Down Payment

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Down Payment

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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
Conversely, another user, Afaf Abdel Maged, said: "I will apply for the unit, despite the increase in the down-payment, as I need the apartment urgently.
The China Banking Regulatory Commission had said last week that it had not changed its policy on a minimum down-payment of 30 percent for first-home purchases and 60 percent for second-home purchases, or its requirement that mortgage rates be no less than 1.1 times benchmark rates for second-home purchases, the report noted.
There's one other important argument for shifting our attention to down-payment assistance.
A year ago, Springfield and Eugene raised their down-payment assistance limits to $6,000 from $4,000, "and we did a ton of applications right away, but then we came to a screeching halt again," Peterson said.
"Down-payments on the Card bring the convenience and rewards to an entirely new level."
"It was one of the best programs," said Lori Ojeda, an associate broker at ERA Top Service in Queens Village, who sold three homes through the down-payment assistance program since learning of it this spring.
The report found that among the largest 20 counties with down-payment data available, those with the highest average down-payment percentage were New York/Manhattan (37.2 percent); New York/Brooklyn (29.3 percent); Queens County, New York (27.3 percent); Santa Clara County, California (25.4 percent); and Orange County, California (22.9 percent).
Also, 17 percent said they would have to borrow the down-payment money "regardless of how much is required," according to NFCC's latest poll.
Companies or organizations that provide seller-funded down-payment assistance to homebuyers do not qualify as tax-exempt charities, the Internal Revenue Service (IRS) has concluded in a ruling.
FHA-insured loans with down-payment assistance have higher delinquency and claim rates than do similar loans without such assistance, according to an analysis by the Government Accountability Office (GAO).
However, as a conventional loan product, HomeStrength is best suited for borrowers who would benefit from down-payment assistance but do not fall within FHA guidelines and earn up to too percent of their median area income.
As part of an effort to attract and retain middle-income residents to the city, the Birmingham BEST initiative provides eligible families with down-payment and closing-cost assistance of up to $7,500.