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January 19, 2023
Reserves are savings amounts that will remain after your house purchase is completed. They are considered emergency savings, which means that if you lose your job after purchasing a property, you will still be able to pay your mortgage. Assume your lender demands at least two months' worth of mortgage reserves following closure. If you cannot provide documentation of these monies (known as PITI, which we will explore later in the article), you may be unable to proceed with your application. This is why it is critical to have liquid reserves at this time.