Cash reserves or credit ???

[Isiah Ferguson]

Hello, BP. 

When you are going to refinance your property. I believe 1 of the requirements are "cash reserves" to cover 6 months to 12 months of funds to cover the mortgage. Instead of having cash, can a person use Credit Cards as reserves to qualify as a cash reserve requirement??

[Tommy F.]

@Isiah Ferguson In my experience the reserves had to be cash and/or cash equivalents, i.e. CD, stocks, bonds, mutual funds. I used my 401k statement. I didn’t have to liquidate, but simply demonstrated sufficient funds that if push came to shove I could liquidate, pay penalty and taxes, and still have plenty for mortgage reserves. Credit card cash advances are just adding more debt to situation.