Reserves are funds the lender requires to be paid at closing if the borrower decides to escrow their taxes and insurance. In other words, reserves are used to determine the number of months and total amount of funds needed to establish an escrow account for a new loan. These reserves vary until tax certificates and all insurance documents have been submitted to finalize the total amount needed. The funds are determined by the county and state where the subject property is located. All tax payments must be current as well. These are a few reserves needed that may need to be funded:
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