Defining down payment

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Down payment’s the cash buyers give sellers in addition to the mortgage amount. There’s no limit to how large a down payment can be, although loan terms often require a minimum amount. This is good news for buyers who want to purchase a home costing more than a mortgage they can afford. By paying cash for the difference between the cost and mortgage amount, you can purchase the home you have your heart set on. The sale agreement will specify how much money you used as down payment, so your records will reflect the total investment in your home. One caution: if you don’t purchase the home after you’ve given a down payment, your money might not be refunded. The best way to ensure you’ll get your money back is to insert a clause regarding refunds into the sales agreement. If the sellers can’t transfer the title after you’ve provided a down payment, most sales agreements require them to return your money as well as reimburse you for expenses incurred and sometimes for interest, too. For more information about down payments, contact a real estate professional.

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