A parachute with payload is modeled as a three-degree-of-freedom system suitable for time-accurate coupling with the Navier-Stokes flow equations. The coupled equations of motion are formulated following an instantaneous Lagrangian-Eulerian approach, and solved using Newmark's time-integration method. Flow solutions are computed by solving the Reynolds-averaged Navier-Stokes equations with structured overset grids. A sensitivity analysis is used to check the adequacy of grid and time-step requirements. The time-accurate coupling procedure is validated by comparing the results with a frequency-domain approach. The results are demonstrated for a real parachute system, including a comparison with the results based on the linear theory. Possible instabilities, such as divergence of inclination angle and flutter associated with fluctuating drag force, are predicted. The present work advances the fidelity of analysis procedures beyond those in current use based on loose coupling with the Navier-Stokes equations.