Home Buying in San Francisco>Question Details

iqbal barikz…, Home Buyer in San Francisco, CA

What exactly is a down payment?

Asked by iqbal barikzai, San Francisco, CA Fri Jul 11, 2014

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"Down Payment" is the money you bring outside of the loan for the home purchase. This consists of the Good Faith Deposit (normally about 3% of the offer amount) that goes to the owner, within (3) three days of the offer acceptance. The remainder(3.5-20%) is transferred to escrow at a later date.
0 votes Thank Flag Link Mon Jul 14, 2014
There is some mis-information below. A good faith deposit (or "earnest money") is the amount you put down to show the Seller how committed you are to purchasing the property. A DOWN PAYMENT is between you and your lender, and usually runs between 0% for special loans (like VA and such) and 30% for higher-risk loans. It's a cushion that the bank demands to make the loan a safer investment for them. Like a casino...the bank always wins! The programs at the lower end of the spectrum (VA, FHA, etc) are financially backed by the government, so the bank is protected if you default on your loan.
0 votes Thank Flag Link Sun Jul 13, 2014
A down payment is you showing your commitment to purchase said house. Usually the larger the down payment the better for you. Depending on what type of financing you choose will determine the down payment needed.
0 votes Thank Flag Link Sun Jul 13, 2014
Hello,

A down payment is an initial payment made when something is bought on credit.
0 votes Thank Flag Link Fri Jul 11, 2014
If you are asking..."What type of down payment will I need to purchase a home?"

I would recommend speaking to a local mortgage lender about the different programs they have to help you move toward home ownership.

Good Luck!
0 votes Thank Flag Link Fri Jul 11, 2014
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