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Mortgage Glossary

Cash Reserves

Mike Starr·Reviewed August 2026

Cash reserves are liquid assets a borrower has remaining after paying the down payment and closing costs. Lenders may require borrowers to have a certain number of months of mortgage payments (typically 2–6 months of PITI) held in reserve as a safety net. Having strong reserves can help borrowers qualify for a loan or offset other risk factors like a lower credit score or higher DTI.