down payment

A partial payment made at the time of purchase, with the balance to be paid later.

A type of payment made in cash during the onset of the purchase of an expensive good/service. The payment typically represents only a percentage of the full purchase price; in some cases it is not refundable if the deal falls through. Financing arrangements are made by the purchaser to cover the remaining amount owed to the seller.

Making a down payment and then paying the rest of the price through installments is a method that makes expensive assets more affordable for the typical person.

Investopedia Says:
For example, because houses are extremely expensive assets, home buyers typically pay down payments that equal 5-25% of the total value of a home. The remaining 75-95% of the price will be covered by a bank or other financial institutions through a mortgage loan.

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Initial good faith deposit made by a home buyer, indicating intention to purchase real estate offered for sale and obtain financing from a bank or mortgage company. Also called a Good Faith deposit.

The amount one pays for property in addition to the Debt incurred.
Example: Abel buys a house for $250,000. He arranges a $200,000 First Mortgage and a $20,000 Second Mortgage. The down payment he needs is $30,000, which he pays in cash at Closing.

noun

A partial or initial payment: deposit. See money, pay/owe.

A percentage of the total purchase price of an item that is proffered when the item is bought on credit.

In an installment sales agreement, a buyer is required to pay part of the total price, usually in cash, and later pays the balance through a number of regularly scheduled payments.

A down payment is sometimes known as earnest money, or a sum of money that a buyer pays upon entering a contract to indicate a good faith intention as well as an ability to pay the balance.

A payment in part made at the time of purchase of a good, with the promise to make full payment later.

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