The down payment timeline: when money changes hands
Your down payment is due in two separate moments, not one. The first chunk—called earnest money—goes to the escrow agent within one to three days after your offer is accepted. The second and much larger chunk is due at closing, which typically happens 30 to 45 days after your offer is accepted, though it can be as short as 7 days or as long as 60+ days depending on what you and the seller agree to.
Earnest money is usually 1 to 3 percent of the purchase price. It sits in an escrow account held by a neutral third party—often the title company or a real estate attorney—and proves to the seller that you are serious. If you back out for a reason the contract allows (like a failed inspection), you get it back. If you walk away without a valid reason, the seller keeps it.
The rest of your down payment—the amount that gets you to your target percentage (typically 10, 15, or 20 percent of the purchase price)—is due at closing. This is when you sign all the final paperwork, the lender funds the mortgage, and the deed transfers to your name.
Key Takeaways
- Earnest money (1 to 3 percent of purchase price) is due within one to three days after your offer is accepted and held in escrow.
- Your full down payment is due at closing, which happens 30 to 45 days after offer acceptance unless the contract specifies otherwise.
- The closing date is negotiable—you can ask for more time if your lender needs it or less time if you want to move faster.
- Your lender will tell you the exact dollar amount due at closing at least three days before the closing date on a Closing Disclosure form.
How earnest money works and where it goes
When your offer is accepted, your real estate agent or attorney will give you instructions to wire or transfer the earnest money deposit. The deadline is usually one to three business days, though some contracts say same-day. Missing this deadline can give the seller grounds to cancel the contract, so treat it as firm.
The money goes into an escrow account, not to the seller directly. The escrow holder—typically the title company, a real estate attorney, or sometimes the real estate brokerage—keeps it separate and untouched until closing. At closing, the escrow holder applies your earnest money toward your down payment. So if you put down $10,000 in earnest money and your total down payment is $50,000, you only need to bring $40,000 more at closing.
If the deal falls apart, what happens to earnest money depends on why. If the inspection reveals major problems and your contract includes an inspection contingency, you get it back. If the appraisal comes in low and your contract has an appraisal contingency, you get it back. If you simply change your mind with no valid reason, the seller usually keeps it. Read your contract carefully to understand which scenarios protect your earnest money.
The closing date and what determines it
Closing typically occurs 30 to 45 days after your offer is accepted. This window gives the lender time to order the appraisal, verify your employment and finances, order the title search, and prepare all closing documents. It also gives you time to complete your home inspection and get a final walkthrough.
The exact closing date is negotiable. If your lender is slow or you need more time to arrange financing, you can ask the seller to push closing back. If you want to move in faster, you can propose an earlier date—though the seller has to agree, and your lender has to be able to meet it. Some cash buyers close in 7 to 14 days; most financed purchases need at least 21 days.
Your purchase contract will state the target closing date. If either party cannot close by that date, they typically have a few days of grace (often called a "closing extension period"), but this varies by contract and state. After that grace period, the party that is not ready can be in breach of contract.
What you need to bring to closing
You do not bring a personal check or cash to closing. Instead, you arrange a wire transfer from your bank to the title company or closing attorney, usually the day before closing or the morning of. The title company will send you wiring instructions and the exact dollar amount due.
At least three business days before closing, your lender must send you a Closing Disclosure form that itemizes every cost: your down payment, loan amount, interest rate, property taxes, homeowners insurance, HOA fees, title insurance, appraisal fees, and more. This is your chance to catch errors. Review it carefully and call your lender or title company if anything looks wrong.
Bring a government-issued photo ID to the closing appointment. You will also need proof of homeowners insurance—your insurance agent will provide a binder showing coverage starts on closing day. Some closings also require a cashier's check for a small amount (earnest money that was not held in escrow, or final utility adjustments), so ask the title company ahead of time.
When your lender releases the mortgage funds
Your lender does not hand you money at closing. Instead, the lender wires the mortgage amount directly to the title company or closing attorney. This happens on closing day, usually in the morning or early afternoon. The title company then uses that money plus your down payment to pay off the seller's existing mortgage, pay all the closing costs, and transfer the remaining balance to the seller.
Until the lender's funds arrive, closing cannot happen. If there is a delay—a missing document, a last-minute underwriting issue, a wire transfer that did not go through—closing gets pushed. This is rare but not unheard of. Your lender will notify you and the title company immediately if there is a problem.
Once all funds are in the title company's account and all documents are signed, the title company records the deed with the county and you officially own the house. This recording usually happens the same day or the next business day.
What happens if you cannot pay by the closing date
If you cannot come up with your down payment by closing, you have limited options. You can ask the seller to delay closing, but they are not required to agree. You can ask your lender for a larger loan amount, but this requires a new appraisal and underwriting review, which takes time. You can ask family or friends for a loan, though your lender may require documentation that it is a gift and not a loan you have to repay.
If closing is scheduled and you cannot perform, you are in breach of contract. The seller can keep your earnest money and sue you for additional damages. This is rare—most buyers who run into trouble either delay closing or walk away before the contract is signed—but it is a real consequence. Do not commit to a closing date until you are certain your down payment will be available.
Down payment timing if you are selling another house
If you are buying a new house before selling your current one, your down payment is still due at closing on the new house, regardless of when your old house sells. You cannot use the sale proceeds from your current home to fund the down payment on the new one unless you close on the sale first.
Some buyers bridge this gap with a bridge loan—a short-term loan that covers your down payment on the new house until your old house sells and you can pay the bridge loan back. Bridge loans are expensive (interest rates are higher, and there are origination fees) and are only worth it if you are certain your old house will sell quickly. Most buyers instead arrange a larger down payment from savings or ask the seller of the new house for a delayed closing until the old house sale closes.
Frequently Asked Questions
Can I wire my down payment the day of closing or does it have to be before?
Most title companies require the wire to arrive by 2 p.m. the day before closing, or by 10 a.m. on closing day. Ask your title company for their exact deadline. If your wire does not arrive in time, closing will be delayed. Do not wait until closing day to send it.
What if my appraisal comes in lower than the purchase price?
If the house appraises for less than you agreed to pay, your down payment percentage goes up. If you agreed to put 20 percent down on a $300,000 house ($60,000) but it appraises for $280,000, you now need to put down $56,000 to keep a 20 percent down payment. You can renegotiate with the seller, pay the difference, or walk away if your contract has an appraisal contingency.
Do I get my earnest money back if the seller backs out?
Yes. If the seller cancels the contract or fails to close, you get your earnest money back in full. The title company or escrow holder will return it to you within a few business days of the cancellation.
Can the seller ask for the down payment before closing?
No. The seller receives payment only at closing, when the deed transfers. Earnest money goes to escrow, not to the seller. If anyone asks you to send money directly to the seller before closing, that is a fraud warning sign.
What if I do not have all my down payment saved yet?
Do not make an offer until you do. Your lender will verify your down payment funds before closing and will ask for bank statements showing the money has been in your account for at least two months (to prevent you from borrowing it). If the funds are not there, your loan will not close.