What Is a Mortgage Cash Reserve?

Hello and welcome to Houston first time home buyers edition. It is Sunday. An overcast Sunday, but, still Sunday. We hope you are enjoying your Labor day weekend. Today's topic is, what exactly is a mortgage cash reserve. Simply put, mortgage cash reserve are funds, lenders can require you have set aside that is easily accessible, to cover your mortgage payments in the event of unexpected financial difficulties, such as loss of job.

A mortgage lender can require a cash reserve of 1-6 months to help get your loan approved, if your credit score is low. Cash reserves are typically measured in months. For example, if you are in the process of buying a home with an expected monthly mortgage payment of $2,700, and the lender require three months reserves, you will need to show proof of $8,100 in liquid assets, that is easily accessible to you. 

As always, thank you so much for stopping by. Remember, if you are thinking of purchasing your first home, please give us a call 713.204.8013 or Email us. We are here to help. We have been helping Houston first time home buyers since 2011 and we can help you. I hope you have an amazing day. Until next time...Diana