(Estimated timeframe: 3 – 7 days)
The next step in the purchasing process is to contact a mortgage broker or banker to help you get pre-approved for a mortgage. To prove that you are a serious buyer, get a pre-qualification letter to show your good financial standing, which will enable you to get started on your search right away.
Remember that your final mortgage approval is contingent on having the necessary down payment and supporting documentation. For example, condos require a minimum downpayment of 10-20 percent down and Co-ops at least 20 percent or more. Without pre-approval, agents and sellers won’t take you seriously, and they’ll move on to a buyer who has the necessary paperwork. Plus, you’ll know how much of a loan you qualify for ahead of time.
Lenders pre-approve homebuyers for a specific amount of financing. Homebuyers must feel comfortable with the amount of monthly mortgage payment terms. If the figure strains your budget, monthly payments could become unmanageable over time. Ultimately, it is your decision, but make it a wise one. Overstretching your budget can lead to unwanted stress.
Approximately 20 percent of the buildings are condominiums in Manhattan, and the other 80 percent are cooperatives. However, Condominiums allow for 90% financing since the financial; most lenders require that the buyer put down 20%.
Documentation Required for Pre-Approval
- Most recent checking and savings bank statements
- Previous two years tax returns
- List of other liquid or non-liquid assets
- Most recent 401K or retirement fund statements (if applicable)
- Most recent asset portfolio statements (if relevant)
- Employment verification letter confirming your start date, annual salary including bonus
- If self-employed – letter from your CPA or attorney verifying your salary and net worth