pre-approval help

Check you debt to income ratio first. Most coops require 25 - 30%. You might have to pay down debt with that bonus. Some places require ready cash that will cover several month's worth of maintenance. You can get a mortgage without meeting the coop's financial requirements.

Remember though, that pre-approvals have an expiration date. Make sure you're able to get extensions without paying extra fees. Right now the banks keep checking and checking your finances, even the week before your closing.

Thanks. I should be OK on debt to income. I'm looking for something in the range of $2.5M. I was thinking of applying for a $2M loan with a $500k down payment, and I have enough liquid on hand now for that down payment. But since if it ends up a coop, it will be closer to a $1.25M down payment, and I would use the bonus as part of that down payment. If I get pre-approved for the larger loan with the 20% down payment, would that automatically approve me for the smaller loan with the bigger down payment?

A pre approval should not take very long. It doesn't speed up the loan process since you still have to document your income when applying for the loan and submit a completed co-op questionnaire.
As a mortgage broker I have lenders who issue commitment letters before you have an identified property. This is far different from a pre approval, it's much stronger and does in fact make the loan process quicker and easier.

My lenders can review a co-op questionnaire for a particular building before contract signing.

Ellen Silverman
Licensed Mortgage Broker since 1990, NMLS#60631
Licensed Real Estate Broker since 1987
esfundingco@aol.com

Good idea taking care of this before starting the whole process

1. You will only need to get pre-approved once, irrespective of whether you are buying a condo or co-op. There is really no substantive difference on a pre-approval for a condo or co-op. My advice would be to get pre-approved for 80% of the purchase price that you feel most comfortable with at this time. If you end up wanting to bid on a unit that requires a larger loan, you will likely be able to have your pre-approval modified without issue, especially if your income is adequate. If you decide that you want/need to put more down and require a smaller loan, then since you are already pre-approved for a higher loan amount, there should be no issue with the lender to reduce the amount you need.

2. If you have documentation that a bonus has already been determined and will be paid out on a certain date, that may be enough for a lender rely on and issue a pre-approval. If you are a borderline borrower, this may be relevant, but if you’re not (and based on what you’ve written, it does not sound as if you are), it won’t likely matter.

Dan Gotlieb
Digs Realty Group
www.digsrealtynyc.com