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Over the past two years we have experienced a lot of changes in mortgage lending. The underwriters on your mortgage loan will be checking to make sure you have the correct amount of reserve funds available for closing when you are buying a home.

On government loans (VA, FHA), lenders are required to verify the funds for closing and verify (usually using bank statements) that any earnest money or option fee were their own funds.

On conventional loans borrowers are required to have two months of payments in reserve after closing (full payment of P&I, Taxes and insurance , mortgage insurance and HOA Dues). In most cases these funds can be in a retirement account, and do not have to show as liquid assets. However, if the borrower is also getting a second mortgage, then that investor may require the funds in reserve to be liquid assets.

If the mortgage borrower owns other properties, they are required to show they have sufficient reserves for those properties’ monthly payments (2-6 months depending on type of loan,insurance required.) Even if the borrower owns the investment property outright, they still have expenses related to the property and therefore the lender may require additional reserves.

So if you want to get a mortgage loan – of any type – check with your lender to see how much money will be needed as reserves. The lender can make sure you are on track before you write a contract on a home. You will want to make sure you are using a competent loan officer that can help you determine how much to hold in reserves and the best way to secure that money so that the loan funds are the closing.

RREA’s in house lender is Jeff Wagner with On Q Financial. You can reach him by calling our office at 281.288.3500 Monday-Friday 8:30-5:30pm. If you need a Realtor, that same number can help you find one. At RREA, we always have agents available to show you homes and answer questions about properties. Give us a call today to get started buying your next real estate property.>”http:///search.htm?route=search&q=”;

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