Step 22 to Buying a Home: Get Your Down Payment Ready
Now that we’re getting closer to your closing date, it’s time to get your down payment ready.
Remember that in addition to the down payment you need approximately 3% of the purchase price on top of the down payment available in cash for the closing costs.
If any of these funds are going to be gifted to you from a family member, you need to let your mortgage lender know right away so he or she can get approval from the underwriter for the funds.
It’s best if the down payment and closing cost funds are transferred into one account. This account must be disclosed to your mortgage lender and you must let him or her know this is the account you’re going to be using for the down payment as the funds have to be tracked.
The lender is required to give you a written credit estimate three business days before the loan can fund. Now your Escrow Officer will give you an estimate of the amount of money needed to close as well as the wire transfer instructions. Your Escrow Officer will also ask you to transfer extra money, usually $1,000 – $2,000 on top of the estimate, just in case there are any surprises or mistakes found at. You’ll wire transfer these funds in one lump payment the DAY BEFORE CLOSING. It is crucial that these funds be wire transferred the day before closing at the latest as the Title company cannot accept it the day of closing.
PLEASE NOTE: There have been several reports of hackers and scammers lately trying to divert (ie. steal) closing funds to their personal accounts and away from the title companies. Generally, the wire transfer instructions will be emailed to you from your Escrow Officer. DO NOT FOLLOW WIRE TRANSFER INSTRUCTIONS SENT FROM ANYONE ELSE. ONLY FOLLOW WIRE TRANSFER INSTRUCTIONS SENT TO YOU BY ME, YOUR ESCROW OFFICER OR YOUR MORTGAGE LENDER. If you want to verify that the wire transfer instructions you received are legit, call your Escrow Officer and verify them via phone.
Go back to Step 21 to Buying a Home: Hook up your utilities, go forward to Step 23 to Buying a Home: Attend the Walk Through.