Jumbo, investor and non-QM loans often ask for savings left over after closing, counted in months of payments.
How it works
Reserves needed = monthly housing payment × months required
Savings after the down payment and closing costs count. Retirement and investment accounts are often counted at a reduced share. Some programs also ask for reserves on your other financed properties; add their payments to include them.
Keep in mind
- Programs differ: some require no reserves, while jumbo, investor and non-QM programs often require several months, sometimes per financed property.
- Gift funds and business accounts may or may not count, depending on the program.
Questions
What are mortgage reserves?
Cash or liquid assets you still have after closing, measured in months of the new housing payment. They show a lender you can keep paying through a setback. See also: DSCR investor loans.
Do retirement accounts count as reserves?
Often yes, at a reduced share of the balance to allow for taxes and penalties. The share depends on the program.
