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So you try using $100k both in situations irrespective, but in the first, you are making a good $20k advance payment included in the loan contract, along with the next circumstances, youre paying the $20k independent of the financing agreement. In affairs, you have the $20k to pay, but it is only a question of if you may spend it as the brand new downpayment otherwise spend it on their own of the loan and you can simply rating a reduced loan.
When you find yourself to buy a great $100k material (possibly a property), and you only take a keen $80k financing, then you are always having fun with $20k of the currency to invest in our house. This is the concept of a downpayment: money your very first leading to a thing that is purchased which have a loan.
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