What is a down payment?

What is a down payment?

Ron Goodlin (Mortgage Banker and Broker, The Goodlin Group) gives expert video advice on: When do I apply for a mortgage loan?; Who can help me apply for a mortgage loan?; What is collateral? and more...

A down payment is where you are going to put money down to purchase a home. For example, say the purchase price is $500,00 you have $100,000 of your own money sitting in your own bank account, and now you're also going to be getting a mortgage for $400,000. That money will go towards the down payment to purchase your new home at $500,000.