Government Shutdown 2013 Could Effect Your Dream Home

You might be thinking that now is the perfect time to buy your dream home. According to a recent article in the Los Angeles Times, mortgage rates are at an all-time low since June. “Mortgage rates have tumbled for the third straight week, with Freddie Mac pegging the 30-year fixed loan at an average of 4.22%, down from 4.32% last week to the lowest level since June.”

But, not so fast. On Tuesday, October 1, 2013, the federal government partially shut down after Congress failed to pass a budget.

With the government shutdown 2013, your lender might not even be able to process your application! “A protracted government shutdown 2013 would hamper the ability of lenders to confirm borrowers’ incomes and identities, as well as threatening loans that are backed by agencies such as the Federal Housing Administration.”

Lenders processing loans that need tax transcripts, Social Security number verification or FHA financing may be most effected. Be sure to go over possible delays with your preferred lender. They should be able to tell you if the government shutdown 2013 will have an effect on your loan process. “Experts said mortgage seekers should discuss timelines and expectations with their lender, and inquire about longer commitments, longer rate locks and extension policies for each.”

Another article in the Los Angeles Times, says that a prolonged government shutdown 2013 could significantly hurt the real estate market. With each passing day the anxiety of those in the industry only increases. “An extended mortgage market freeze could further stall a housing recovery that has cooled after rapid price increases earlier this year. The threat comes just as mortgage rates are falling again, which normally would entice buyers.”

While the story continues to unfold, new mortgage applicants are still being asked to fill out paperwork. For the time being, it’s business as usual.