Im almost embarrasses to asked this but how do they come up with how much you need to save? My counselor never replied to my email to discuss my Intake meeting. I once read a reply saying the oerson was abke to kill two urds with one stone in regards to payment shock and the MRF.
You will need save the difference between the amount you are paying now for housing and the total payment for your new mortgage. So as a quick example, if you pay $600/month now in rent, and your new mortgage payment is going to be $700/month, you will need to save $100/month. When we went to the seminar, though, they also mentioned saving $200+ the difference, so that would be $300/month in this example. The idea is you are “practicing” paying your new mortgage to ensure it’s feasible for you, and also saving money at the same time.
MRF is the funds that you need in order to close, this includes the amount that you need to pay at closing for the prepaids, this is not closing costs, for example property taxes, insurance, HOA (if any), prepaid interest, ect. These are costs that you would have to pay with any loan, the difference is that with a conventional loan, you also have to pay closing costs which with NACA you don’t. This should vary depending on the area where you are purchasing but I think that with a minimum of $4,000 to $5,000 you should have enough funds for MRF (Minimum Required Funds)