Finally, closing day is almost here! Before you get the keys, you will need to bring money to cover closing costs and all other fees associated with the purchase. You will bring this amount to closing in the form of a certified payment type: wire transfer, certified check, or cashier’s checks. Wire transfers are usually the method preferred by lenders. Here’s how to wire money for closing and do it safely.
Cash to Close
A few days before closing on your new home, your loan officer will send you a “cash to close” statement. This total is the amount you will owe at closing.
Cash to close includes all fees and payments associated with buying the house:
- Closing costs
- Down payment
- All associated fees
Once you have your “cash to close,” it’s time to secure your payment method. Even though it’s called “cash to close,” don’t bring actual cash. Most lenders and title companies will not accept cash at the closing table. Your lender should give you specific instructions for obtaining the funds, but most will require a certified check, cashier’s check, or proof of wire transfer.
Wire Transfer or Cashier’s Check?
At closing, the title company will require you to bring verified funds, usually a cashier’s check or proof of wire transfer. While both methods are considered secure, wire transfers are typically more convenient. You can usually request and initiate a wire transfer with a simple phone call. Some banks even allow customers to request wire transfers online.
Cashier’s checks, on the other hand, usually require an in-person visit to your financial institution. The bank will verify your identity and confirm that you have enough money in your accounts to cover the required check total.
Many lenders prefer wire transfers because it essentially cuts out the middle man. Rather than waiting for a check to clear and money to deposit into an account, wire transfers instantly transfer funds directly from one account to the other. (And by “instantly,” we mean that once the transfer is approved and vetted, the funds appear instantly in the recipient’s account).
Contact your lender or title company if you are uncomfortable with a wire transfer or still unsure how to wire money for closing. They can give you more detailed information about accepted payment methods.
How to Wire Money for Closing
A wire transfer is immediate and requires no advanced planning, right?
Even though it’s an electronic funds transfer, this process can take up to two days to complete. International transfers can take even longer. A wire transfer is a process. Be sure to give yourself and your financial institution plenty of lead time. If the wire transfer isn’t complete before your closing time, the deal will be delayed.
Here’s the wire transfer process:
- Receive your cash to close statement
- Choose your provider. In most cases, you will request a bank-to-bank transfer, where your financial institution will wire funds directly to the recipient’s bank.
- Contact your financial institution and ask how to wire money for closing. Some banks require you to request the transfer in person; others allow you to start the process online or over the phone. Start the process at least three days before closing to give the bank plenty of lead time.
- Gather all required information for the wire transfer:
- Name of recipient or institution receiving funds
- Recipient’s account number
- Recipient’s bank routing number
- Phone number or address of the recipient’s financial institution
- Using this information, fill out the wire transfer request form. Carefully input all information. Double-check that all numbers are transposed correctly. Even one wrong number could mean your money gets transferred elsewhere – and there is no way to get it back once it’s gone.
- Initiate the transfer. Get a confirmation and tracking number. You will get a receipt for the transaction; keep this receipt with your other important paperwork.
- Verify delivery with the recipient.
Wire transfers are not reversible, so double- and triple-check all the information, including sender and recipient information and the recipient’s address, before initiating the transfer.
Are Wire Transfers Safe?
Federal regulations require both wire transfer senders and recipients to verify their identities, including their addresses, before funds are sent. There are plenty of safeguards in place for wire transfers, making it one of the most secure ways to transfer funds at closing.
Even with all the safeguards in place, some scammers will try to get your hard-earned money. Watch out for these common scams:
- An email or phone call saying there has been a change in the process or the total you need to send.
- Someone asking you to wire money to a different account than the one listed on your closing instructions.
- Emails or phone calls asking you to “verify” your wire instructions, including account numbers or recipient information.
If you receive any communication about your wire transfer, be sure to contact your bank directly and verify the information.
Once the wire transfer arrives in the recipient’s account, closing can move forward as expected. Congratulations!