How much reserves do I need for a mortgage?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Reserves are savings left after closing, measured in months of mortgage payments. Many primary-residence loans need none, while jumbo and investment loans often require two to twelve months.
Reserves reassure underwriting you can weather a rough patch. Retirement accounts often count at a discount. We'll tell you exactly how many months your program wants and what assets qualify.
What reserves mean
Reserves are the money left in your accounts after you pay your down payment and closing costs. Lenders measure them in months of house payments. Two months of reserves means two full mortgage payments sitting in the bank.
Many primary-home loans need little or no reserves. Investment properties and jumbo loans ask for more, often two to six months, because they carry more risk.
Where reserves can come from
Reserves can sit in checking, savings, or even a retirement account. Retirement funds usually count at a reduced value since you cannot tap them freely.
Not sure if you have enough? We will look at your accounts and tell you where you stand. Contact us and we will confirm your reserve requirement before you make an offer.