Definition: The down payment is the portion of a property’s purchase price paid without the purchase mortgage financing.
Example
A buyer pays $300,000 for a home and borrows $240,000. The down payment is $60,000, or 20% of the price.
Keep the distinction clear
Closing costs are separate from the down payment. An earnest-money deposit already paid can be credited toward the funds due at closing; do not count it twice.
Related terms
Loan-to-Value Ratio (LTV) · Equity · Escrow
Keep studying
Loan-to-Value, Down Payments, Equity, and PMI
References: CFPB: Loan Estimate disclosure rules
Pronunciation (US): DOWN PAY-muhnt (capitals show stress)
Pronunciation reference: Merriam-Webster
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