up-front payment of a portion of a purchase price, thereby reducing the balance.

initial good faith deposit made by a home buyer, indicating intention to purchase real estate offered for sale and obtain financing from a bank or mortgage company. Also called a good faith deposit.

the amount one pays for property in addition to the debt incurred.

Example: Abel buys a house for $250,000. He arranges a $200,000 first mortgage and a $20,000 second mortgage . The down payment he needs is $30,000, which he pays in cash at closing .