If you are buying a home and are obtaining a mortgage remember two things: First, you will not receive the loan amount at closing. You will receive the loan amount minus expenses related to the loan. Accordingly, if you borrow $100,000 you will not receive $100,000-you will receive $100,000 minus expenses such as origination fees, commitment fees, appraisal fees, credit report fees, prepaid interest, the set up of escrow accounts for taxes and insurance, etc. The amount you actually have available to spend is known as your “net proceeds.”

Second, in most instances, we will not have your net proceeds amount until the day before you close or the day of the closing, because banks calculate those numbers in the order in which loans are closing. We will need the net proceeds number in order to tell you what bank checks you will have to bring to the closing.

Since we won’t have the net proceeds amount until just before  closing, approximately two weeks before you think you are going to close, you need to make sure that you have more funds than what you will need available. Those funds must be in a checking account maintained in a “brick and mortar bank branch” which you can walk into and quickly obtain bank checks for your closing.

Accordingly, if you are using funds for closing which are in a pension or 401K, or an investment account such as a Vanguard fund, a Fidelity account, a Schwab account or an on line bank account (Ally or Capital One 360, for example) you must move those funds into your checking account well before closing. If you wait until the last minute to move funds you may not be able to get the certified funds you will need in time for your closing.

Closings can be stressful. You can reduce that stress dramatically by moving the money you will need for closing into your checking account, well in advance of your projected closing date.