Posts

Cash Reserves After Closing – How Important Are They? Inflation…Or Not

Four of our borrowers starved to death shortly after moving into their homes last year. This is because our poor borrowers had no money to buy food because most loan programs do not require any cash reserves in a buyer’s bank account after their loan closes. In other words, most loan programs allow borrowers to […]Read More

“Reserves” – Why & When They Are SO IMPORTANT!

WHY TWO NEARLY IDENTICAL BORROWERS GOT 1/2% DIFFERENT RATES We recently had two nearly identical borrowers get rate quotes that were 1/2% different on the same day they were quoted and here’s why: I often blog about The 13 Factors That Influence A Borrower’s Mortgage Rate. And the above two borrowers were nearly identical for […]Read More

Major Purchases Prior To Close Are OK If Cash Is Ample; No Financing

Borrowers are usually told not to make any major purchases prior to buying a home or while they are in contract. This is b/c major purchases can either deplete necessary cash reserves or require additional borrowing or financing that might impact qualifying (the new debt might push debt ratios too high). If a borrower has […]Read More

“Reserves;” What Are They? When Are They Necessary?

“Reserves” include the liquid funds available to a borrower after a transaction closes. In other words, reserves are funds left over after all down payment and closing cost funds are paid into escrow. For FHA buyers and conventional buyers of single-unit, owner-occupied properties, reserve-requirements are rarely an issue. Most owner-occupied loans require little to no […]Read More