ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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5 to 10%
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10 to 20%
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5 to 20%
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10 to 15%
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Detailed explanation-1: -It would be a good idea to make a down payment of 15%-20% of the cost of an expensive asset such as a house when availing a home loan. You may repay the remaining loan amount over time through EMIs or equated monthly instalments. Lenders may specify a minimum amount for the down payment.
Detailed explanation-2: -Often, a down payment for a home is expressed as a percentage of the purchase price. As an example, for a $250, 000 home, a down payment of 3.5% is $8, 750, while 20% is $50, 000.
Detailed explanation-3: -Suppose the purchase price of your home is $400, 000. You need a minimum down payment of 5% of the purchase price. The purchase price multiplied by 5% is equal to $20, 000.
Detailed explanation-4: -A down payment is the cash you pay upfront to make a large purchase, such as a home. You use a loan to pay the rest of the purchase price over time. Down payments are usually shown as a percentage of the price. A 10% down payment on a $350, 000 home would be $35, 000.
Detailed explanation-5: -The formula looks like this: Down Payment = Purchase Price × Down Payment Percentage. Down Payment = $200, 000 × 10% Down Payment = $20, 000.