Down Payment

A portion of the price of a home, usually between 3-20%, not borrowed and paid up front in cash.

The difference between the purchase price and mortgage amount. The down payment becomes the property equity. Typically it comes from cash savings, but it can also be a gift that is not to be repaid or a borrowed amount secured by assets.

The portion of a home's purchase price that is paid in cash and is not part of the mortgage loan. This amount varies based on the loan type, but is determined by taking the difference of the sale price and the actual mortgage loan amount. Mortgage insurance is required when a down payment less than 20 percent is made.

Cash portion paid by a buyer from his/her own funds, as opposed to that portion of the purchase price which is financed.

A down payment is the amount, usually stated as a percentage, of the total cost of a property that you pay in cash as part of a real estate transaction.

The down payment is the difference between the selling price and the amount of money you borrow to buy the property. For example, you might make a 10% down payment of $20,000 to buy a home selling for $200,000 and take a $180,000 mortgage.

With a conventional mortgage, you're usually expected to make a down payment of 10% to 20%. But you may qualify for a mortgage that requires a smaller down payment, perhaps as little as 3%.

The upside of needing to put down less money is that you may be able to buy sooner. But the downside is that your mortgage payments will be larger and you'll pay more interest, increasing the cost of buying.