The Mortgage Process and the Federal Shutdown

The 20/20 team and Movement Mortgage are getting a lot of questions about how the government shut down is effecting the mortgage market.

In short, the shutdown creates uncertainty in the markets. That uncertainty leads to safe spending of money/buying of investments which means that rates will drop. Mortgages are bonds and when there is fear and uncertainty, traders will buy bonds which have a fixed returns. This is why mortgage rates go down with bad economic news and go up with good economic news. When stocks rally, rates go up as well so there is usually a loose correlation between the stock market and interest rates.

While lowering rates, the shutdown is also causing some turmoil within the mortgage process. The number of checks and double checks on an applicant done by underwriters and processors these days are beyond comprehension. Some of these checks and double checks involve talking with the IRS or other government agencies. When we in mortgage can’t verify information, the loan can not fund/close. Luckily Movement Mortgage processes and underwrites quickly and very early in the process. Our closings in general have not been effected. However at some point, if this shutdown drags on, it is possible that closings will be delayed mostly b/c of not being able to verify info required by the federal government.

In the meantime, money is flowing, loans are closing, people are buying houses, and it is business as usual in mortgage.

With rates pushing back down in the most recent month, it is no doubt a great opportunity to lock in a low rate if you are thinking of moving in the future.

Feel free to contact The 20/20 Team  or call me if you have any specific questions.

Greg Cowart

 

Mortgage Consultant – Movement Mortgage

804.306.6463 or greg.cowart@movementmortgage.com

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