Down Payment
Financial term in the Real Estate category
Definition
An upfront payment made when purchasing a large item, typically expressed as a percentage of the total cost. Common for home purchases (usually 3-20%) and auto loans.
Related Terms
Mortgage
A loan used to purchase real estate where the property serves as collateral. The borrower makes regular payments over a set term (typically 15-30 years) until the loan is paid off.
Home Equity
The portion of your home that you truly own, calculated as the property's market value minus what you owe on your mortgage. Builds over time through mortgage payments and property appreciation.
Frequently Asked Questions
What is Down Payment?
An upfront payment made when purchasing a large item, typically expressed as a percentage of the total cost. Common for home purchases (usually 3-20%) and auto loans.
Why is Down Payment important in personal finance?
Down Payment is an important real estate concept that helps individuals make better financial decisions. Understanding Down Payment can improve your financial planning and help you achieve your money goals.
How does Down Payment relate to Mortgage?
Down Payment and Mortgage are related financial concepts. A loan used to purchase real estate where the property serves as collateral. The borrower makes regular payments over a set term (typically 15-30 years) until the loan is paid off.
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