Which term refers to the initial amount that a buyer pays upfront when purchasing a home?

The term that refers to the initial amount that a buyer pays upfront when purchasing a home is the down payment. This payment is typically a percentage of the home's purchase price and is made at the time of the sale. The down payment shows the seller that the buyer is serious about purchasing the home and helps secure the financing for the rest of the property's cost.

The down payment is crucial as it affects the buyer's mortgage loan size; the remaining amount after the down payment is what the buyer needs to borrow through a mortgage. Generally, a larger down payment can also lead to more favorable loan terms, such as a lower interest rate, because it reduces the lender's risk.

Equity, on the other hand, refers to the difference between the home's current market value and the remaining balance of the mortgage. Closing costs are the fees associated with completing the real estate transaction, which can include various charges such as title insurance and appraisal fees. A mortgage is the loan itself used to finance the home purchase, which is paid back over time with interest.