Reserves
Liquid funds you must demonstrate after closing — not applied to the down payment or closing costs. Measured in months of PITI. Conventional loans often require 2 months; non-QM programs commonly require 6–18 months. Having reserves well above the minimum is one of the strongest compensating factors available.
How does this affect your loan? Estimate self-employed qualifying income with the DTI calculator, or read the self-employed mortgage guide.
Related terms
- LTV (Loan-to-Value Ratio) — Loan amount divided by the appraised property value. A $320,000 loan on a $400,000 home is 80% LTV. Lower LTV…
- CLTV (Combined LTV) — Total of all liens on the property (first mortgage + any HELOCs or second mortgages) divided by property value…
- Pre-approval — A conditional commitment from a lender based on a full review of your income documents, assets, debt obligatio…
- Pre-qualification — A preliminary, informal estimate of how much you might borrow, usually based on self-reported information with…
- Underwriting — The lender’s detailed verification and risk assessment of your application. An underwriter reviews income, ass…
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Educational definition only — not financial, legal, or tax advice. Programs and limits change; verify current terms with a licensed professional.