A downpayment is an initial payment made towards the purchase of a home or other property. It is typically expressed as a percentage of the total purchase price and is required in order to secure a loan from a lender. The downpayment is usually paid at the time of the closing, and is meant to show the lender that the borrower is financially committed to the purchase. The amount of the downpayment will vary depending on the type of loan, but it is usually between 3 and 20 percent of the purchase price. For example, a borrower taking out a conventional loan may be required to make a downpayment of 5 percent, while one taking out an FHA loan may be required to make a downpayment of 3.5 percent.
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Daniel H. Weberman, The Kabinet Founder
Daniel is an attorney and the founder of Kabinet. He is always here to help answer your home ownership questions as well as anything related to using your Kabinet app. Ask Daniel a question by sending an email to info@completehome.io and put “Daniel” in the subject line. This is a complimentary service as part of Kabinet’s commitment to you!
Note
Daniel, The Kabinet Founder, has made every effort to ensure the accuracy of the information within this article was correct at time of publication. He does not assume and hereby disclaims any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from accident, negligence, or any other cause. Speak to your advisor to make sure you qualify for such benefits or opportunities. Do not rely solely on this abbreviated article, it is for informational purposes only.
