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What is a down payment?

 

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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Mortgage Overnight Averages
Product Rate +/- Last week
30 yr fixed mtg
3.65% 3.65%
15 yr fixed mtg
2.80% 2.78%
5/1 ARM
2.59% 2.60%
30 yr fixed mtg refi
3.64% 3.63%
View rates in your area:
 

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