If you are on the hunt for a home loan, you have most likely heard of mortgage lender overlays.
Mortgage lender overlays are simply additional rules and guidelines set by lenders, apart from those established by government agencies (FHA & VA) as well as government sponsored enterprises (Fannie Mae and Freddie Mac). Lender overlays provide additional protection to mortgage lenders to prevent borrower risk and default.
Each lender sets their own overlays, depending on their ability to handle risk and the prevailing economic conditions. In other words, overlays tend to be tougher in risky economic times.
By setting overlays and managing their risk levels, lenders can provide better mortgage loan rates to home buyers.
If you are applying for a mortgage loan, it is in your best interest to understand how lender overlays work. After all, lender overlays can significantly affect the rates and terms of your loan.
Here are some factors that could lead to stricter mortgage overlays:
In order to find a mortgage lender without overlays, get in touch with Mortgage Solutions. Our knowledgeable, experienced mortgage loan advisors can help you obtain loan products that do not require overlays.
From FHA to VA and Conventional, we offer clients the right loan products catering to their specific needs.