Reserves required by???

[Anonymous]

we were pre approved for FHA,  LO asked if we could do 3 months reserves, we said we could try to have 2 months. We are still working on having that.  My question is we dont need to have that showing until the final day we close right? We should have by closing beginning July. Will they see that we dont have before then and not go through with approval? We have been saving and cutting costs and dont anticipate to have reserves met until end of June...

[DallasLoanGuy]

a couple of days before closing so the uw can sign off on it

[Anonymous]

Yes, a couple days before hand should be fine.  They can even check same day if closing is a bit later in the day.

[joshall]

Do you have reserves in 401(k)? 70% of that should also be considered as reserves.

[frugalQ]

Josh, that may be a lender overlay. We didn't have our funds in the bank until 1 week before our original close date. We had specific deposits that we were using that would not be available until them. We kept the LO informed and provided all documentation.

[joshall]

frugal, I just created a new post.  I didn't realize OP was asking about reserves.

[Anonymous]

What is "lender overlay"? Thx

[Lemmus]

...in goverment guaranteed loans like fha/usda, the govt has certain minimums and maximums that it requires be met for any loan such as minimum score, max dtirs, max loan amount ...but the lender is actually making the loan and may want a higher score, lower dtirs, etc etc ...these are called "overlays" because they can require things over what the govt itself requires ...hth

[Anonymous]

Uncle Lemmus came in and said-

..."in goverment guaranteed loans like fha/usda, the govt has certain minimums and maximums that it requires be met for any loan such as minimum score, max dtirs, max loan amount ...but the lender is actually making the loan and may want a higher score, lower dtirs, etc etc ...these are called "overlays" because they can require things over what the govt itself requires ...hth"

Helpful post.