What is a down payment?
The Bankrate.com financial term of the day is: "Down payment."
A down payment is what you have to come up with when you want to make a big purchase such as buying a home or car. A down payment is typically a small portion of the total purchase price, and it reduces the amount that you have to borrow, if you're financing. With home buyers, lenders have traditionally required a down payment of 20 percent, but for an FHA mortgage, insured by the Federal Housing Administration, you need just 3.5 percent.
Better start lining up money for a down payment today, if you're planning to make a major purchase tomorrow.
To find the best mortgage rates, check the rate tables at Bankrate.com.
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A little research could save you BIG on interest.