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Reserves

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Anonymous
Not applicable

Reserves

Do lenders commonly require a certain # of months worth of payments in reserve? We will be cutting it close to save up the rest of the down payment money needed before applying in Feb. I will be right at 50-51% DTI, self employed. 3.5% down FHA and mid mortgage score is 660. 

Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Reserves

typically FHA does not require reserves - your loan officer will let you know if it is necessary for the type of loan you are getting. Requirements can vary across loan programs

Message 2 of 6
Calidreaming
Regular Contributor

Re: Reserves

Yup not usually needed for FHA. Almost all jumbo loans require them. For conforming loans it depends on the lender but there are many that require no or very low reserves. You are more likely to be required to come up with reserves if there's something in your profile that makes you a higher risk-- credit score is low, FYI is high, low down payment, etc.
Message 3 of 6
Anonymous
Not applicable

Re: Reserves

Also 401k, IRA, and HSA accounts can be counted as reserves by many lenders for many loans types

Message 4 of 6
Anonymous
Not applicable

Re: Reserves

It depends on the loan program and what automated underwriting says. Remember, typically 60% of retirement and investment accounts can be considered reserves as well as long there isn't a clause saying they can't be touched under any circumstance until retirement age (sometimes the case with government employees' retirement accounts).

Message 5 of 6
Anonymous
Not applicable

Re: Reserves

Unfortunately I do not currently have anything in retirement. 

Message 6 of 6
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