What is referred to as the amount of money a borrower has invested in a property?

The term that refers to the amount of money a borrower has invested in a property is commonly known as capital. In the context of real estate and mortgages, capital represents the borrower's equity in the property, which is the difference between the property's market value and any outstanding mortgage balance. This investment usually consists of the down payment made by the borrower and any additional funds used for improvements or other costs associated with purchasing the property.

Understanding capital is essential for both lenders and borrowers because it reflects the borrower's financial commitment to the property. Higher capital can indicate a lower risk for lenders, as it shows that the borrower has a significant investment in the property, making them more likely to fulfill their mortgage obligations. This concept is foundational in real estate finance and is critical in evaluating the overall financial health and leverage of the borrower.

The other concepts mentioned, while important in the broader context of real estate financing, do not directly describe the amount of money invested in the property itself. Collateral refers to an asset pledged as security for a loan, credit score is a numerical expression of an individual's creditworthiness, and cash flow denotes the income generated from an investment property, thus standing apart from the idea of capital as an investment stake.