Down Payment

Importance: 0.57

Is a company: no

Is a proper noun: no

Synonyms

  • upfront portion
  • initial payment
  • initial cash investment

Alternate Spellings

  • down-payment
  • downpayment

Definition of Down Payment

  1. A partial payment made at the time of purchase or when a loan originates with the balance to be paid later. First-time home buyers are allowed to put as little as 5% down when purchasing a property.

Related Terms and Acronyms

  • Pre-payment Clause Bank,
    • A clause that stipulates the amount of principal a borrower may prepay ahead of schedule without penalty as well as the prepayment penalty for larger prepayments.
  • Zero Down Mortgage Definition,
    • A mortgage product that allows the borrower to financing 100% of their property.
  • Original Principal Balance Bank,
    • The amount borrowed.
  • Pre-payment Bank,
    • Applying additional payments towards the balance of a mortgage loan.
  • Trade Equity Bank,
    • A swap of property, such as real estate or a car, as part of a down payment for other real estate.
  • Purchase Price Definition,
    • The total selling price of the home, including the cash down payment and the principal on the loan.
  • Home Buyers' Plan (HBP) Bank, Canada, Very Important,
    • A way for a homebuyer to use part of his or her RRSP as a down payment on a mortgage.
    Government assistance for first-time homebuyers.
  • Buy-down Definition,
    • When a borrower or a mortgage broker "buys down" a mortgage rate, they make an upfront payment to the lender in order to lower the mortgage rate. A similar effect can be achieved by making a lump sum payment at the beginning of a mortgage term.
  • Seller Carryback Definition,
    • A form of financing in which the seller of a property accepts a down payment and agrees to accept payments until the property is paid for.
  • Cash Back Mortgage Definition, Important,
    • A mortgage that provides the borrower a lump sum cash payment.
  • Pre-payment Penalty Bank,
    • A lender's charge to the borrower for paying off the loan before the end of the term.
  • Conventional Mortgage Definition, Important,
    • A mortgage that is not insured or guaranteed by CMHC or GE Capital.
  • High-ratio Mortgage Definition, Important,
    • A mortgage in which a borrower places a down payment of less than 20% of the purchase price.
  • Low-down Mortgages Definition, Important,
    • Mortgages with a low down payment, usually less than 10 percent.
  • Leverage Bank,
    • The use of a small amount of cash and a large loan to buy something.
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