Buyers are required to make a down payment of a certain percentage to pay for the property before buying a home. Among them, the common down payment ratio is 20%, that is, 20%.
How much is the down payment of 1. 20%?
The "two percent" in "two percent down payment" refers to 20%. In other words, buyers need to pay 20% of the total price of the home as a down payment. For example, if the total price of the house is $1 million, then the down payment of 20% is $200,000.
2. Calculation method of down payment
The down payment is calculated as follows: down payment = total price of the house down payment ratio. Here's an example of a calculation:
Assuming that the total price of the house is $1.2 million, the down payment ratio is 20% (i.e. 20%).
Down payment = 1,200,000 02 = 240,000.
So, in this example, the down payment is $240,000.
3. Factors influencing the down payment ratio
The down payment ratio determines the amount of down payment that a home buyer needs to make. Here are some of the factors that affect the down payment ratio:
1.Home Buyers' Home Purchase Funds**: Home buyers can choose a higher down payment if they have sufficient funds to buy a home, which can reduce the stress of borrowing and interest expenses.
2.Bank's loan policy: Different banks have different loan policies and will also have requirements for the down payment ratio. Typically, the higher the down payment, the smaller the loan amount.
3.The higher the price: The higher the price, the more down payment the buyer will have to make.
Fourth, the down payment method
There are a few ways for home buyers to make a down payment:
1.Bank Transfer: Transfer the down payment to the bank account designated by the seller.
2.Cash Payment: Pay the down payment directly in cash.
3.Cheque payments: Homebuyers can use cheques for down payments, but they need to make sure that the cheque is valid and fully funded.
Fifth, the role of the down payment
The down payment plays an important role in the home buying process and has some impact on both the home buyer and the bank:
1.For home buyers, a down payment can reduce the stress of borrowing and interest expenses. At the same time, it is also a way for buyers to subscribe to the house and show their sincerity.
2.For banks, a down payment can reduce loan risk and improve loan security. The bank will determine the loan amount and the terms of the loan based on the proportion of the down payment paid by the buyer.
Conclusion:
Buyers need to understand and calculate the amount of the down payment before buying a home. Calculations based on the total price of the house and the down payment ratio can help buyers reasonably plan their home purchase funds and choose the payment method that suits them. The payment of the down payment not only affects the buyer's loan stress and interest expense, but also demonstrates the buyer's subscription and sincerity towards the home. At the same time, the bank will also decide the loan amount and loan terms according to the down payment ratio to ensure the security of the loan.