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What is a Down Payment?
A down payment is the first money that a buyer puts toward the purchase of a home but it might not come all at once. Part of that money might come when you sign the contract and another portion will come at closing.
The first lump of money is considered earnest money because it shows you are serious about purchasing the house. It is also considered a contract deposit and goes into an escrow account, which is held by the seller’s lawyer.
The first lump of money is considered earnest money because it shows you are serious about purchasing the house. It is also considered a contract deposit and goes into an escrow account, which is held by the seller’s lawyer.
Follow these steps on what to know about buying a home.
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Know How Much You Have to Put Down
The is 3.5 percent with a FHA loan on a 30-year fixed mortgage. Conventional mortgages require slightly more, typically about 5 percent.
The Veterans Administration allows no money down financing for U.S. military veterans only and the U.S. Department of Agriculture loan programs allow no money down financing as long as the home is in a rural area and you meet the low-income thresholds.
Find out other secrets of home buying.
Photo: Roman Samborskyl/Shutterstock