At the home closing stage, the title company demands the use of certified funds. Both cashier's checks and wire transfers are feasible options. But is one method inherently safer and more advantageous than the other? Let's delve into these alternatives and elucidate your choices.
Understanding the Importance of Certified Funds
A title company takes on various roles during your home-buying journey. Their responsibilities range from insuring titles and supervising real estate transactions, to potentially managing the transfer of funds between parties. These companies cannot legally record a deed until a cash equivalent is received. In mortgage terminology, a deed is an essential document demonstrating ownership of your property, which you should keep for as long as you possess the home.
The title company involved in the closing process symbolizes both buyer and seller interests, guaranteeing the deed will be recorded once the buyer deposits the necessary funds. The seller subsequently receives their due funds. In this context, certified funds like wire transfers or cashier's checks offer the title company a method to ensure both parties that their funds are secure and trustworthy.
Choosing a Cashier's Check
To obtain a cashier's check, as the account holder, you must visit your bank physically, provide identification, and ask the teller for a cashier's check. The bank then confirms whether you have ample funds in your account to cover the check before issuing you an official bank check. This process might sound simple, yet there could be obstacles, like your bank requiring advanced notice for large withdrawals. It's advisable to contact your bank ahead of time if you're considering this method and have questions, rather than waiting until the day before closing.
Opting for a Wire Transfer
If a personal bank visit is unfeasible or you prefer electronic transactions, wiring the funds may be a better choice over a physical check. In banking parlance, a wire transfer is an electronic movement of money, often between different banks or credit unions. Typically, you can initiate wire transfers via phone, in person, or in some instances, online. Be aware that wire transfers, though electronic, aren't instant and can't be revoked.
Protecting Against Wire Fraud
Generally, fraudsters access the email accounts of title companies, real estate agents, or mortgage bankers to track upcoming home purchases for closing. They impersonate the title or escrow agent involved in the transaction, making wire fraud detection challenging. However, signs of a potential threat include unfamiliar team members requesting personal information, sudden changes in money transfer directions from your "agent," and suspicious emails lacking company details, letterheads, and email signatures.
If you believe you or someone you know has been a wire fraud victim, contact your local IRS field office immediately and file a report at the IRS' Internet Crime Complaint Center. Be prepared to offer detailed information, such as the victim and subject's identification details, transaction specifics, victimization description, and any other pertinent information to support your complaint.
Weighing Your Options
Every payment method comes with its advantages and disadvantages. Thus, you should consult your real estate agent and title company to discern the most suitable choice for your circumstances.
Are you seeking more insights into financial readiness for home buying? Don't hesitate to reach out to a Mortgage Advisor at CrossCountry Mortgage for comprehensive guidance.
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