In real estate, a Down Payment is the portion of the purchase price that a buyer pays in cash from their own funds rather than borrowing through a loan. It is paid at or before closing and represents the buyer’s initial equity in the property.
The amount of the down payment is usually expressed as a percentage of the purchase price and can affect loan approval, interest rates, and mortgage insurance requirements. Larger down payments generally reduce the lender’s risk and the buyer’s monthly payment, while smaller down payments may increase financing costs or require additional insurance.
