However, the house ‘s the collateral one claims the loan
- $100k financing having $20k down payment buying a $100k procedure
- $80k loan with $0 down payment to shop for good $100k situation
You was expenses $100k in things irrespective, in the first, you’re making good $20k downpayment included in the financing arrangement, along with another circumstances, you are paying the $20k in addition to the loan agreement. Both in products, there is the $20k to invest, but it is only a point of whether you may spend it as the new down-payment otherwise purchase they by themselves of your loan and you can simply get less loan.
Revise for explanation: Inside problem #2, youre purchasing $20k on your own without the wedding of the bank, so that you only need a supplementary $80k to cover the remaining portion of the $100k
- fund
- down-payment
eight Responses 7
Whenever you are to order good $100k question (maybe a property), and you just take a keen $80k mortgage, then you are always having fun with $20k of your currency to acquire the house.