Home Jones
Phone 415-617-5448
E-mail Me
HOME PAGE



Mortgage topics (sitemap)
Milwaukee Mortgage Blog
 Home Loan checklist!
Milwaukee Realtors!
Want a higher credit score?
Home Buyer Reports
About Me


Reserves and Assets

When applying for a mortgage, whether you fall into the conforming or sub-prime lending criteria, many lenders require that you at least state, and may even ask you to verify reserves and assets held in liquid accounts.

Reserve and asset accounts like IRS'S, 401K and other accounts that will apply a penalty for early withdrawl are usually taken at a value of 70%. The 30% penalty takes into account the early withdrawl fees you would have to pay in order to receive the money from the reserve/asset account.

For certain types of loans, sometimes a certain amount of reserves are required. Reserves are liquid assets that you have in some type of account. They can be a in a 401k, IRA, Checking/Savings account, Mutual Funds, Money Market Account, stocks, bonds, etc... For example many lenders that offer 100% financing will require a borrower to have 2 months reserves in order to qualify for the loan. 1 month reserves is equal to your Principal, Interest, Taxes and Insurance Monthly Mortgage Payment.

The more risky the loan is for the lender the more reserves they may require. For example with most 100% financing programs for investment properties lenders require a minimum of 6 months worth of reserves and often as much as 12 months of reserves.

Often there is a "seasoning" requirement on these reserves. For example, if you need 2 months' reserves, and you go out and put the money in a bank that day, it may not be accepted by the lender. The funds must be "seasoned" in your account for at least a few months. There are also lenders who do not require the money to be seasoned. Check with your loan officer to find out all your options.

One reason why the lender requires assets and reserves is due to normal life events. Those events would be, lack of income due to illness, accidents, etc. When then normal life events happens and the home owner has reserves and assets then they are able to continue to pay their normal monthly bills without undue hardship.

Substantial Liquid Assets, including cash in checking or savings accounts, certificates of deposit, accessible qualified & unqualified retirement accounts, and exchange traded securities may be utilized as collateral or debt service reserves for your mortgage.



First Name:

Last Name:

Email Address:

Phone Number:

 Location:

Best Time to Call:

Questions / Comments:

 

Please visit my other websites at
:
Milwaukee Mortgage Lender
Wisconsion Mortgage Refinance
Wisconsin Mortgage Lender
Milwaukee Real estate agent
Loan Officer | 15 Year Fixed Rate Mortgage | Mortgages with credit scores 700 and above | When Lenders Compete Is That the Way To Go | Negative Amortization Loan | Super Jumbo Mortgage
This is not a commitment to lend. Restrictions may apply. Information is subject to change without notice. All loans are subject to credit approval. Equal Housing Opportunity.
To View Our Privacy Policy Please Visit privacy policy.