Key Takeaways
- Your lender will wire mortgage funds to a checking account in your name, not a savings account, because you need access to the money on closing day.
- The account must be at a bank or credit union that can receive wire transfers, which rules out some online-only institutions and prepaid card services.
- You will need to provide your routing number and account number to your lender at least three to five business days before closing.
- If you do not have a checking account, opening one takes one to three business days, so do this as soon as you have a closing date.
- Some lenders will accept a cashier's check mailed to your attorney or title company instead of a wire transfer, but this delays closing by one to two days.
Why Checking Accounts Are Required, Not Savings
Mortgage funds arrive as a wire transfer on closing day, usually in the morning. You then have a few hours to pay your down payment, closing costs, and any prorated property taxes or homeowners insurance to the title company or attorney handling the closing. A savings account typically does not come with a debit card or check-writing ability, so you cannot access the money fast enough. A checking account lets you write a check, use a debit card, or authorize an electronic transfer to the title company within minutes.
The lender also needs to know the funds are in an account you control and can move. Savings accounts are sometimes joint accounts or held in trust, which creates questions about who owns the money and whether it can be moved without multiple signatures. A checking account in your sole name is clear and immediate.
What Type of Bank or Credit Union Works
Your checking account must be at an institution that can receive wire transfers. This includes all traditional banks, credit unions, and most online banks. Some prepaid card services, PayPal accounts, and money transfer apps do not have routing numbers or do not accept incoming wires, so they will not work.
Call your bank or credit union and confirm they can receive a domestic wire transfer. Ask them for your routing number and account number. If you are unsure whether your institution accepts wires, contact your lender's closing coordinator—they can tell you immediately whether your bank will work. Do not wait until three days before closing to find this out.
Timeline for Opening a New Account Before Closing
If you do not yet have a checking account, you can open one online or in person. Online applications at most banks take 5 to 10 minutes and the account opens within one to three business days. In-person applications at a branch take 15 to 30 minutes and the account is usually active the same day or next business day.
You will need a government-issued ID and proof of address (a utility bill, lease, or recent mail from your lender works). Some banks also ask for a Social Security number or tax ID. Once the account is open, you will receive a routing number and account number immediately, either on screen or in a welcome email. Write these down and send them to your lender's closing coordinator right away.
Information Your Lender Needs From You
At least three to five business days before closing, your lender will ask for your wire instructions. This means your routing number, account number, the name on the account, the bank name, and the bank's address. Some lenders also ask for a phone number for the bank so they can verify the information before sending the wire.
Double-check every digit. A single error in the routing number or account number can send the funds to the wrong account, and recovering the money can take weeks. If you are unsure about any number, call your bank and read the information back to them to confirm it is correct. Then send it to your lender in writing—email is fine—so there is a record of what you provided.
What Happens If You Cannot Use a Wire Transfer
Some lenders offer a cashier's check as an alternative if you do not have a checking account or if your bank cannot receive wires. The lender issues a cashier's check made out to the title company or attorney, and it arrives by mail or courier. This adds one to two business days to the closing timeline because the check has to be received and cleared before the title company will release the deed.
A cashier's check is safe because it is drawn on the lender's bank account, not yours, so there is no risk of the funds bouncing. However, it is slower. If you are on a tight timeline, opening a checking account is faster than waiting for a check to arrive and clear.
Joint Accounts and Accounts in Another Person's Name
Your lender will wire funds only to an account in your name. If you have a joint checking account with a spouse or partner, the account can be in both names, and the wire can go there. If the account is in someone else's name only—a parent, sibling, or friend—the lender will not send the funds there, even if that person gives permission.
If you are buying with a co-borrower, both of you can be on the checking account, or each of you can have your own account and the lender can split the wire between them. Ask your lender which option they prefer. Some lenders require all borrowers to be on one account; others allow separate accounts. Confirm this before closing day.
Frequently Asked Questions
Can I use a savings account if I transfer the money to checking before closing?
No. Your lender needs the funds in a checking account in your name so they can wire them directly there. They will not wire to a savings account under any circumstances, even if you promise to move the money. Open a checking account instead.
What if my bank says they cannot receive wires?
Switch to a different bank or credit union that does accept wire transfers. This takes one to three business days. Tell your lender immediately so they know to expect a delay. Do not wait until the day before closing to discover this problem.
Can my lender wire the money to my employer's account or my accountant's account?
No. The funds must go to a personal checking account in your name. Your lender cannot send mortgage proceeds to a business account or a third party's account, even if you authorize it in writing.
What if I make a mistake giving my lender the wrong account number?
Call your lender's closing coordinator immediately and provide the correct information. If the wire has already been sent, the bank that received it will try to return the funds, but this can take five to ten business days. Your closing will be delayed until the money arrives in the correct account.
Do I need to keep money in the checking account after closing?
No. Once the closing is complete and the funds have been transferred to the title company, you can withdraw the remaining balance or close the account. Many people close the account after closing or move the money to savings.