Mortgage Glossary
Reserves
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Reserves are liquid assets a borrower has left after closing, measured in months of mortgage payments.
What Reserves means
Lenders require reserves on some loans, especially jumbo and investment, to show you can weather a financial hit. Retirement accounts often count at a discounted value.
Florida example
A Florida jumbo borrower may need six months of PITI in reserves, so on a $4,000 payment they must show $24,000 remaining after the down payment and closing costs.
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