January 15, 2020 at 1:12 am #64654MROCTOBERParticipant
What’s the MRF for New York, ie. Long Island and the 5 Boroughs?January 15, 2020 at 6:06 am #64657NelsontMember
Mrf is based on your income not your location. If you move from NYC to Wyoming your mrf will remain the same. Conversely if you move from Wyoming to NYC your mrf will remain the same. If you change jobs your mrf could change. Mrf is also a guideline so each of things you need to save up for will have a sliding scale. There is no set amount for any one person. When you have your first intake appointment your mortgage counselor will review your finances with you and determine your mrf. Obviously if you buy a house that costs 200k though your mrf will be less than if you buy a house that costs 500k as you can see below.
You first have to figure out how much your maximum monthly payment will be. Your mrf will include 2 to 3 months of your maximum monthly payment. Plus up to 10 months of prepaid property taxes. Up to a year of home owner’s insurance. A general estimate on an escrow money good faith deposit. A general estimate on a home inspection and possibly a few other things. These items are outlined in the workbook you will receive at the workshop. It’s safe to say that a low income would garner an mrf of a couple thousand while a high income and the intent on purchasing a house over 500k would garner a mrf of over 10k. Every person is unique.
January 15, 2020 at 7:33 am #64660
- This reply was modified 5 months, 3 weeks ago by Nelsont.
I’ll be honest I am purchasing in Long Island, and 10k for a 500k house is not going to cut it.
If you are going to buy down your rate its probably best to have about $25,000, because at closing you have to show money in your account. They wont let you use the whole $25000 and have $0 in the bank at closing, which is understandable.
I say a good rule of thumb in New York is about 3.5% minimum, on a $450,0000 house which is a little below average prices in Long Island thats going to be $15760.
Take into account New York is a lawyer state, so you’ll be paying $1500 give or take for a lawyer.
Plus you want to leave money for furnishings, and any updating you want to do to the home that isn’t required by the HAND department.
Plus be prepared for any prepaid escrows depending on your closing dates.
My home inspection was $600, and thats actually the discount prices. Its worth it, because my inspector was 5 star rated.
Then consider what kind of earnest money deposit you are going to put down. Other states they can get away with 1% but New York is more like 2% or higher. I spoke with one naca realtor who will not submit any offers for her clients unless they put down a 3.5% earnest money deposit. Its a tough market throughout NYC and Long Island so you have to be strategic.
If you want more for you dollar, maybe consider a multi family. I do not know how they value the numbers on that but just saying.
I also would suggest having very minimal to low debt so that you can qualify for the full 40% ration when calculating the 31% and your debt.
I only owe on my student loan, every other debt I cleared so that makes my process much more easier as I do not have to consider how I will juggle a home payment with tons of other debts. Just a suggestion.
These are the numbers a MC gave me on a property I was interested in prior:
BUYDOWN COST = $ 15,420 to buy down the rate from 3.375.% to 2.375% = 4 points Please Keep in Mind you are still going to need the ADDITIONAL Funds to cover the Prepaid Escrows, Home Inspection and Earnest Money Deposit = MRF = $4116 ***PLEASE ALSO NOTE AT CLOSING THE LENDER WILL NEED TO SEE THAT YOU HAVE 2 MONTHS OF MONTHLY MORTGAGE PAYMENT AMOUNT IN YOUR RESERVES = $2507 x 2 = $5014 Estimation of Total Cost : 15,420 + 4116 + 5014 = $24,550
and this house was only $365500 + some potential rehab costs. You have to have that $24550 in your account when you submit your PSL or they will not qualify you for it. They only can go by what you already have. Hence me saying atleast $25000.
I know some people have bought with less, but you dont want to buy a home in NY on your bare minimum. It will crush you, and you’ll be paying catch up even with an affordable home payment.January 15, 2020 at 8:07 am #64662MROCTOBERParticipant
Thank you for providing me with a clear depiction of what’s to come and the breakdown of the numbers. New York real estate market is a beast of its own. Much success!January 15, 2020 at 10:30 am #64664
No problem, best of luck. When I first started considering NACA I had someone tell me $10,000 was enough. It is so not enough at all, but everyone has a different journey. If you’re buying in a desired neighborhood you have to be competitive because alot of buyers in NY have cash.
Best of luck!January 15, 2020 at 10:32 am #64665NelsontMember
Let’s also remember mrf is MINIMUM. It’s always better to have more.January 15, 2020 at 10:47 am #64669Peapod0609Member
@vonny2421 one thing to note that you mentioned about needing a lawyer, NACA clients do not pay for the attorney fees. Bank of America pays for that. It is not an out of pocket expense for NACA buyers.
I think I mentioned that in another thread, but thought I would re-iterate.January 15, 2020 at 11:43 am #64676
@peapod0609 ok. Things are weird being that New York is an attorney state, I know most other states just use the title company lawyer. But I was told I have to pick a lawyer, and it wasn’t until after I signed the contract that my MC provided me with a NACA recommended list of lawyers. So I’m just trying not to mess anything up on my end.January 15, 2020 at 5:16 pm #64695TTrumbleMember
MRF is determined by several factors that are unique to your situation. Minimum Required funds are required to cover pre-paids such as advance property taxes and homeowners insurance needed at closing, earnest money, inspections, a buffer of one to three months of mortgage payments and any planned funds for interest rate buy down. As such there is no way to determine how much MRF you will need until after you have met with your counselor and the numbers have been crunched.
ALL actual closing costs, including attorney/title company fees are paid for by the bank and are not part of your MRF.
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