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How do jumbo lenders count reserves after closing?
How do jumbo lenders calculate the reserves a borrower needs to keep after closing, and what documents do they use to verify those funds? I’m curious whether the required amount is generally based on months of mortgage payments, or whether the calculation can depend on the lender and borrower’s overall profile.
I’d also like to understand how people separate that underwriting requirement from a personal repair fund. If more cash goes toward the down payment, the mortgage balance is smaller, but there may be less available for unexpected home repairs. Do lenders distinguish between funds that meet their reserve requirement and extra savings a borrower chooses to keep liquid?
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For reserve calculations, an account balance isn’t always the amount that qualifies. Checking and savings are generally straightforward to document, while retirement or brokerage assets may be treated differently under the lender’s rules, including consideration of access restrictions or valuation adjustments. A separate repair fund is a personal choice, not necessarily the amount underwriting will recognize as reserves.