How a shutdown could hurt first time home buyers

Updated: 09/30/2013 11:39 PM
Created: 09/30/2013 10:52 PM WHEC.com
By: Lynette Adams

This shutdown could affect you and the people you know in a lot of different ways.

One way is for people trying to buy a home right now. We've learned that any new mortgages through the government will be put on hold.

News10NBC spoke with a realtor and a mortgage specialist Monday, about the impact of the government shutdown.

People who are right in the middle of buying a home and are using a federally backed mortgage loan like FHA or a veterans loan. It could mean those closings will be put on hold.

Phyllis Haberer and her husband Terry Wolak work together to help families secure a piece of the American dream. Wolak is a sales associate with Holly Creek. Haberer works for Premium Mortgage. If you are just starting your search for a home they say you may not be affected if there's a shutdown. It's people who are already into the process, who are waiting for mortgage approval.

Government departments that provide mortgage information like income tax verification, may be closed. Wolak says there have been signs for some time of a possible government shut down. For that reason he's been steering his clients away from government back mortgages.

“Conventional is the best way to go right now unless you're going 10 percent down with an FHA loan. Va there's certain perks to that and obviously you don't want to steer people away from that. And USDA is a great loan as well...but my first time home-buyers there's some great programs out there, conventional safer, lower risk. You don't have to worry about government intervention like this happen,” said Wolak.

Phyllis said, “We'll maybe look for alternatives. For example one of the things we have to do is make sure people filed their taxes. We have to get what's called the tax transcripts and we understand that part will be shut down. So maybe what we'll do is get verification from H&R Block that they filed their taxes or their accountant and we'll put that in the file for the underwriters for the time being.”

Haberer says you could see some delay if the government shuts down, but she says people should not stop looking for a home.


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