If you’re like most people in the market for real estate these days you’re probably wondering how the government shutdown is affecting your ability to buy a home. Many government agencies like the FHA, IRS, VA, and Social Security Administration are facing cut-backs and furloughs that do affect the mortgage and housing market.
Here’s how it might be affecting you or your plans to buy a home.
If You Are Currently Buying a Home:
- Tax Return Verification
Mortgage lenders are required to verify that you’ve filed tax returns (usually for at least the most recent 2 years). During the government shutdown, the IRS is not processing requests for verification that your tax returns have been filed. Most mortgage lenders have announced that they will be closing loans without tax return verification; however you may face additional hurdles being approved for a mortgage if you are self-employed due to the necessity of having your income verified by tax returns. In addition, some consumers have reported that some banks are not waiving their requirement for tax return verification before closing a loan. Check with your mortgage lender or bank what their policy is regarding verification of your tax return as your closing may be delayed if verification is not available.
- Social Security Number Verification
In some cases, lenders require your social security number and identity to be confirmed with the Social Security Administration. While this applies to a small number of home-buyers, if your identity needs to be confirmed you may experience a delay in closing of your home.
- USDA Loans Will Not Proceed Until the Shutdown Ends
The US Department of Agriculture personnel is on furlough until further notice. If you have a loan in process that is a “USDA” loan, your loan will be unable to proceed until the USDA office is operational and able to approve your loan. If you have a USDA loan in process, contact your lender, Realtor, and attorney to discuss the timeline of your transaction. Your mortgage commitment date and/or closing date may have to be delayed until the shutdown ends. Alternatively, you may want to re-apply for mortgage financing that is not USDA so that you can continue the purchase of your home without need for UDSA approval.
If You Are Thinking of Buying a Home:
- Still a Booming Market in Boston
The housing market in Boston is still booming, with many great properties still hitting the market. In the grand-scheme of the housing industry, the shutdown is having a limited effect on your ability to buy a home. Uncertainty about the economy has also helped mortgage rates stay low so that monthly mortgage payments are many times less than what you would pay to rent in Boston.
- Mortgage Pre-Approval Paperwork
Most home buyers need a mortgage preapproval before making an offer for a property listed for sale. When you get pre-approved, ensure that you provide your lender with all necessary paperwork, including 2 years of tax returns. A strong and thorough pre-approval will help get your offer accepted and make the mortgage approval process smoother despite some of the potential “gotchas” listed above. To begin the pre-approval process click here.
If you were thinking of buying a home with a USDA loan, ask your mortgage loan officer to present alternative loan programs that you will qualify for.
In times of uncertainty, rely on the trusted real estate professionals whose job it is to navigate the process for you. Your Realtor, mortgage Loan Officer, and Real Estate attorney will advise you and walk you through how to buy a home…even when the government is shut down!
Today's story is provided by Craig Barber of Fairway Independent Mortgage in Boston MA. For a free mortgage consultation click here or call Craig at 857-300-6777.