Final answer:
A down payment can lower the amount of monthly payments on a mortgage.
Step-by-step explanation:
The correct answer is Option b) Down payment. A down payment is the initial amount paid towards the purchase of a home, and a higher down payment can lower the amount of the monthly payments on a mortgage.
When you make a larger down payment, you are borrowing less money from the lender, which reduces the principal amount of the loan. As a result, your monthly payments may be lower since you are repaying a smaller loan.
For example, if the purchase price of a home is $200,000 and you make a 20% down payment ($40,000), you would only need to borrow $160,000. This could potentially lower your monthly mortgage payments compared to making a smaller down payment.