We are preapproved for a mortgage. Is that the amount the bank will give us? How does the down payment figure into this?

Asked by Hbedder, New York, NY Fri Oct 5, 2012

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Christopher Pagli’s answer
Christopher…, Agent, Tarrytown, NY
Fri Oct 5, 2012
Hi, Typically the amount on your pre approval is the maximum they will lend based on the information you provided and they verified. Check the wording, it can either say a "loan amount" or "purchase price of". If it is the loan amount that is not including your down payment so add that on to your home search price. If it says purchase price then that is including your down payment.


Christopher Pagli
Accredited Buyer Representative
1 vote
Michael Rich…, , New York, NY
Fri Oct 5, 2012
The amount you are pre-approved for is the maximum the bank will lend you. The actual amount will depend on how much the proeperty you contract to buy appraises for. The lender will lend you no more than 80% of the appraised value or contract pricce, whichever is less. The downpayment is the difference between the contract price and the loan amount. Typically 10% of the purchase price is put into escrow with the seller's attorney upon signing the contract. The 90% balance , including all of the loan proceeds, is paid at closing.

Michael Richman
Licensed Real Estate Associate Broker
Bellmarc Reatty
681 Lexington Avenue
New York, NY 10022
Phone 212-688-8530 x223 Cell 917-991-2528 Fax 212-758-7495
Email mrichman@bellmarc.com
1 vote
Anna M Brocco, Agent, Williston Park, NY
Fri Oct 5, 2012
Your loan officer should be answering any questions you may have, therefore consider a consultation...
1 vote
Sergio Ayo, Agent, New York, NY
Mon Nov 5, 2012
Typically, it is the maximum that the bank will lend you. The loan amount is different. Check the letter and see if it says purchase price or loan amount.

Sergio Ayo
Licensed Real Estate Agent
Certified Cartus Relocation Specialist
Bond New York Properties LLC
1776 Broadway 19th Floor
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0 votes
, ,
Sat Nov 3, 2012
Typically it depends on how the Pre-Approval is written. When I personally write Pre-Approvals, the amount listed is the maximum purchase price. If it is an FHA loan it takes into consideration a 3.5% down payment. If it is a conventional loan I would have had the conversation with the borrower discussing how much of a down payment it was based on, depending on their goals and situation. I would speak with your loan officer and have them clarify these things for you.
Web Reference:  http://www.markfishernyc.com
0 votes
Annette Levi…, , New York, NY
Fri Oct 5, 2012
Your mortgage officer who gave you the preapproval should have gone over this with you. Give them a call. The type of property (SFR, multi, condo or coop) and the type of loan determines the down payment. They should also have given you a GFE (Good Faith Estimate). You will need the money to pay your closing costs besides the down payment. The preapproved amount for a mortgage is the mortgage amount. The mortgage officer should have given you the parameters of the real estate tax (if not a coop), homeowners' insurance, common charges if a condo and mortgage insurance if applicable.
0 votes
Janet Nation,…, Agent, Garden City, NY
Fri Oct 5, 2012
Hbedder, you really need to go back to the lender and start again, or maybe another instituation. We can't answer your question without knowing all the facts, we weren't there during the consultation. We don't even know if you were pre approved properly or if what you simply have is a prequalification, and I say this respectfully simply because of you line of questoning which are fair but you should have had understood what you have before you walked away. Hopefully this was not an excercise you did on line.
0 votes
Elena Ravich,…, Agent, New York City, NY
Fri Oct 5, 2012
it should say in your pre-approval letter what type of property you are approved for, coop or a condo. You have to factor in at least 20% downpayment (some coop building ask for 25 or 30% - have to ask before considering) and all closing costs that vary for coop and condo and also depend on whether you are buying directly from a developer/ sponsor or a re-sale.

Let me know if you would like me to send closing costs estimates for coop and condo
Elena Ravich
Rakita Realty
646 593 7207
0 votes
Gene Neal, , Ronkonkoma, NY
Fri Oct 5, 2012
You should have received a clear picture of how your down payment and closing cost work. If you are confused or would want a teammate throughout your entire transaction don't hesitate to reach me. The down payment is subtracted from your loan amount. Also realize the down payment and closing cost are two different aspects of the loan process.
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