Reserves
Savings left over after closing, often measured in months of mortgage payments. Lenders may require reserves for jumbo, investment and multi-unit loans to show you can handle a setback.
Also called: cash reserves, months of reserves, post-closing reserves
Related terms
The lender's review of your income, assets, credit and the property to decide whether to approve the loan. The underwriter often asks for more documents before issuing final approval.
A mortgage larger than the conforming loan limit for the area, so it cannot be sold to Fannie Mae or Freddie Mac. Lenders often require higher credit scores, larger down payments and more reserves.
An investment property loan qualified on the rental income the property produces rather than the borrower's personal income. Lenders look at whether rent covers the payment by a set ratio.
Short for principal, interest, taxes and insurance, the four parts of a typical monthly mortgage payment. Lenders use PITI, plus any HOA dues or mortgage insurance, to judge whether you can afford the loan.
The total amount the buyer must bring to closing, usually the down payment plus closing costs minus earnest money and any credits. The final figure is on the Closing Disclosure.