You pay the down payment after your offer is accepted, but the timing splits into two separate moments
The first payment—called earnest money—goes to an escrow account within 1 to 3 days after your offer is accepted. This is typically 1 to 3 percent of the purchase price, and it shows the seller you are serious. The escrow company (or title company) holds this money until closing.
The second payment—the rest of your down payment—happens at closing, which is usually 30 to 45 days after your offer is accepted. At that moment, you wire or bring a cashier's check for the remaining balance. Your lender transfers the mortgage funds at the same time, and the title transfers to you.
Between earnest money and closing, your lender orders an appraisal, a title search, and a home inspection (if you included that in your offer). If anything goes wrong during this period—the appraisal comes in low, the title has a problem, or you fail the final walkthrough—the earnest money may be returned to you, depending on your contract terms.
Key Takeaways
- Earnest money (1 to 3 percent of the purchase price) is due within 1 to 3 days after your offer is accepted and goes into escrow.
- The remainder of your down payment is due at closing, typically 30 to 45 days later, as a wire transfer or cashier's check.
- Your lender will not release mortgage funds until all inspections, appraisals, and title work are complete and clear.
- If the deal falls through for reasons covered by your contract contingencies, earnest money is returned to you; if you walk away without cause, the seller keeps it.
What happens to earnest money between offer and closing
Earnest money sits in an escrow account held by a neutral third party—usually the title company, real estate attorney, or brokerage. You do not control this money, and the seller does not either. The escrow holder releases it only when specific conditions are met or when both you and the seller agree in writing.
If your offer includes contingencies—such as a home inspection, appraisal, or financing contingency—and one of those contingencies fails, your earnest money is returned. For example, if the appraisal comes in $50,000 below the purchase price and your contract allows you to walk away, the escrow holder sends the earnest money back to you.
If you back out of the deal without a valid reason covered by your contract, the seller keeps the earnest money. This is why the contingencies you include matter: they define which problems give you an exit without losing the deposit.
The final down payment at closing and how it combines with the mortgage
At closing, you bring or wire the remaining down payment balance. If you put down 20 percent on a $400,000 house, you already sent $8,000 to $12,000 in earnest money. The remaining $72,000 to $76,000 is due at closing. The title company calculates the exact amount a few days before closing and includes it in your closing disclosure.
Your lender simultaneously wires the mortgage amount to the title company. The title company then pays off any existing liens on the property (the seller's mortgage, property taxes, homeowners association fees), pays the real estate agents their commission, pays the title company's own fees, and transfers the remaining funds to the seller.
You sign the promissory note and mortgage documents at closing, which legally binds you to repay the lender. The deed is recorded with the county, and you receive the keys.
How to prepare the funds and what the lender will ask for
Your lender will ask for proof that the down payment money is yours and has been in your account for at least 2 months. This is called seasoning, and it prevents fraud. Bring bank statements showing the balance and the source of any large deposits. If someone gave you money as a gift, the lender will ask for a signed gift letter stating it does not need to be repaid.
A few days before closing, the title company sends you a closing disclosure that lists every cost and the exact amount you need to bring. Do not wire money until you have this document and have confirmed the wire instructions directly with the title company by phone. Wire fraud targeting homebuyers is common; scammers intercept email and send fake wire instructions.
Bring a cashier's check or arrange a wire transfer. Personal checks are not accepted at closing because the funds must clear immediately. If you wire, call the title company to confirm receipt before you leave the closing table.
What can delay or stop the down payment from being due
If the appraisal comes in below the purchase price, your lender may refuse to lend the full amount. You then have three choices: renegotiate the price down with the seller, bring more cash to cover the gap, or walk away. If your contract includes an appraisal contingency and you choose to walk away, earnest money is returned.
If the title search uncovers a lien, judgment, or other claim against the property, the seller must clear it before closing. This can delay closing by weeks. Your earnest money remains in escrow until the title is clean.
If you fail the final walkthrough—meaning the seller removed fixtures or the property is damaged—you can refuse to close. Earnest money is returned if your contract gives you this right.
What happens if you cannot pay the down payment by closing
If you do not have the funds at closing, the closing does not happen. The lender will not fund the mortgage, and the deal terminates. The seller keeps the earnest money as compensation for the time the property was off the market.
If you discover a shortfall a few days before closing, contact your lender immediately. Some lenders allow you to increase the loan amount if you have not yet locked in the rate, but this requires a new appraisal and underwriting review. This process takes time and may not be possible if closing is imminent.
The best protection is to confirm your down payment funds are available and seasoned well before you make an offer. Your lender can pre-approve you based on the down payment you actually have, not the amount you hope to have.
Frequently Asked Questions
Can I borrow the down payment from someone else?
Most lenders do not allow borrowed down payment funds. The money must be your own savings or a gift. If it is a gift, the giver must sign a letter stating it does not need to be repaid. Some lenders allow down payment assistance programs, but these have specific rules about the source of the funds.
What if the seller wants to delay closing after I have paid earnest money?
Your earnest money stays in escrow until closing happens or the deal terminates. If the seller delays closing without cause, you can usually force them to close by a specific date stated in your contract, or you can walk away and get earnest money back. Check your purchase agreement for the closing deadline.
Do I get earnest money back if I change my mind?
Only if your contract includes contingencies that allow you to walk away. If you back out for a reason not covered by your contingencies—such as simply changing your mind—the seller keeps the earnest money. This is why home inspection and financing contingencies are important.
How much should I bring to closing besides the down payment?
Bring the down payment amount shown on your closing disclosure plus a small buffer for unexpected fees. You will also need a government-issued photo ID. Ask the title company for the exact amount a few days before closing so there are no surprises.