Why lenders want to see cash on hand — and how much you really need.

When it comes to qualifying for a jumbo mortgage, your income, credit score, and down payment are important — but there’s another critical piece of the puzzle: reserves.

👉 Jumbo lenders want to know that you can weather the unexpected — and still make your mortgage payments.

Here’s what reserve requirements really are, how they’re calculated, and how much you’ll need to set aside.

---

✅ What Are Mortgage Reserves?

Reserves are liquid assets you have available after your down payment and closing costs are paid.

They show that:

• You can handle your monthly housing costs
• You’re prepared for emergencies or changes in income
• You have financial stability beyond the loan itself

Reserves are not spent at closing — they’re just proof you have additional funds available.

---

🧮 How Are Reserves Measured?

Lenders calculate reserves in terms of months of full housing payments, including:

• Principal
• Interest
• Taxes
• Insurance
• HOA dues (if applicable)

So when you hear “6 months of reserves,” that means you need enough liquid assets to cover 6 months of your total monthly mortgage payment — even after you close.

---

💰 How Many Months of Reserves Are Required?

Loan Size	Reserve Requirement (Typical)
Up to $1.5M	6 months
$1.5M – $2M	9–12 months
$2M+	12+ months, depending on profile
Investment or second home	12–18 months or more

Requirements can vary by:

• Loan type (fixed vs. ARM)
• Property use (primary vs. second home)
• Lender or investor guidelines
• Credit score and DTI ratio

💡 The stronger the rest of your file, the more flexibility you may have on reserves.

---

💡 What Counts as Reserves?

✅ Checking or savings accounts
✅ Money market funds
✅ Vested retirement accounts (401k, IRA)
✅ Stocks, bonds, mutual funds
✅ Business accounts (with documentation)
✅ Cash value in life insurance (case-by-case)

📘 Lenders often discount retirement funds slightly since they’re not fully liquid.

---

🧠 Tips to Strengthen Your Reserve Position

✅ Don’t drain all your savings for the down payment
✅ Show multiple asset sources (checking + 401k + brokerage)
✅ Document transfers or large deposits clearly
✅ Avoid big purchases or withdrawals before closing

We’ll help you structure your application to maximize what counts toward reserves — and reduce friction in underwriting.

---

🏢 Why PRMI?

At PRMI, we help you:

• Understand and meet jumbo loan reserve requirements
• Strategically position your assets for approval
• Offer jumbo loans with flexible reserve guidelines
• Navigate complex borrower profiles with in-house support

Our goal is not just to approve the loan — but to structure it in a way that protects your long-term stability.

---

👇 Want to Know How Much You’ll Need in Reserves?

Let’s run the numbers and create a custom jumbo loan plan that fits your goals — and your cash flow.