different people.


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. 


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

  • A pen.
  • 2 forms of identification; one must be a government-issued photo ID.
  • Cash to close either via a certified cashier’s check or by completing a wire transfer.
  • Your attorney, if required by your state.
  • Optional: your realtor.

Who May Be There

  • A representative from either your title insurance company or the escrow company, and/or lawyer if required by your state.
  • In a refinance loan, a notary public.
  • In a purchase loan, any involved realtors (optional).

What Will You Sign

  • The final closing disclosure
  • Promissory note – your promise to the lender that you will make your payments.
  • Deed of trust (aka mortgage or security instrument) – guaranteeing your right to live at, make improvements to, resell, and benefit from any equity gained in the property while paying off the loan.
  • Initial escrow disclosure – details all the specific charges you will be responsible for paying into escrow each month according to your mortgage agreement.
  • Mortgage servicing disclosure – lets you know that your lender as the right to sell your loan to another loan servicer.
  • Right to cancel – aka your right to rescind notice – certifying the start of your 3-day cooling off period.*

* 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.

Have Questions? 

Email our closing department at [email protected].