As described in 5 Essential Steps to Buying Property in New York I will be writing a series of more detailed articles about each of the 5 essential steps.
This article covers the third step in buying property in New York, financing.
There are two ways of purchasing a property in New York. One is to pay with cash, the other is to finance the home through a loan or mortgage.
If your real estate contract is subject to financing, the contract should be conditioned upon you receiving a mortgage commitment from a qualified lender licensed to lend in New York.
Once the contract has been signed, you will be given between thirty to forty-five days to obtain that financing, unless otherwise agreed between the parties.
Note that a letter prior to contract from your bank or lender, also known as a “pre-approval”, does not mean you have a mortgage commitment. A “pre-approval” will be issued by a lender during the home search process and helps establish credibility that a lender believes you are qualified to purchase the property. During this stage of the process, the lender has no commitment to provide you the financing. This differs from a mortgage commitment as the mortgage commitment is released after the lender conducts due diligence on your finances, also known as underwriting, and thereafter commits to the financing.
During the allotted commitment period, you must cooperate with your lender promptly and provide any additional documents, paperwork, or necessary signatures in order to obtain your financing.
If you are unable to obtain financing, you or the seller will have the option to cancel or extend the contract and/or closing date. In such a case, your down payment will be returned, provided you acted in good faith during the underwriting process and unless otherwise stated in the real estate contract.
Piccinnini Law provides reliable representation for anyone looking to purchase or sell a property in New York and we can help guide you through the real estate contract, and financing process, as well as make sure your initial down payment and investment are secure.
For more information, contact Piccinnini Law at 516-500-2110