Down Payment
A down payment is a payment made in cash during the onset of the purchase of an expensive item. A down payment is typically a percentage of the total purchase price of the item. The down payment is usually paid at the time of finalizing the transaction and is considered part of the purchase price. It is usually a percentage of the total purchase price, typically ranging from 5% to 20%. The down payment amount is often determined by the lender and is based on the borrower’s credit score and other factors.
History of Down Payment
The concept of a down payment has been around for centuries. It was first used in the Middle Ages when people would pay a portion of the purchase price of a home or other property up front. This was done to show the seller that the buyer was serious about the purchase and had the means to pay the remainder of the purchase price. The concept of a down payment has evolved over time and is now used in many different types of purchases, including cars, boats, and other large purchases.
Comparison Table
| Down Payment | Percentage of Purchase Price |
|---|---|
| 5% | 95% |
| 10% | 90% |
| 15% | 85% |
| 20% | 80% |
Summary
A down payment is a payment made in cash during the onset of the purchase of an expensive item. It is usually a percentage of the total purchase price, typically ranging from 5% to 20%. The down payment amount is often determined by the lender and is based on the borrower’s credit score and other factors. For more information about down payments, you can visit websites such as Investopedia, Bankrate, and NerdWallet.
See Also
- Mortgage
- Closing Costs
- Loan
- Interest Rate
- Credit Score
- Debt-to-Income Ratio
- Escrow
- PMI
- Home Equity
- Home Appraisal
