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Reserves required for mortgage

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Re: Reserves required for mortgage


@tacpoly wrote:

Most lenders do not want to see you moving money around at the last minute.  Ideally, you'll have all necessary funds liquid in your accounts, stable for at least 3 months ("seasoned") before you need to access them at closing. 


@ChrisinKC wrote:

Thanks for your response.  What do you mean by "seasoned"?


@Sandibeach22 wrote:

We had to have our down payment in the bank first.  I made sure it was transferred & seasoned to make things go smoothly.  Then it was 3 month of reserves here in FL.


 


Regarding reserves:  it has nothing to do with your scores and more to do with lender, as well as co-op/condo, requirements - at least in my market.  We were required to show 2 years' reserves and our scores were 800+; and our lender wanted to see cash equivalents for reserves (i.e. no retirement funds).

 


^^^Yes, exactly.  It is a matter of loan type too. Condos are treated differently than single family homes. Condo's generally need more reserves. There are specific requirements especially if the condo association doesn't have its own reserves. 

 

So product type (condo, SFR, TH) matters as well as individual lender requirements on top of Fannie or Freddie requirements.

Message 21 of 24
New Contributor

Re: Reserves required for mortgage


@StartingOver10 wrote:

@tacpoly wrote:

Most lenders do not want to see you moving money around at the last minute.  Ideally, you'll have all necessary funds liquid in your accounts, stable for at least 3 months ("seasoned") before you need to access them at closing. 


@ChrisinKC wrote:

Thanks for your response.  What do you mean by "seasoned"?


@Sandibeach22 wrote:

We had to have our down payment in the bank first.  I made sure it was transferred & seasoned to make things go smoothly.  Then it was 3 month of reserves here in FL.


 


Regarding reserves:  it has nothing to do with your scores and more to do with lender, as well as co-op/condo, requirements - at least in my market.  We were required to show 2 years' reserves and our scores were 800+; and our lender wanted to see cash equivalents for reserves (i.e. no retirement funds).

 


^^^Yes, exactly.  It is a matter of loan type too. Condos are treated differently than single family homes. Condo's generally need more reserves. There are specific requirements especially if the condo association doesn't have its own reserves. 

 

So product type (condo, SFR, TH) matters as well as individual lender requirements on top of Fannie or Freddie requirements.


So how is it that I am so lucky and there won't be any reserves required - at all? 

 

I'm worried that even though I'm being told now that there won't be reserves required that when I go to close, I'll have to back out at closing because I don't have any reserves.

 

Has ANYONE ever bought a house where there were no reserves required?  Maybe I should qualify that and specify only people who are not paying cash for their house.

 

 

Message 22 of 24
Valued Contributor

Re: Reserves required for mortgage

do you have a 401(k)?  if so, they will use that as your reserves.

AmEx Green NPSL | Amex BCP 16K | Citi Simplicity 10k | Discover IT 9K | Chase Slate 7.5K | Amex Hilton HHonors Surpass 7K | Capital One QuickSilver 6K | Home Depot 5k | Chase Freedom 4.5K | LOC 2.5K
Message 23 of 24
Established Contributor

Re: Reserves required for mortgage

 


@ChrisinKC wrote:

@StartingOver10 wrote:

@tacpoly wrote:

Most lenders do not want to see you moving money around at the last minute.  Ideally, you'll have all necessary funds liquid in your accounts, stable for at least 3 months ("seasoned") before you need to access them at closing. 


@ChrisinKC wrote:

Thanks for your response.  What do you mean by "seasoned"?


@Sandibeach22 wrote:

We had to have our down payment in the bank first.  I made sure it was transferred & seasoned to make things go smoothly.  Then it was 3 month of reserves here in FL.


 


Regarding reserves:  it has nothing to do with your scores and more to do with lender, as well as co-op/condo, requirements - at least in my market.  We were required to show 2 years' reserves and our scores were 800+; and our lender wanted to see cash equivalents for reserves (i.e. no retirement funds).

 


^^^Yes, exactly.  It is a matter of loan type too. Condos are treated differently than single family homes. Condo's generally need more reserves. There are specific requirements especially if the condo association doesn't have its own reserves. 

 

So product type (condo, SFR, TH) matters as well as individual lender requirements on top of Fannie or Freddie requirements.


So how is it that I am so lucky and there won't be any reserves required - at all? 

 

I'm worried that even though I'm being told now that there won't be reserves required that when I go to close, I'll have to back out at closing because I don't have any reserves.

 

Has ANYONE ever bought a house where there were no reserves required?  Maybe I should qualify that and specify only people who are not paying cash for their house.

 

 


My first house purchase did not require any reserves.  It was a single-family home, in a different market than our latest purchase -- although still a highly competitive high cost location, and it was when lending requirements were looser (although not as loose as the NINA loans era). 

 

Message 24 of 24
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