How the Government Shutdown Could Affect Home Loans, Credit

Concerns are growing as the government shutdown could impact the housing market and credit history for hundreds of thousands of people. 

Mortgages may take longer to process because of the shutdown if it's tied to a government United States Department of Agriculture, VA, or FHA loan. If buyers need government documentation from the Internal Revenue Service (IRS) to prove their income, they may face delays. Those delays could cause sellers to back out and take another offer, which could leave the buyer stuck out.

"Those buyers put down appraisal money, option money, and they pay for inspections," said Rodney Anderson of Supreme Lending, a local mortgage lender. "A lot of time, buyers may get their earnest money back but all the other things that they paid for would be a loss of money, and more importantly a loss of the house they are wanting to buy."

Anderson is an expert in mortgage lending and refinancing with Dallas-Fort Worth and he says this could be the calm before the storm.

"This thing has a ripple effect throughout the United States, Texas, and DFW economy. Just think, if someone is not getting paid, they will have a tough time paying their bills," Anderson said. "If they miss payments, a mortgage payment, car payment, or credit card payments that can stay on your credit report for seven years. So the government may be shutdown for over 30 days, but the long term effects for some of these people can be up to seven years if they miss payments."

Some realtors are also concerned about the drop in confidence among buyers long term as well.

In a recent survey by the National Association of Realtors, nearly 25 percent of realtors are experiencing an impact from the shutdown.

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