The Difference Between A Wet and Dry Funding State

Dry funding”: On the day of loan closing, all parties get together to sign mortgage documents, but all of the paperwork required to officially close the loan doesn’t have to be completed at that time. Most importantly, no mortgage funds are distributed to the seller on that day. (Technically, the loan doesn’t officially “close” until all of the paperwork is completed, approved and mortgage funds are dispersed to the seller.)

· “Wet funding”: Much stricter than dry funding, wet funding requires that all of the paperwork needed to officially close the loan must be completed and approved on the exact day of loan closing. With wet funding, the seller receives funds on the loan closing date or within two days thereafter. So wet funding moves the entire closing process along much faster than dry funding.

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