Bought fixer with cash, but want to get a mortgage, do cash reserve requirements apply to me?

6 Replies

Hi mortgage pros,

I bought my first fixer-upper with cash, now that the remodel is nearly complete, I'm looking to get a mortgage on the house. I'm wondering if cash reserve requirements apply to me? Once the loan closes, I would have plenty of cash, so I was wondering how my current liquid assets are factored in to the mortgage application.

Thanks!

He'll need 6 months of reserves at 720 + fico on SFR if he has 1-4 financed properties and 12 months reserves prior to cash out if his fico is 700 +

These are just general terms required the approval might require less is certain circumstances.

Albert Bui, Lender in CA (#345453), WA (#345453), TX (#345453), and TN (#345453)
949-514-5106

Thanks @Albert Bui , since this is an investment SFR, are the reserves requirements only for 6 months PITI of this loan, or will they also require reserve amounts inclusive of other mortgage/rent payments I have obligations on?

Thanks for your help!

Originally posted by @Jason Hillier :

Thanks @Albert Bui , since this is an investment SFR, are the reserves requirements only for 6 months PITI of this loan, or will they also require reserve amounts inclusive of other mortgage/rent payments I have obligations on?

Thanks for your help!

 Yes they will 2 full months for each other property if you have 1-4 and 6 months for each property if your 5-10. This is just for conventional financing.

The subject property you may need 6-12 months plus the above for other properties so it basically means if you want to cash out you basically have to manage your cash in a manner which suggests you "dont," actually need it since you have a ton of reserves.

Albert Bui, Lender in CA (#345453), WA (#345453), TX (#345453), and TN (#345453)
949-514-5106

Hi Jason, whats the purpose of the mortgage? To free up your cash? For what purpose?
You may be able to get a hard money loan for 2 years if you need the money for another investment that will yield a higher return with your money. After the two years, you may be able to get a conventional loan. Or use this property as collateral for another property. I didn't see the property value or loan amount request in your original question.

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