Tuesday, August 19, 2014

Are Loans Getting Easier?

There have been a lot of articles in the press recently about some lenders relaxing their lending standards to make it easier for more people to qualify for a mortgage.  What does that mean?  Here's what you need to know:

When a lender sells a loan to a borrower, the lender needs to make sure that the underwriting guidelines (the rules that say whether you get approved or not) are met.  Once the loan closes and you move into your house, the lender sells the mortgage on the secondary market.  They sell it to Fannie Mae, Freddie Mac, Ginnie Mae, or some other smaller company. These companies then group a lot of mortgages together, and they securitize them, meaning they turn the mortgages into bonds, which are then sold to big investors.  That's how lenders keep the mortgage money flowing to borrowers.

If the lender intends to sell the loan to Fannie Mae, for example, they need to make sure that they are following the Fannie Mae underwriting guidelines, or Fannie Mae won't buy the loan from them.

The stricter underwriting standards that some lenders are now relaxing are not the Fannie Mae guidelines, but their own, self-imposed guidelines that are in addition to the Fannie Mae guidelines.  These are known as underwriting overlays because they are laid on top of the Fannie Mae guidelines, making it more difficult for a borrower to get approved for a loan.  

So some lenders are making it a little easier to get a loan, but listen to this:

We sell our loans directly to Fannie Mae and Freddie Mac, so we have NO UNDERWRITING OVERLAYS! 

What does this mean for you?  It means that we don't have any underwriting overlays to get rid of.  If we make sure the Fannie Mae guidelines are followed, we approve your loan.  We always follow the guidelines, so when we give you a pre-approval, that loan is going to close.

Have questions about anything related to a mortgage?  Give us a call and see why they call us The Mortgage Experts.  

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  Call us if you want to use the best lenders in Colorado!  

Make sure you check out our web site:

By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

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