Step 29: Wire Your Down Payment
You have made it this far, and there are only two steps left! Home plate is in sight. This step may be one of the more painful ones. It is where you have to part with all your hard earned money. It’s time to pay the down payment and closing costs.
Your mortgage lender will send you an estimate of closing costs and your down payment the morning before closing. Keep in mind that closing costs are generally 2-3% of the purchase price. During this time your mortgage lender will ask you to transfer over a little extra money as well (about $1500-$20000) incase costs are off at all. As an example, if you are buying a million dollar property and you are putting 20% down, your lender will be asking you to transfer $232,000 over. To break it down, $200,000 is for the down payment, $30,000 was for closing costs, and $2000 was the extra buffer. Typically you will not get this figure until the morning before closing and it NEEDS to be transferred the same day. Escrow will be giving you the wire instructions which gives you the account number to wire the funds over to. Make arrangements since you will have to go into your bank to order the wire transfer. Check with your bank when they stop accepting same day wire transfers. Just because your bank is open until 8pm doesn’t mean they will do it for you until then. Most banks stop doing wire transfers in the early afternoon. It is VITAL that you complete the wire transfer the day before closing. If you do not transfer funds on this day, closing will be delayed since the title company does not accept cash or check.
Once the wire transfer has been completed, email us as your broker and your mortgage lender so we can check with title that the funds have been received. DO NOT follow any other wire instructions from any other source unless it is sent directly from the escrow closer at the title company. It cannot be stressed enough that all wire transfer and financial instructions will come via password protected or by encrypted email from the escrow closer. The instructions do not come from me your broker or from the mortgage lender. There are too many scams out there where hackers are obtaining brokers emails and sending over fraudulent emails with wire transfer instructions. BEFORE you transfer any funds, call the escrow closer directly to confirm wire transfer instructions. Never call a number in an email. If you can’t find the number to the Escrow closer, google it or ask us as your broker for help. It cannot be stressed enough how careful you need to be when transfering over funds.
Also, after closing you will receive a check for the overage amount you transferred if it was not needed.