.png)
What are reserves in a mortgage?
Mortgage reserves are funds or eligible assets a borrower still has available after paying the down payment and closing costs. Lenders usually express reserves as months of the new housing payment (PITIA) and may require a minimum amount to show the borrower can keep paying if income is interrupted.
Reserves are a cushion, and lenders tend to weigh them more heavily on investment properties, larger loan amounts and files with other layered risk. Eligible sources commonly include checking, savings and investment accounts, with retirement accounts sometimes counted at a discount.
Requirements vary widely by program, property type and borrower profile, so there's no single number to quote.
The formula
=
