I don’t know what happened but my post disappeared.
You will need 2 to 3 months piti plus home owners insurance plus escrow money deposit plus neighborhood association fees if any plus 2 to 10 months property taxes. The actual amount of months will depend on your situation.
No this is money you need to have in your account. You won’t get qualified until you you do. You will need to put a deposit down via certified check made out to and sent to the title company as soon as you make an offer. Your agent will help you with that. The remaining funds are due at closing made payable to the title company either by certified check or wire transfer. Your title company will give you the exact amount due and details of the transaction the day before or the morning of closing.
Your piti in the mrf is a safety net built into the system. You keep this. Naca requires you have it so by the time you have the keys you will not have depleted your bank account.
The workbook states you get the deposit back at closing. In actuality it is just subtracted from the balance owed.
@Nelsont, the MRF and reserves are the same thing? I thought you used the MRF to pay for the inspection and other things like buying-down your interest rate if you choose. Am I seriously wrong on this?
You are right. The mrf includes reserves. The 2-3 month piti is a safety net built into the mrf that you don’t spend so by the time you close you don’t deplete your bank account and actually have a rainy day fund. The rest of the mrf is things you will need to spend.