---
title: "What Are Mortgage Reserves?"
description: "Understand what mortgage reserves are, why lenders require them, and how they differ from your cash to close."
url: https://homes-support.padzilly.com/en/articles/108-what-are-mortgage-reserves
collection: "Using Padzilly"
updated: 2026-08-04
language: en
alternates: [es]
---

# What Are Mortgage Reserves?

Understand what mortgage reserves are, why lenders require them, and how they differ from your cash to close.

Mortgage **reserves** are funds that your lender may require you to have **remaining after you close on your home.**

Unlike your down payment or closing costs, reserve funds are generally **not spent** during the purchase. Instead, they demonstrate that you'll still have sufficient financial resources after becoming a homeowner.

Depending on your loan program, reserves may be measured as a certain number of months of housing expenses, including:

-   Principal and interest
    
-   Property taxes
    
-   Homeowners insurance
    
-   Mortgage insurance (when applicable)
    
-   HOA or condominium dues
    

If reserves are required, Padzilly includes them in your **Total Cash Needed** so you have a more complete picture of the funds required to complete your purchase and satisfy your loan approval.

Not every loan requires reserves.