Government Shutdown or Going out of Business?
Many are worried how will the government shutdown affect VA loans. This government shutdown is definitely having an affect on mortgage processes nationwide but VA loans are not as affected. Government employees are being put on furlough which can have an affect on qualifying. However, the bigger picture is the shutdown of large government institutions such as the IRS.
IRS Government Shutdown affect VA loans?
This government shutdown does have it's affect on VA loans though as well as all other types of loan products. The impact affecting the processing of mortgage loans. There are certain government processes that lenders rely on. The most specific one is the order of your tax transcripts. The IRS has its tax transcript services completely shut down during this government shutdown. So no lenders are able to order these.
What are tax transcripts? They are an overview of your tax returns. "Why would you need tax transcript if I'm already providing you my tax returns?", you ask. Well unfortunately there are bad people out there and these people try to do whatever they can to get something that they want, including falsifying loan documents like tax returns. So it's a safeguard against mortgage fraud.
So the of ordering of tax transcripts has little impact on most of us. There will be a select few out there that have a processor on their VA loan that didn't think to order the tax transcript ahead of time. So yes, the government shutdown will affect their VA loans in processing. Let's be honest though. The government is not going to be closed forever. This is all temporary (we hope). Just realize, if you're buying a home and were getting close to closing when all of this took place, you're not the only one it affected.
Plus, while rates are down today, take this time to find out if you can get a better rate. Remember, VA loans are fully transferable. So if you have a rate higher than what can be provided at this time, it doesn't hurt to make your move and let this government shutdown affect VA loans in a good way.
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