How to transfer money for closing on a house

If you’re getting ready to close on a house, you’ll likely need to fork over money for the closing. For many buyers, this means sending one of the largest payments they’ve ever made (often tens or even hundreds of thousands of dollars) to a title or escrow company.

But moving a large amount of money on a tight deadline can be tricky, especially when you consider all the stories about bank fraud or delayed closings.

The good news for home buyers is that transferring money at closing is pretty standard these days. Understanding the steps, timing, and security measures can make sending money for a home purchase a safe and efficient process.

What does it mean to transfer funds at closing?

Transferring funds at closing means sending electronic funds from your bank account directly to the title or escrow company handling your home purchase.

For standard bank transfers, it may take several working days for the money to be fully processed. But with a bank transfer, the money is transferred quickly, usually within the same business day, and the money becomes available as soon as it is received, essentially treating the transaction as cash.

Because the funds are verified, guaranteed, and typically irreversible once shipped, many title companies prefer wire transfers for larger financial transactions such as real estate purchases.

If you transferred your earnest money deposit earlier in the purchasing process, the final transfer at closing often includes the following:

• The remainder of your deposit
• Closing costs
• Prepaid property taxes and homeowners insurance
• Lender fees and escrow adjustments

Transfer money at closing (step by step)

When transferring money for a home closing, there are some important details you should pay attention to to ensure the process goes smoothly and securely.

Step 1: Check the thread instructions

Your title or escrow company will send written wiring instructions, usually via a secure portal or possibly an encrypted email. These usually contain all the information you need to make the transfer:

• Bank name
• Routing number (ABA number)
• Account number
• Beneficiary name
• Address or file number of the property for memo/reference

This is where fraud prevention is most important. Most wire fraud happens by posing as your agent or title company via email, saying the information has changed or you need to act quickly.

Before transferring money, you should always do the following:

• Call the title company using a phone number from the official website.
• Read the routing and account numbers out loud and confirm them.
• Ask if the wiring instructions have been changed at all.

Example: “Hello, I am [Name]and I’m about to transfer money for my closing on [address]. I would like to verify the account and routing numbers I received.” Read out the numbers. Proceed with the transfer only if the numbers match.

Step 2: Check your bank’s transfer policy in advance

Each bank has its own rules, regulations and limits when it comes to wire transfers. If online transfers are an option, they may have a daily limit (i.e. $25,000), and your cash to close could be much higher.

If your closing amount exceeds the daily limit, you may need to request a temporary increase, split the transfer (if escrow allows) or visit a physical branch to initiate the transfer.

Before your closing deadline, make sure you:

• Make sure the money is ready in the account from which you are transferring money
• Know your bank’s transfer closing deadlines (usually between 2 p.m. and 4 p.m.)
• If you visit a physical branch, make sure you have two forms of identification on hand

Transfer costs: Expect to pay a small fee of $15 to $50 for a domestic outgoing transfer (international transfers may be higher). When you speak to your bank, confirm whether the charges will be debited from your account separately or included in the transfer total.

Step 3: Review your closing statement

Your order must be submitted at least three working days before closing time lender will send your closing statement or settlement statement. This document shows your final loan terms and the exact amount you will need to bring to closing under the “cash to closing” line.

Important information for assessing the closing statement:

• Confirm that your earnest money deposit has been credited.
• Make sure any seller credits are shown.
• Ask your lender about any last-minute adjustments.
• Check to see if your lender requires funds to be received before signing.

Do not estimate or round the number. Transfer the exact amount stated unless your escrow officer instructs otherwise. If there are any discrepancies, they can usually be resolved at the closing table. You will either get a refund if the transfer was too large, or sometimes a small credit may be owed if last minute adjustments were made.

Step 4: Start the transfer 24-48 hours in advance

Transfers initiated after your bank’s cut-off time may not be delivered until later the next business day. If deadlines are tight or there are weekends or holidays between your closing date, you can take that into account when timing your transfer.

For the smoothest closing:

• Send the thread at least one working day before closing time.
• Start the transfer as early in the day as possible.
• Avoid wiring on Friday if you close on Monday (weekend delays may occur).
• Please take public holidays into account and plan to initiate your transfer accordingly.

Although many domestic transfers are processed on the same day, delays can occur due to fraud checks, large amount verification or even bank processing queues. Having a little cushion will ensure that your money reaches the closing table neatly and on time.

Step 5: Check if the money has been sent (and received)

Once you have transferred the funds for the closing, ask for a receipt with the transaction reference number. Then call your escrow officer to confirm that they have received the funds.

Don’t assume that everything has been handled automatically. Some title companies must confirm receipt before recording documents, so early confirmation will prevent unexpected delays.

How to Prevent Wire Fraud at Closing

Wire fraud is one of the biggest risks during the closing process, but it can also be prevented.

Scammers can gain access to a broker or title company’s email account and send persuasive emails with bogus wiring instructions, hoping buyers will send money without verifying the details. But title companies typically don’t change wiring instructions mid-transaction.

Here’s how you can protect yourself:

• Always check wiring instructions by telephone using a trusted number.
• Be wary of last-minute changes or urgency.
• Watch out for unusual email addresses (like @gmail or @yahoo) or spelling mistakes.
• Use a trusted computer and a secure Wi-Fi network when transferring online.
• Please check every number and detail before sending.

If you think you have sent money to the wrong account, contact your bank immediately. Ask them to initiate a recall and notify your title company immediately. Acting quickly increases the chances of recovery, but most transfers are final and cannot be reversed.

Should you use a check or wire transfer to close?

When you close on a house, the money you bring shouldn’t just be in any form.

That’s because title companies must meet what are often called “good fund” requirements. In short, this means that the funds used to close the transaction must be verified and immediately available before the transaction can be completed.

Personal checks usually do not meet this standard because they can take days to clear. That’s why buyers typically bring in closing funds in two ways:

• A bank transfer
• A check from a cashier

Both are considered safe and reliable because the funds are confirmed.

For larger amounts, bank transfers are often preferred as they can be verified quickly and do not require the physical transportation of a cheque. Checks may still be allowed for smaller amounts depending on your title company’s policy.

Because these requirements vary, it is always best to ask your title company in advance which method they prefer.

Common problems that can occur with bank transfers

The money has not yet been fully released: Connecting wires usually takes 1 to 4 hours. If it’s been longer than that, call your bank and provide your reference number so you can check it hasn’t been noticed by the fraud department. If the money has recently been transferred to the account, the bank may restrict outgoing transfers until the money has been officially cleared.

The name is wrong or misspelled: Normally the money will flow in as long as the account and routing numbers match. However, some banks are stricter than others. Always use your name exactly as it appears on your ID.

The money was not transferred on time: If you miss the line, the title company may still be able to have you sign the paperwork (this is called signing into escrow). You won’t get the keys until the money officially arrives. Otherwise, the signing appointment may be postponed or your mortgage rate lock may even be affected.

Transferring money at closing doesn’t have to be complicated

Transferring a large sum of money to purchase a home can seem difficult, but with a bank transfer it is easier than most buyers realize. Make sure the money is available in the account you want to transfer money from as quickly as possible, taking into account your bank’s transfer policy and always Verify wiring instructions in person or by telephone with your title company before sending.

Follow these steps and closing day will go a lot smoother.