In order to continue securing a loan, a borrower pays this specific type of initial amount. 5% to 25% of the total loan amount is the paid amount, generally varying in range. Depending on the selected loan program and the borrower’s FICO score, a higher amount paid at the beginning will result in lower interest rate paid on the remaining amount of the loan. For example, a person requiring the loan needs to make an initial payment of $25,000 on a $250,000 loan amount if the minimum down payment for a housing loan to be approved is 10%.
Link to This DefinitionDid you find this definition of MINIMUM DOWN PAYMENT helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary