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Short On Funds For Closing Day

Short on Funds For Closing Day? Do This!

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The completion day, commonly known as closing day, is the day when the property is transferred to the buyer’s name from the seller. On this day, the buyer pays the funds and gets the keys.

It may sound very simple, but it is not. The closing day involves many people, and delays are part of the process. However, this blog will help you to answer what happens on the closing day when buying a house. Also what to do when you are short on funds for closing.

There is a lot to organize before completion day that your realtor will have to help you facilitate. So, this blog will help you prepare for the closing day.

mortgage on disability incomeWhat is Closing or Completion Day?

Closing day or completion day is a money day for the buyers. Buyers are required to bring the remaining funds calculated by the notary or lawyer to be able to close on the property and successfully transfer the property.

In simple words, it means that the buyer will sign and review documents prepared by the lawyer with regards to their mortgage loans, down payment, closing costs and purchase price. With this, the property title and ownership rights will be transferred from the seller to the new buyer name.

This process is handled by the buyer’s legal representative and the seller’s legal representative. However, the mortgage broker, realtor, realtor’s brokerage for both parties are also actively involved in providing the notary or lawyer with proper documentation and mortgage funds.

What Happens on Closing Day?

The process can be different depending on the province you live in. But as a general rule, the following are the steps you will need to go through as a buyer when buying a house:

  • Sign a variety of documents prepared by their notary or lawyer relating to the mortgage loan and the purchase of the home
  • The buyers are given the monies needed to “close” on the property (such as the remaining down payment and closing expenses), and they must then present a bank draught for the closing amount to the notary/lawyer in order to complete their acquisition.
  • The notary or lawyer will register the purchase with the Land Title Office once all funds have been collected to successfully finalise the transaction. The new home buyer will be recorded as the property’s official owner!
  • Once the seller’s mortgage debt and closing charges (such as commissions and lawyer fees) have been paid off, the seller will get any proceeds from the transaction.

It’s fairly uncommon for the notary or lawyer to have all of the documentation and final numbers ready before the closing date, which is normally 1-4 days in advance. If this is the case, the notary or lawyer may schedule an appointment with you to sign the documents and provide the bank draught soon before the closing date. This ensures a smooth closing day and that the title is transferred before the end of the day.

Read More: Loans on Disability Income: Payday, Instalment & Vehicle Title Loans

What Happens When You Don’t Have Enough Money on the Closing Day?

The sale will not be completed until all of the funds have been received. It will not close if you do not have sufficient funds. Any earnest money you put up will be forfeited.

What happens next will also be determined by the conditions of the contract. You could face legal action for non-performance, or the Seller could simply release everything and go on to the next buyer. There could be additional expenses from the title business, attorneys, and so on.

You know the process now and what happens on the closing day. But what if you are short on funds? Is there any solution to this? Here is your answer:

What to Do When You Are Short on Funds for the Closing Day?

Financial problems can cause mortgage delays. So, make sure you have a backup plan if anything untoward happens. Here are a few ways you can use to keep your finances healthy on the closing day.


  • One best way to do this is to refinance. You can ask the credit card company to accept a settlement when paying off debts. If you have a history of not making payments on time, the credit card companies are mandated to settle it. This can be settled as low as 50 cents or in a dollar. Don’t know how to do it? Just reach out to us and we will devise the best way for you.
  • Secondly, you can ask your lender to increase your loan amount. It is important to mention here that the maximum is 80% loan to value. If you are using a mortgage investment corporation, they can go above 80% as well – depending on their comfort levels. Ask us how and we will guide you in detail.
  • Thirdly, you can borrow a small personal loan. However, before taking the loan, consult with your broker first and fix your interest ratios.
  • Fourthly, if the lender is requesting some debts to be consolidated as part of the loan, you can request your broker to review the debts. Remove some of them from the payoff list.
  • Fifthly, you can borrow funds from family and friends.
  • Sixthly, you can ask your broker to convert the fee into a payment plan and offer to sign a promissory note with a lean on the title.
  • Lastly, ask the lender (if it’s a B lender) to increase the rate and reduce the fee.


  • You can gather funds from family only but must be documented as gifted. Learn about the mortgage gift letter here.
  • If you have enough on the ratios, you can borrow funds from a personal loan or an unsecured line of credit.
    Keep in mind that the down payment needs to be verified with bank records dating back 3 months.

The Bottom Line

We understand that being short on funds for the closing day is concerning and you may be worried about the closure day. At its most basic level, the procedure can be intimidating, but we’re here to make sure everything goes as smoothly as possible. Simultaneously, the more you prepare for the close, the better.

If you have any questions before closing, don’t hesitate to call your Lionsgate Financial Group professional. We’re dedicated to becoming your long-term lender, and we’re delighted to provide knowledge and support while you complete this significant transaction.



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