Question

When buying a house, you may not have enough money for the full price. What is the main reason for making a down payment?

(1 point)

To cover the real estate agent's full commission.

To pay for the home's future repair costs.

To increase the mortgage's overall interest rate.

To reduce the total amount of money borrowed.

Answer 1

To reduce the total amount of money borrowed.

A down payment lowers the loan principal, reducing how much you need to finance and often improving loan terms.