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.

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.

Yeah what's that saying??

A banker/lender will be running to you to give an umbrella when the sun is out but take it away as soon as it starts raining! lol

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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