RG 068 – What will happen to interest rates in 2017 with Joe Cucchiara
- Joe has been working in real estate for 15 years
- Joe has a podcast called Real Estate Radio Live
Nuts and Bolts
Joe has been working in the real estate world for 15 years and specifically in mortgage notes. Joe admits that mortgages might not be the most interesting subject for everyone however they are a necessary process and something that all investors need to understand. After 2008 the paperwork and controls around borrowing became even more difficult to understand and Joe saw an opening for a programme to help people get their heads around borrowing and so he started Real Estate Radio Live. Joe has been doing his podcast and radio show since 2011 and sees it as an education process for his listeners.
Lending in 2017
In 2008 the government and banks had a dream that everyone could own their own home and as such they lent money to anyone who needed it, regardless of hteir job status. This lending practice got out of control and reached its peak and crash in 2008. Looking forward into 2017 Joe has noted the a steadily increasing borrowing rate for the first time in a decade which will be good in the long term for the economy even though most home owners aren’t too happy with the news. Joe has also cautiously noted that the Fed might raise raised twice in 2017. It’s worth noting that even if the Fed raises rates by a quarter, this doesn’t automatically affect mortgage rates to the same degree as they aren’t directly linked. Mortgage rates would change but not by the same amount.
Advice for future borrowers
Currently the world of lending and mortgages is swamped with compliance and over-regulation and Joe is hoping to see an easing of some compliance over the next year. A lot of the rules were brought in to help borrowers understand their mortgage loans but it’s made things more confusing. However there has been some good regulation as now it’s much more difficult to mislead a consumer and oversell rates for your own benefit. With the upcoming change in rates Joe recommends that anyone who has home equity of a high rate credit card consolidate their debts while there is still time. He also notes that it’s still a great time to invest in real estate, so don’t be scared off by mortgage rates and be unemotional, think rationally and you can do well out of real estate investment.
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