The loan amount is the total amount that the borrower promises to pay back. This is the amount after the down payment has been paid.
Let's look at an example. Assuming you purchase a $200,000 house with a 20 percent down payment ($40,000), your loan amount would be $160,000 if closing costs were also paid out-of-pocket as opposed to being wrapped into the loan. You are promising the lender that you will repay this $160,000 debt. If you don't, you are at risk of losing your home.