What are cash reserves and how much do lenders want me to have?

Cash reserves are the liquid assets you'd have left after covering your down payment and closing costs — proof you could keep paying the mortgage if your income hiccuped. Lenders measure them in months of your total housing payment (principal, interest, taxes, insurance, HOA). Many conventional loans for a primary residence require little or no reserves, but stronger reserves can improve your terms and help you qualify with a higher DTI. Jumbo loans often require 6–12 months, and financing an investment property or second home usually demands several months as well. Acceptable reserves include savings, money market funds, and a portion of retirement and brokerage accounts (lenders count vested retirement balances at a discount). Beyond the lender's requirement, keeping a few months of reserves protects you after closing, when surprise repairs are common. Build that cushion before you buy with wealthserene.com/tools/emergency-fund.