Dry Loan

DEFINITION of 'Dry Loan'

A mortgage where the funds are supplied after all of the required sale and loan documentation has been completed and reviewed. For the buyer and seller, dry loans provide more insurance that the transaction will be completed without problems. Conditions surrounding the requirements of dry loans differ based on state laws.

BREAKING DOWN 'Dry Loan'

In a dry-funded mortgage, the seller will not receive any money until all necessary paperwork has been reviewed by the lending financial institution. Waiting for the documentation to be processed before any funds are transferred ensures the legitimacy of the sale. This process deters fraudulent activities in real estate transactions.

RELATED TERMS
  1. Dry Closing

    A type of real estate closing in which the entire closing requirements ...
  2. Combination Loan

    1. A transaction consisting of two separate loans for the same ...
  3. Future Advance

    A clause in a mortgage which enables the lender to advance funds ...
  4. Low / No Documentation Loan

    A category of loans which generally fall into the Alt-A sector ...
  5. High Ratio Loan

    A loan of any type for which a relatively small down payment ...
  6. Call Loan

    A loan provided to a brokerage firm and used to finance margin ...
Related Articles
  1. ETFs & Mutual Funds

    Financial Institutions: Stretched Too Thin?

    Find out how to evaluate a firm's loan portfolio to determine its financial health.
  2. Personal Finance

    Financing Basics For First-Time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
  3. Personal Finance

    Personal Loans: To Lend Or Not To Lend?

    Attempting to help a loved one with a cash loan can put a strain on your relationship - and your bank account.
  4. Markets

    An Introduction to Government Loans

    Government loans further policymakers' efforts to create positive social outcomes by offering timely access to capital for qualified candidates.
  5. Personal Finance

    The New Mortgage Business: More Than Just Loans

    Many mortgage brokers adapted to the post-subprime environment by becoming loan modification specialists.
  6. Managing Wealth

    Commercial Real Estate Loans

    Obtaining a commercial real estate loan is quite different from borrowing for residential real estate. Here's what to expect and how to get what you need.
  7. Personal Finance

    College Loans: Private vs. Federal

    Not all student loans are the same. Know what you're getting into before signing on the dotted line.
  8. Retirement

    The Reverse Mortgage: A Retirement Tool

    Discover another way to fund your retirement without having to make payments on a loan.
  9. Personal Finance

    How To Combine Two Mortgages Into One?

    If you have a second mortgage as well as a primary, does it make sense to consolidate into a single loan? Here's how to figure it out.
  10. Personal Finance

    Student Loans: Federal Loan Consolidation

    Federal loan consolidation is a helpful tool for converting an unmanageable payment into a manageable payment by combining multiple semester loans into one loan and extending your repayment schedule. ...
RELATED FAQS
  1. What is the difference between a PMI (primary mortgage insurance) loan and a Federal ...

    Understand the difference between a conventional mortgage that requires primary mortgage insurance and a Federal Housing ... Read Answer >>
  2. Which loan should I pay off first?

    I have a $33,000 mortgage at 4.5% interest due in June 2019. I also have $627 in monthly car loan payments for loans that ... Read Answer >>
  3. Are FHA loans assumable?

    Learn the advantages and disadvantages of assuming an FHA-insured mortgage. Assuming loans with lower interest rates can ... Read Answer >>
  4. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ... Read Answer >>
  5. Do FHA loans require mortgage insurance?

    Learn about FHA loans that require borrowers to pay an upfront mortgage insurance premium and subsequent monthly mortgage ... Read Answer >>
  6. What's the average salary of a loan officer?

    Read about the average yearly salary for a loan officer. Learn about what these professionals do and what determines their ... Read Answer >>
Trading Center