Reserves?

Home Forums Purchase Program Reserves?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #60637
    firmeh89
    Member

    What type of reserve funds should I expect to have? I’m trying to calculate how much I will need for reserves and how much that will leave me for the buy down.?

    #60640
    Nelsont
    Member

    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.

    #60641
    firmeh89
    Member

    Ok so now I have an idea, thank you. Once they determine how much that is based on my situation is that money being put in a separate account, will I have access to that money once I close on a home?

    #60642
    Nelsont
    Member

    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.

    #61155
    Tara585
    Member

    @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?

    #61159
    Nelsont
    Member

    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.

Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.