Mortgages can be confusing, to put it mildly. So we though we’d help you out with some guidelines.

Guidelines Graphic

Are the qualifications for a program at one bank the same as the programs at another bank? What is the difference between FHA, VA, Conventional, USDA, Portfolio, Jumbo and Private Money mortgages? What is mortgage insurance and do you have to pay it? What is the difference between a fixed rate, adjustable or short term fixed mortgage?


It is our mission at Avelloe to properly explain and educate our clients about the many programs and options available and to effectively communicate those options in a clear and concise manner in order to make sure that our borrowers are matched with the proper mortgage that fits their unique qualification, situation, wants and needs.


It is extremely important to understand that there are anywhere from one to three levels of qualifications in every mortgage program. The first is known as the guidelines. Guidelines are rules that are created by a bank in a portfolio product or by the secondary market (where mortgages are sold and traded) that decide on a macro-economic level who qualifies for what mortgage program and where it is priced.


The next level of qualification is called an “Overlay”. An overlay is a bank specific guideline (on a non-portfolio product) that is used by their underwriters to further restrict who they want to lend to. Common overlays are DTI (debt to income ratio – 36,42,50,+??), FICO scores (will they lend to a Borrower with a 580 score or only 720 and above) and LTV (Loan to Value – what is the equity position required in the property?).


The third level of qualification has to do with mortgage insurance companies and whether or not mortgage insurance is even needed. It is extremely important for people to understand that if they want more than one bank’s options and pricing they need to contact a fully independent Mortgage Broker like Avelloe Mortgage and get the education they deserve.