Often there is a "seasoning" requirement on these reserves. For example, if you need 2 months' reserves, and you go out and put the money in a bank that day, it may not be accepted by the lender. The funds must be "seasoned" in your account for at least a few months. There are also lenders who do not require the money to be seasoned. Check with your loan officer to find out all your options.

The more risky the loan is for the lender the more reserves they may require. For example with most 100% financing programs for investment properties lenders require a minimum of 6 months worth of reserves and often as much as 12 months of reserves.

For certain types of loans, sometimes a certain amount of reserves are required. Reserves are liquid assets that you have in some type of account. They can be a in a 401k, IRA, Checking/Savings account, Mutual Funds, Money Market Account, stocks, bonds, etc... For example many lenders that offer 100% financing will require a borrower to have 2 months reserves in order to qualify for the loan. 1 month reserves is equal to your Principal, Interest, Taxes and Insurance Monthly Mortgage Payment.