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Im talking, of course, about mortgage reserves, an often overlooked and misunderstood piece of the financing puzzle. What Are Mortgage Reserves. Reserves are a very curious part of the loan application process. The fact is that most residential borrowers do not need reserves, but at the same time it would be very smart to have them. When lenders originate a mortgage, they want as little risk as possible.
This is why they have minimum requirements for credit scores and down payments. Its also why they limit the amount of debt you can carry for your particular income.
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