What’s an underwriting overlay?

What is an underwriting overlay? Why did you get turned down for a mortgage? Why did one lender turn you down, but the other approved you?

Different lenders play by different rules.

There are industry standard mortgage guidelines that every lender has to follow.

However, some lenders and banks have extra guidelines. These extra guidelines are put in place to make the loan stronger and less likely to lead to a foreclosure.

Different lenders analyze risk in different ways.

So if you get turned down by one lender, don't give up there. First, find out why you got turned down, and then ask the lender if that's a standard guideline or an underwriting overlay.

If they say it's an overlay, then it may be smart to go looking for a different lender.

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