Home Loan Deposit
Home Loan Deposit Meaning:
In banking terminology, the term home loan deposit refers to the initial funds used as an up-front payment to a financial institution or private party in the purchase of a house. A home loan deposit is also known as a Down Payment and a mortgage deposit.
In banking terminology, the term home loan deposit refers to the initial funds used as an up-front payment to a financial institution or private party in the purchase of a house. A home loan deposit is also known as a Down Payment and a mortgage deposit.
For example, a home loan deposit is required by a lender before granting a home loan, constitutes a portion of the original payment on the house and is the basis for the subsequent mortgage. The mortgage deposit is a show of good faith on behalf of the home buyer and reassures the lender that the buyer will be able to meet their monthly obligations in the payment of the house. An simple example is: a 20% deposit on a $100,000 loan would be $20,000, which gives the home buyer a loan-to-value ratio of $80,000.
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