Financial
Cash Reserves
The amount of money a borrower has left in savings after paying the down payment and closing costs. Lenders often require cash reserves equal to two to six months of mortgage payments to prove you can handle unexpected expenses. Having strong reserves can also strengthen your mortgage application and may help you qualify for better rates.
Why It Matters
Cash Reserves directly affects how much you pay for your home and how you build wealth through homeownership. Understanding the financial mechanics of your mortgage helps you make choices that save money over the long term.
Use mortgage calculators to see how cash reserves impacts your specific numbers. Even small differences in financial terms can add up to tens of thousands of dollars over the life of a 30-year mortgage.