The recent government shut down is going to tremendously effect financed buyers moving forward. As it stands, there are federally mandated portions of the loan process - 4506-T and the social security administration verification. Those 2 pieces of the loan process have come to a screeching hault because those 2 departments of the federal government have closed their doors. VA, FHA and conventional loans are still being processed. USDA underwriting department has closed entirely due to the shut down.
What is the importance of the 4506-T form in my loan process? This form is used to verify income from the IRS and is used by lenders to verify that all their loans are saleable on the secondary market and that the lenders are not making sub-prime loans.
The social security administration is closed so if you are receiving social security and applying for a loan, the lender needs to verify your income with the Social Security Administration. Lenders are able to verify after the loan has closed as long as you supply your Social Security Card, picture ID and pay Stubbs to your loan officer during the application process.
Some loan officers have taken measures to protect themselves and their clients from this government shutdown and are able to process, fund and close these loans without the 4506-T form by selling loans directly to GNMA or FNMA for a slightly higher interest rate +/- .375%.
What this means for you as you buy and sell real estate this fall - make sure your lender has systems in place to help you obtain financing during this government shut down. Make sure your lender is able to sell loans directly to FNMA or GNMA or work around the 4506-T regulations. When the shut down ends, the IRS, Social Security Administration, and USDA loan processors will all be severely backed up as they resume business as usual.
What we can expect this fall from the real estate market: rates are likely to go up as one of the few ways loans can be completed and funded is to go directly through FNMA or GNMA which is more expensive. We have already seen the housing market slow down dramatically these last few weeks and expect to see this trend continue through the shut down as buyers will have more trouble obtaining financing to purchase the homes on the market.
Call a local Realtor or a lender for more information on how the government shut down will affect your home buying.
Chelsea Elwood, realtor with Keller WillIams East Valley - (602) 748-6136
What is the importance of the 4506-T form in my loan process? This form is used to verify income from the IRS and is used by lenders to verify that all their loans are saleable on the secondary market and that the lenders are not making sub-prime loans.
The social security administration is closed so if you are receiving social security and applying for a loan, the lender needs to verify your income with the Social Security Administration. Lenders are able to verify after the loan has closed as long as you supply your Social Security Card, picture ID and pay Stubbs to your loan officer during the application process.
Some loan officers have taken measures to protect themselves and their clients from this government shutdown and are able to process, fund and close these loans without the 4506-T form by selling loans directly to GNMA or FNMA for a slightly higher interest rate +/- .375%.
What this means for you as you buy and sell real estate this fall - make sure your lender has systems in place to help you obtain financing during this government shut down. Make sure your lender is able to sell loans directly to FNMA or GNMA or work around the 4506-T regulations. When the shut down ends, the IRS, Social Security Administration, and USDA loan processors will all be severely backed up as they resume business as usual.
What we can expect this fall from the real estate market: rates are likely to go up as one of the few ways loans can be completed and funded is to go directly through FNMA or GNMA which is more expensive. We have already seen the housing market slow down dramatically these last few weeks and expect to see this trend continue through the shut down as buyers will have more trouble obtaining financing to purchase the homes on the market.
Call a local Realtor or a lender for more information on how the government shut down will affect your home buying.
Chelsea Elwood, realtor with Keller WillIams East Valley - (602) 748-6136
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