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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!
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.
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'