Explain the difference between wet fund and dry fund with respect to real estate loans?

Answer 1

Cool...I never heard of these terms before and I've been involved with real estate for over 20 years in my career. Thanks for teaching me!

Apparently this has to do with 'Settlement', not really loans or mortgages. I found this:

"...You referenced a "wet settlement." This is a term of art, which means that when a person goes to settlement, the lender's funds must be on the table.

Compare this to a "dry settlement," where there is no money available at the closing. Usually, the settlement company or attorney will complete the paperwork, send the legal documents to the lender for review, and then the lender will fund the transaction..."

Found at this site: http://realtytimes.com/rtcpages/20060529_wetsettlement.htm

Looking forward to learning more,
Elise Altergott, Principal Broker
Associate Mortgage: http://www.web-mtg.com/?src=answers
Associate Consulting: http://www.ac-fl.com/?src=answers

Answer 2

When I bought my current house, we had a "dry close". I actually bought my present home in the morning at one title company and then sold my former home the same afternoon at a different title company. At the morning closing (purchase) I did not have all funds in hand because I needed to close on the sale of my former home in order to turn home equity into cash. We signed all documents, but no money changed hands. After selling, I brought a check to the first title company and the deal was settled.

Hope this helps.

Answer 3

Dry Funding