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Down Payment
Explanation:
The amount you pay up front in "cash" when making a significant purchase that will necessitate you taking out a loan in order to finance the rest of the transaction and pay off the remainder of the sale price over time.
The loan amount and terms you get approved for largely depend on your credit standing and income. The more responsible you've proven to be in handling past financial obligations and the more financially secure you are at the moment, the less of a perceived risk you will be to lenders and the better your interest rate and other key terms will be. Similarly, making a larger down payment and therefore relying on a loan to cover less of the purchase price will lessen a lender's level of concern since you're more invested in not defaulting on your loan and will too manifest itself in more advantageous loan terms.
Our Thoughts:
Determining the down payment you can afford to make is integral to figuring out what you can afford, whether you're in the market for a house, a car, or something else. One should always strive to make the biggest down payment that is comfortably possible in order to save money on interest and get a lower rate.