Down payment timing depends on your contract stage, not the closing date
Your down payment is due at signing, not at closing. When you and the seller sign the purchase agreement, you typically hand over the earnest money deposit (usually 1 to 3 percent of the purchase price) to the escrow agent or title company within 24 to 48 hours. This is not the full down payment—it is a show of good faith that you are serious about the purchase.
The rest of your down payment (the difference between your earnest money and your total down payment percentage) is due at closing, which happens 30 to 45 days after you sign the contract. At closing, you wire or bring a cashier's check for the remaining amount to the title company or attorney handling the transaction. The lender also funds the mortgage at this same moment, and all three amounts—your down payment, your earnest money credit, and the loan—go to the seller's account.
If you miss the earnest money deadline, the seller can cancel the contract and keep the deposit. If you miss the closing payment, you do not close on the house, the deal falls apart, and you lose the earnest money. The lender will not fund without proof that you have the cash on hand.
Key Takeaways
- Earnest money (1 to 3 percent of purchase price) is due within 24 to 48 hours of signing the purchase agreement, not at closing.
- The remainder of your down payment is due at closing, typically 30 to 45 days after contract signing, as a wire transfer or cashier's check.
- Missing the earnest money deadline gives the seller the right to cancel and keep your deposit; missing the closing deadline kills the deal entirely.
- Your lender will not fund the mortgage until you prove the down payment funds are in the escrow account or ready to transfer.
- The exact timing and payment method are written in your purchase agreement and closing disclosure, which you receive before closing day.
Earnest money: the first payment, due within two days
When you sign the purchase agreement with the seller, you commit to depositing earnest money into an escrow account. This deposit is typically 1 to 3 percent of the home's purchase price, though it can be higher in a competitive market. A $300,000 home with a 2 percent earnest money requirement means you owe $6,000.
The deadline is almost always 24 to 48 hours after you sign. Your real estate agent or attorney will tell you the exact date and time, and which escrow company or title company to send it to. You send a wire transfer or cashier's check—personal checks are not accepted. If you miss this deadline without written permission from the seller, the seller can cancel the contract and keep the earnest money as compensation for taking the house off the market.
Earnest money sits in escrow untouched until closing. At closing, it is credited toward your down payment. If you put down 20 percent on a $300,000 home, you owe $60,000 total. Your $6,000 earnest money is applied to that $60,000, so you owe $54,000 more at closing.
The final down payment: due at closing, 30 to 45 days later
Closing is the day you sign the final paperwork and the lender funds the mortgage. It typically happens 30 to 45 days after you sign the purchase agreement, though it can be sooner or later depending on what you and the seller agree to. On closing day, you owe the remainder of your down payment in full.
You do not hand cash or a check to the seller. Instead, you wire the funds to the title company or attorney handling the closing, or you bring a cashier's check to the closing table. The title company holds all the money—your down payment, the lender's mortgage funds, and any credits from the seller—and distributes it all at once. The seller receives their net proceeds (sale price minus realtor commissions, taxes, and other costs), you receive the keys, and the lender records the mortgage against the property.
The exact amount due at closing appears on your Closing Disclosure, which the lender must send you at least three business days before closing. This document lists your down payment, earnest money credit, loan amount, property taxes, insurance, and every other cost. If the number surprises you, contact your lender immediately—you have the right to delay closing to review it.
What happens if you cannot pay at closing
If you do not have the down payment funds available on closing day, the closing does not happen. The title company will not transfer the deed, the lender will not fund the mortgage, and the deal is dead. You lose the earnest money deposit, and the seller can sue you for breach of contract, though most do not.
Your lender requires proof that the down payment funds are in your bank account or will be wired in before closing. This is called a "proof of funds" letter, and your bank issues it. If you are borrowing the down payment from a family member, the lender requires a signed gift letter stating that the money is a gift, not a loan you have to repay. If you are selling another property to fund the down payment, the lender may require proof that sale is closing on or before your home closing date.
If you are short on funds, contact your lender as soon as possible. Some lenders allow you to delay closing by a few days. Some sellers will agree to a delayed closing if you ask before the scheduled date. But if closing day arrives and you cannot pay, the deal ends and you lose the earnest money.
Down payment due dates in your contract and closing documents
The exact due dates and payment instructions are written in two places: your purchase agreement and your Closing Disclosure.
The purchase agreement, signed when you make the offer, states the earnest money amount, the deadline to deposit it, and the escrow company's name and address. It also states the closing date (or a range of dates) and confirms that you will pay the remaining down payment at closing.
The Closing Disclosure is a federal form the lender sends you at least three business days before closing. It lists the exact dollar amount due at closing, broken down by down payment, earnest money credit, loan amount, property taxes, homeowners insurance, HOA fees, title insurance, and appraisal fees. If anything on this form does not match what you expected, call your lender and ask for an explanation before closing day.
Wire transfers and cashier's checks: the only accepted methods
The title company or closing attorney will tell you how to send the down payment. The two standard methods are a wire transfer or a cashier's check delivered to the closing table.
A wire transfer is fastest and most common. You contact your bank, provide the title company's wire instructions (routing number, account number, and reference information), and authorize the transfer. The money arrives in the title company's account within hours. Wire fraud is a risk—scammers sometimes intercept wire instructions and redirect the money to a fake account. Before you wire, call the title company directly using the phone number on their official website to confirm the wire instructions are real.
A cashier's check is a check drawn on the bank's own account, not your personal account, so it cannot bounce. You buy it at your bank for a small fee (usually $10 to $25) and bring it to the closing table. The title company deposits it after closing. Cashier's checks are slower than wires but eliminate wire fraud risk.
Personal checks, ACH transfers, and credit cards are not accepted. The title company needs funds that are may provide and cannot be reversed.
If the seller backs out before closing
If the seller cancels the contract after you have deposited earnest money, you get the earnest money back. The escrow agent releases it to you, usually within 5 to 10 business days. This is true even if the seller simply changes their mind—earnest money is refunded if the seller breaches the contract.
The exception is if you fail to meet a contingency. Most purchase agreements include contingencies: inspection, appraisal, and financing. If the home fails inspection and you invoke the inspection contingency to cancel, you get your earnest money back. If the appraisal comes in low and you invoke the appraisal contingency, you get it back. But if you cancel for a reason not covered by a contingency—or if you cancel after all contingencies have been removed—the seller can keep the earnest money.
Frequently Asked Questions
Can I pay my down payment in installments instead of all at once?
No. Lenders require the full down payment to be in escrow before closing. Some lenders allow you to delay closing by a few days if funds are in transit, but you cannot close without the full amount available. If you are short on cash, ask your lender about down payment assistance programs or consider a lower down payment percentage with a higher loan amount.
What if I wire the down payment but it does not arrive before closing?
Contact your bank and the title company immediately. Domestic wires usually arrive within 24 hours, but delays happen. If the wire is delayed, the title company may agree to a one- or two-day postponement. If the wire does not arrive by the new closing date, the deal falls through and you lose the earnest money. Always wire at least two business days before closing to avoid this.
Do I have to bring a cashier's check to closing, or can I wire it?
Ask your title company or closing attorney. Most prefer wires because they are instant and eliminate the risk of a lost check. Some will accept a cashier's check brought to the closing table. Confirm the method with the title company in writing at least one week before closing.
If I am getting a gift from family for the down payment, do I need to prove it?
Yes. Your lender requires a signed gift letter from the family member stating the amount, that it is a gift and not a loan, and that they do not expect repayment. The lender also wants to see the money move from the family member's account to yours, so ask them to wire or transfer it a few days before closing. Keep the bank statements showing the transfer.
What if my down payment is not enough and I need to borrow more?
Tell your lender immediately. Borrowing additional money for a down payment is usually not allowed—lenders want to see that you have skin in the game with your own cash. Your options are to increase your loan amount (which means a lower down payment percentage and higher monthly payments), delay closing until you save more, or walk away. Discuss this with your lender before you sign the purchase agreement.