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Old 06-01-2018, 03:31 PM
 
38 posts, read 60,329 times
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It is hard enough for some of us to have a good DTI. Overlays seem ridiculous in many cases. What is your take on this potential problem for buyers? We are looking at the USDA Direct Loan program. And would like to find a lender that won't jeopardize our journey all because of overlays. How would going through a Credit Union compare to finding a lender that advertises "No Overlays"? Give me your insight.
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Old 06-01-2018, 04:07 PM
 
10,196 posts, read 6,129,840 times
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Quote:
Originally Posted by cooljoebay View Post
It is hard enough for some of us to have a good DTI. Overlays seem ridiculous in many cases. What is your take on this potential problem for buyers? We are looking at the USDA Direct Loan program. And would like to find a lender that won't jeopardize our journey all because of overlays. How would going through a Credit Union compare to finding a lender that advertises "No Overlays"? Give me your insight.
I never heard of overlays .


You can get a loan with a bank that does USDA loans, or do USDA direct loan.

Direct USDA Loan: USDA funds the borrowers of these loans directly. In other words, your lender becomes USDA instead of a bank.

USDA is for low income. In some areas, the limit falls below $17,000 a year income.

https://smartasset.com/mortgage/what-is-a-usda-loan

Last edited by LifeIsGood01; 06-01-2018 at 04:17 PM..
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Old 06-01-2018, 07:04 PM
 
Location: Phoenix, AZ
1,108 posts, read 417,572 times
Reputation: 2601
Quote:
Originally Posted by cooljoebay View Post
It is hard enough for some of us to have a good DTI. Overlays seem ridiculous in many cases. What is your take on this potential problem for buyers? We are looking at the USDA Direct Loan program. And would like to find a lender that won't jeopardize our journey all because of overlays. How would going through a Credit Union compare to finding a lender that advertises "No Overlays"? Give me your insight.
Jeopardize your journey?


You either meet the lender's requirements or you don't.


The way to have a good DTI is don't live on borrowed money. Stop using credit cards every time you want something. Wait until you save up the cash to buy it. Meantime, pay down those credit card balances.
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Old 06-02-2018, 08:55 AM
 
226 posts, read 124,488 times
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Generally, overlays are the additional requirements a lender has that may be above and beyond what the insuring agency requires. This helps minimize their risk. You will be hard pressed to find a lender who truly has no overlays. It's just that some are more obvious than others.

One lender may allow you to meet the minimum USDA guidelines while requiring you to have 2 months payments in reserves after closing. Obvious. Another lender may not require the reserves, but they charge you 1/8% higher interest rate. Not obvious.
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Old 06-03-2018, 08:31 AM
 
Location: MID ATLANTIC
7,519 posts, read 17,286,639 times
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USDA Direct has no lender involvement.

No lender = no overlays
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Old 06-03-2018, 11:39 AM
 
226 posts, read 124,488 times
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Quote:
Originally Posted by SmartMoney View Post
USDA Direct has no lender involvement.

No lender = no overlays
Sorry, missed the "Direct" part.
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