When buying a home, the standard real estate contract will always require a deposit. The contract may then go on to provide for a further payment of cash, which, together with the proceeds of an anticipated mortgage along with the deposit, make up the purchase price. The further cash payment is called a down payment. Although the average buyer will likely be familiar with these terms, the distinctions between them are often overlooked or misunderstood. To clarify any confusion, the following offers a brief overview of what the deposit and the down payment ultimately mean for you, the homebuyer.
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