Category Archives: Political

Will a so-called “government shutdown” affect the mortgage market?

It could, depending on the type of loan you are seeking and what still needs to be done on your loan.

There are several government agencies that come in to play when you seek a home loan.

  1. First of all, borrowers will have their tax returns verified through the IRS with a form 4506t.  The IRS has said its staff will still be operating in the event of a so-called “shutdown” but I wouldn’t take that for a definite that you can get the tax transcripts in a timely manner.  If you are seeking a mortgage, get your mortgage loan officer to order them asap!
  2.   Government insured programs such as VA Loan, FHA loans, and the USDA require a special report called CAVIRS to be run beforehand.  Once again, get it done asap.  If you don’t have a clear CAVIRS, your loan can’t be approved.
  3. Third, the USDA has indicated that its staff might be furloughed in the event of a “shutdown” and that will affect the final approval from USDA that is a part of getting an RD loan.  If you have an RD loan and it’s not ready to close right now, you should have a conversation will all parties about a possible extension if there is a “shutdown.”
  4. Furthermore, the RD’s eligibility map is in limbo over the budget.  Right now, the map is not fully accurate as to what properties are in an eligible area.  I would be hesitant to rely on an RD loan in an area such as Kuna, where they have indicated it is coming off the eligible areas.  We won’t know for sure what parts of Kuna will be eligible and what parts wont.

Anyway, the next week or two could be very exciting to say the least.  The key is to be proactive in the event of a “shutdown” of the Federal Government.

 

Interest rates have moved up since the Presidential debates began.

Most people realize that a Mitt Romney administration would probably be better for business in this country. In my market, Boise Idaho, its almost assumed that he will be the next president.

The low interest rate environment is a function of many factors including a pessimistic outlook for business under the present administration.

In the mortgage industry, I have seen that a negative outlook on the economy or bad news in general tends to make or keep interest rates low. A strong economy or positive outlook tends to make interest rates increase.

With the recent presidential and vice presidential debates and the strong showing of Mitt Romney and Paul Ryan, their polling numbers have increased. This gives many the reason to think they will win the election and better times are coming. I think that interest rates will continue to increase gradually until the election.

If the President wins reelection, expect the rates to drop suddenly again. Should Romney be victorious, rates will most likely continue to increase.

A better economy will mean more, better quality jobs and that will mean more home purchases will be made.
For those who are sitting on the fence about refinancing their mortgage, this might be your last chance to grab those interest rates in the 3 percent ranges.

Should you be considering refinancing your Idaho mortgage? I would say run to your local, Idaho mortgage professional and apply today. 2 weeks from now you might miss the boat!

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