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Reserve Funds Required for FHA Loan

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Anonymous
Not applicable

Re: Reserve Funds Required for FHA Loan

Hey Mickie,

I didn't know that reserves can sway an underwriter's decision. Wow, that brings a sigh of relief- I think. We're currently getting underwritten for a $370k loan, DTIs are close to the limit- but we're going in with about 15k in reserves (i'm including 50% of our 401Ks)-- will reserves really sway the underwriter in our favor, or are they looking for something more along the lines of 20-30k in reserves?

 

Just curious, as we're still waiting for the head cheese to give us the thumbs up and this wait is KILLING us! 

Message 11 of 13
Creditfox
Established Member

Re: Reserve Funds Required for FHA Loan

mickie08 - thanks for the info. My ratios are good. My FICO scores are 755 EQ and 760 for TU.   The home loan will be for around $380K. 

 

In case of an emergency, I can withdraw from my 401K (although there will be a 10% tax penalty) which has a balance of around $70K.  I assume that this is a good enough reserve for the lender.

Message 12 of 13
DallasLoanGuy
Super Contributor

Re: Reserve Funds Required for FHA Loan

Think of approval process like a teeter totter.

 

Good stuff on one side and bad stuff on the other.

 

Good reserves may balance out something on the bad side. Best to think of cash reserves as a 'compensating factor'

 

 

 

Retired Lender
Message 13 of 13
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