General Mortgage KnowledgeQuestion 173 of 400
In underwriting, 'reserves' generally refer to:
a.Liquid assets a borrower has left after closing, often measured in months of PITI
b.The lender's profit
c.Unpaid interest
d.Property taxes owed
Explanation
Reserves are the borrower's remaining liquid assets after down payment and closing costs, commonly expressed as a number of months of PITI, showing ability to keep paying if income is interrupted. They are not lender profit, unpaid interest, or taxes.
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