What is a down payment?

A down payment is money that is paid upfront toward the purchase of a home. In California, it is one of the requirements when seeking a mortgage. The amount of the down payment varies depending on the type of loan and the lender. Generally, homebuyers can expect to pay at least 3% of the purchase price of the home as a down payment. This money usually comes from the buyer’s own savings, or from their family or friends. In California, some loans may require a larger down payment. For example, if the loan is an FHA loan (Federal Housing Administration) the down payment may be as much as 5%, or if the loan is a jumbo mortgage, the down payment may be up to 20%. In California, there are also special down payment assistance programs that are available to help homebuyers who may not have the funds to make the down payment. These assistance programs may provide a grant or loan to the homebuyer, which can be used for the down payment. Ultimately, the down payment is an important part of the mortgage process in California. It provides the lender with assurance that the buyer is financially committed to the purchase, and helps to reduce the amount of money owed on the loan. Therefore, it is extremely important to factor in the cost of the down payment when considering the purchase of a home.

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What is a down payment?

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