What type of settlement occurs when loan funds are not available on the same day as closing?

A dry settlement occurs when the loan funds are not available on the same day as the closing. In this type of settlement, the buyer can take possession of the property without having immediate access to the funds that will be used for the purchase. This can happen in situations where there are delays in fund disbursement or issues with finalizing the loan.

After closing, the completion of the transaction is dependent on the loan funds being transferred at a later time, which means that the buyer must wait for their mortgage funding before the sale is fully completed. This is contrasted with a wet settlement, where the funds are available immediately, allowing the transaction to be fully concluded during the closing meeting itself. Understanding these terms is crucial for mortgage loan officers, as they provide clarity on the timing and finality of real estate transactions.