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I only have cash reserves for 20 out of 24 months. What are the chances that underwriting will approve anyway?

by fiona871 from Barkhamsted, Connecticut. Dec 21st 2015 Reply


William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,917 contributions

More info needed, specifically the type of loan your applying for and whether or not it's owner occupied, 2nd home or investment.. as the rules are different for each one.. but in general, if your within the "conforming" loan limits of $417K, then when your file is run through the automated underwriting system, then the automated findings will state how much reserves will be required.. But for Jumbo financing, that falls under "non-conforming", meaning every lender who offers this type of financing will have their own set of underwriting rules rather than a "conforming" set.. so, every lenders reserves requirement will be different.. but even with all that, rarely is there a necessity for 24 months reserves.. 0 to 6 months is common.. For rentals, 12 months.. but rarely do you see 24 months.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Dec 21st 2015
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Dotty Owens (do1025)
#25 ranked lender in Connecticut - 18 contributions

Hi. Exactly what are you trying to do? What do you need 24 months reserves for?

Dec 21st 2015
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What are you trying to do more info is required.

Dec 21st 2015
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Need more info

Dec 21st 2015
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Nikitas Kouimanis (MrMortgage)
#8 ranked lender in New York - 102 contributions

Need more info

Dec 21st 2015
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Larry Gray (lgray_312_247)
#562 ranked lender in California - 1,127 contributions

If you are in the middle of a home purchase loan and you are told you need 24 months reserves, then your loan broker or loan officer ought to be able to able totell you for certain whether the Underwriting can make an exception. Otherwise, none of us who answer questions at this website will be able to answer you question. Most loan programs I provide require 0 up to 12 month reserves. It would be a fairly unique loan to require 24 months of reserves. The reserves are established based on the total monthly expenses from the loan you acquire. So after your loan funds your savings (including a significant percentage of retirement funds) when divided by total monthly payment comes out to 20 months, if you have it calculated correctly.

Dec 21st 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,515 contributions

Missing huge amounts of information... But I am not familiar with any loan program requiring 24 months of reserves. About the only time you see big reserve requirements is when financing investment properties, and that is only 6 months of reserves per property. I would contact a local mortgage broker in your area. Give them a full application, and get a second opinion.

Dec 22nd 2015
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,225 contributions

Sounds like a jumbo or portfolio loan requirement, if your lender does not have an option you may want to check with other lenders. As stated above, 24 months is not normal but not terribly unusual either depending on the loan amount, occupancy, loan to value, etc. Some lenders allow exceptions for otherwise strong borrowers, others do not. I'm licensed in Conn (originally from the Berkshires) and would be happy to look into options for you pdumouchel@primelending.com - otherwise good luck with it!

Dec 22nd 2015
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