Slk, Home Buyer in Flatbush - Ditmas Park...

What's the normal amount of a prudent reserve that a co-op board requires for personal savings? Is it a percentage of the mortgage amt or?

Asked by Slk, Flatbush - Ditmas Park, Brooklyn, NY Mon Oct 25, 2010

purchase pr My wife and I are planning to purchase a home. After spending a good amount of our personal savings on a 20% down payment we wonder how much a board is looking for in a prudent reserve of personal savings after the down payment? BTW our credit is superb. Please no sales or credit offer solicitations in response to this question.

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Some boards require 3-6 months of reserve. If you have a particular building in mind you may want to check the management company , usually their contact info is listed in the vestibule area above the doorbells. Also check with your lender because the reserves that the lender requires may be different the than the building. So you'll need to meet the req of both the building and the lender.
0 votes Thank Flag Link Sat Oct 30, 2010
Hi Slk. I tend to err on the side of caution. As someone below astutely suggested, your reserves would include all assets even those like a retirement fund such as a 401K or an IRA.

As for on hand cash assets, I believe a prudent reserve would be equal to one year of your combined mortgage and carry charges.
0 votes Thank Flag Link Thu Oct 28, 2010
Dear Slk:

As stated in previous answers the amount of reserve the co-op wants will vary from co-op to co-op. Typically on the average in my experience it would be about six months worth of reserves. That would be funds to pay your monthly maintenance and also your mortgage if you are getting one.

Also keep in mind that you incur other closing costs when you purchase so make sure you take that into consideration. If you are able to find a co-op that you purchase directly from a sponsor, you would not need any reserves other than what your bank would require to get the loan. Sponsor sales are not subject to board approval and are much easier a process. If I can be of further assistance please let me know. Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
0 votes Thank Flag Link Mon Oct 25, 2010
It depends usally on The Board. But those that want to see a cash reserve normally want to see at least 6 months in your account. I would be happy to answer any other questions you may have-Best of luck with new home!
Charles W. Mirailh
Superior Realty
2008 Avenue Y
Brooklyn,NY 11235
Direct: 917-443-6295
0 votes Thank Flag Link Mon Oct 25, 2010
i would say equal 6 months of principal and interest of the monthly mortgage payments.
Web Reference:
0 votes Thank Flag Link Mon Oct 25, 2010
It can vary from coop to coop. Depending on the financial situational, of you, as well as the building. Six months to a year
0 votes Thank Flag Link Mon Oct 25, 2010
The amount that co-op boards require for personal savings will vary by complex to complex; do keep in mind that they also do scrutinize the applicant's debt to income ratio--ask your agent or attorney the question, or if you know who management is, contact them directly and ask.
0 votes Thank Flag Link Mon Oct 25, 2010
Dear Slk,

There is no exact answer and this also depends on your non cash assets. If you have stocks, bonds, retirement accounts, etc this all counts towards your "reserves". If you meet or exceed the income requirements and have over $10,000 in reserves I think you should be just fine.

Thank you
Corey Wasserman, Associate Broker
Bergen Basin Realty
0 votes Thank Flag Link Mon Oct 25, 2010
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