Here's a quick overview of the Ready to Settle stage.
Where is this stage?
On the Deals board, the Ready to Settle stage is between Mortgage Docs Returned and Settlement Booked.
Behind the scenes
When a bank approves a loan, it sends the loan contract (also known as a Mortgage document) to the client for signing. The client returns the signed document to the bank for certification.
After the bank certifies the loan, it coordinates with all the parties (e.g. solicitors, other lenders, etc.) to book the settlement. BrokerEngine is not directly involved with this process, but we do have a Bank Ready for Settlement checklist to ensure everything on the client end is in place.
Working through our checklist, we normally ensure the client sets up an Authority to Debit account for the settlement funds.
The need to set up an Authority to Debit may not apply to all deal types (e.g. internal refinance).
Let's look at a purchase deal to see when the checklist comes into play. In most purchase deals, the client has a shortfall because the bank does not lend 100% of the purchase price.
On or before the settlement date, the client deposits cash into an account to cover the shortfall. To ensure a smooth transfer of funds, the client authorises the lender to debit the shortfall amount. The deposited amount must equal or exceed the shortfall; otherwise, the settlement could be negatively affected.
When everything is in place, the bank starts the settlement booking process. Learn more about the BrokerEngine Settlement checklist and advice.