Assets are also considered when evaluating capacity. Borrowers who have an abundance of liquid assets at the time of closing statistically have lower rates of default on their mortgage. This is termed as reserves by the industry. For example, with a total mortgage payment that is $1,000 a month and the borrower has $3,000 left after paying the down payment and closing costs, the borrower has three months reserves. Underwriters also look closely at bank statements for incidences of NSF's (non-sufficient funds). If this happens regularly, this is a red flag with the underwriter because this indicates that the borrower doesn't know how to manage his or her finances.