I am in the qualification process. I am seeking a modest loan and all my finances and requirements are in order. I had an issue with student loans so my original approval amount was verrrrrrrrrrrrryyyyy low, as was my MRF but has since been addressed. As a result my MRF increased more than doubled and am now being required equivilant to 3% of the loan value. I work a regular job and will be paying the same amount in mortgage as I do currently in rent and I am not understanding why my required funds are so high. This one thing will keep me out of a home as I can not pay my current expenses AND save several thousand dollars. I was all set to go to underwriting but now I wont be able to….can anyone advise??? I do not expect to come to the table with nothing but the requirement out prices me.
Have you asked your counselor for a break down of your MRFs?
MRFs tend to be around 3k or less. It’s entirely possible to be more and it’s based on the cost of the home, insurance, taxes, earnest money, etc. The example NACA gives on page 37 of the Qualification Workbook is 2200.00.
Of course this is separate from payment shock if you are required to have that as well.
Flowers1 is correct that you should ask your counselor for a breakdown of the MRF. There are a variety of variables that go into creating your MRF figure, most of which will vary with your qualification/loan amount. Also, if you are planning on buying down your interest rate, that will be calculated into your MRF and will also adjust with the loan amount.
In short, the answer to your question is in the specifics of your file, and that means your counselor is the person who can explain it to you.