How to Wire Money for Closing

By PropertyClub Team
Aug 11th 2022
Closing on a home also means paying the seller, and sending funds via a wire transfer is fast and convenient. Here’s how wiring money works, including tips on staying safe and protecting yourself from scammers. 

Let’s say you’re getting ready to close on your house. This day is one you’ve been anticipating for a long time. You will likely need to wire funds to cover the remaining fees and the down payment to close in preparation for the closing. How does this work? Read on to learn more about dealing with a wire transfer for closing when purchasing your home.

hash-markWhat is a Wire Transfer?

A wire transfer is a way to send money from one financial institution to another through electronics. Most of the time, you only use them for large cash amounts such as housing payments. 

Typically, there is a processing period when dealing with a wire transfer for closing. However, most wire transfers use mortgage wire transfers to speed up the process. 

Unfortunately, wire transfers can be the target of scammers working online to steal from you. Let’s talk about how to safely wire funds for closing when the time comes.

hash-markWhen Do You Wire Money For Closing?

You will typically wire the money one to two business days before the closing. The exact day will be in your closing disclosure, which you will receive at least 3 days before your closing. You should also confirm when and how much to wire with your lender. It's important that you don't leave the wire for the last minute, as you have no way of knowing how quickly it will arrive. 

hash-markSteps For Wiring Money For Closing

  • Obtain the Wiring Instructions
  • Confirm the Date You Need To Send the Funds
  • Contact Your Bank
  • Double Check Everything Before Sending the Wire
  • Send the Wire Transfer

1. Obtain the Wiring Instructions

The first step in sending money for closing is to obtain the wiring instructions. The title company or closing attorney will send the instructions to wire funds for closing. They’ll give you detailed information that cannot be shared elsewhere for security reasons. They will tell you how much you need to wire and where to perform the wire transfer for closing.

2. Confirm the Date You Need To Send the Funds

Now that you have the receiving bank's information, you need to know when to wire money for closing. You will typically get disclosures about three days before you officially close. This statement informs you how much you have to pay, which you should ensure is the right amount with a supervising authority. From here, your loan officer can tell you which day to send the wire.

3. Contact Your Bank

After you've obtained the wiring instructions, you'll need to contact your bank or credit union and familiarize yourself with their procedure for wiring funds. Depending on your bank's policies, you can either go to the branch or call someone to set up the wire. Your banker will be able to let you know how the process works so that you can prepare ahead of time. 

4. Double Check Everything Before Sending the Wire

Before you send the wire, you'll want to double-check all the information. If anything contradicts prior information you received, call the people associated with your closing before sending any money anywhere. It’s better to be safe than sorry.

5. Send the Wire Transfer

After confirming everything is correct, it's time to wire the money. You should not wire funds on the day of closing as it can get chaotic, and anything late could damage your chance of getting inside the home. Ensure you contact your loan officer and stay on top of the process to move the funds over in time. 

hash-markIs a Wire Transfer Safe For Closing?

Is a wire transfer safe for moving money when closing? The reality is that any movement of money has some risks associated with it. However, utilizing a wire transfer for large sums of money involved with closing is generally considered a safe decision. If you take the right precautions, there are minimal risks involved when you wire funds for closing.

What are the dangers that come with wiring money for closing? There are a few you should be aware of in real life. We’ll also talk about how you can ensure you stay safe while using a wire transfer for closing.

hash-markDangers of Wiring Money For Closing

One of the biggest dangers with wiring money for closing is a cybercrime known as phishing. This action is when a scammer does the following:

  • Pretends to be your agent or someone similar and leverages that position with alternate instructions for wiring the money, often to their bank account
  • The seller proceeds to wire the money to the account, unaware that they’re dealing with a scammer
  • The funds are lost forever since they went to an alternate person other than the closing agent

A shocking number of individuals fall victim to this scam every year. It’s one of the most common faults that come with wiring money for closing. 

Although it can seem like you’re invincible to these types of crimes, phishers can be highly convincing online. Their emails and texts often resemble something that your agent would send you. If they’ve already sent you instructions and you receive alternate directions, something fishy is up.

There are also the general dangers of letting your personal information leak on the internet. With so many accounts online to keep track of, it can be all too easy for someone to get ahold of your data and ruin the closing experience.

hash-markHow Do You Stay Safe Wiring Money?

To stay safe when using a wire transfer for closing, you need some measures to stay secure in this process. There are a few things you can always turn to if you feel unsure of something online. 

You can stay safe wiring money if you:

  • Avoid clicking on links that provide information contrary to what your agent has told you
  • Keep your passwords complex and stored in an alternate location 
  • Stay away from emails and texts that come from unfamiliar numbers
  • Keep in constant communication with your bank and agent

These tactics will keep you as safe as possible when wiring funds for closing. 

hash-markWiring Money For Closing Bottom Line

Knowing when and how to wire money for closing is essential to make sure your home purchase goes smoothly. By doing your homework and double-checking everything with your bank you will protect yourself from scams and ensure the money arrives on time.