Down Payment

• The down payment portion of the cash required to close on a home purchase is your upfront portion of the purchase price. The amount of the down payment can range from 3.5 percent of the home price for an FHA-financed purchased to more than 20 percent. The down payment amount becomes your equity in the home. For example, if the home costs $200,000 and you put 10 percent or $20,000 down, the initial loan amount will be $180,000. The difference between the loan balance and the home value is the owner's equity.