To buy a home, Lois pays part of the purchase price up front in cash and borrows the rest of the funds from Members Credit Union. The part of the purchase price paid up front is
A)a down payment.
B)a short sale.
C)a prepayment penalty.
D)a mortgage.

Question

Quizplus · Accepted Answer

A down payment is the portion of the purchase price of a home that the buyer pays upfront in cash, and it is not financed through a loan. This contrasts with a mortgage, which is the loan itself, a short sale, which is selling the home for less than the mortgage owed (with the lender's permission), and a prepayment penalty, which is a fee that might be charged if a loan is paid off early.

To Buy a Home, Lois Pays Part of the Purchase