Which type of settlement allows for immediate disbursement of loan funds?

A wet settlement refers to a closing process in which the funds from the mortgage loan are disbursed immediately at the time of settlement. This allows the buyer to receive the loan funds, enabling them to complete the purchase of the property right away. The term "wet" is derived from the fact that all necessary documents are signed and executed with the actual transfer of funds taking place on the same day, which is common practice in real estate transactions.

This immediate disbursement is beneficial because it facilitates a smoother transaction, allowing the buyer to take ownership of the property without delays that could arise from waiting for funds to clear. In contrast, a dry settlement would involve a delay, where the closing occurs without immediately disbursing the loan funds, leaving the buyer without access to the funds until certain conditions are met, such as document recording. Therefore, wet settlement is crucial for ensuring that all parties involved can finalize the transaction swiftly and efficiently.