Required Cash

Filed Under:
Dictionary Says

Definition of 'Required Cash'


The total dollar amount that must be posted up front by the buyer to close a mortgage or to refinance an existing property. The required cash amount can include any of the following amounts if they are requested at closing:

-Any down payment
-Points or other fixed charges to the lender
-Insurance premiums
-Title insurance or per diem interest

The required cash should be expressed on the Good Faith Estimate of Settlement, which is a mandatory step in the lending process.


Investopedia Says

Investopedia explains 'Required Cash'


While taking out a mortgage used to require a 10-20% cash down payment, newer types of mortgages along with an easy credit environment relaxed standards to the point where many people were able to borrow large amounts with no down payment. That cost didn't just vanish, however, it was simply added to the principal due on the mortgage, leading to higher interest costs over the life of the loan. "No down payment" and "interest only" mortgages were one of the hallmarks of the subprime lending boom during 2004-2006, but many of these borrowers will end up having their homes foreclosed as a result of rising interest rates and lack of equity buildup.

comments powered by Disqus
Hot Definitions
  1. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  2. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  3. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  4. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  5. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  6. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
Trading Center