The world waited with anticipation as all experts predicted a rate increase is imminent. As I expected, the Fed didn’t raise rates. In fact, the statement they put out afterwards suggests we may not see a rate increase for some time to come. Earlier this year I said the first quarter of 2016 would be the earliest, now I think the Fed will stay indecisive far beyond that date and we may not see an increase until late 2016 and perhaps not till 2017. Inflation was to blame for kicking the can down the road. The current inflation reading is nowhere near the Feds target, thus the decision to leave rates unchanged. The real issue, as I see it is that inflation may not come around for some time to come as prices across the world continue to decline for most items as a result of a slower economy and much more efficient systems due to advancements in technology. With the decision to leave rates unchanged, cheap money continues to be abundant. Lenders are getting more aggressive with their underwriting as rates stay extremely low. In a recent transaction we refinanced a newly stabilized apartment building pulling out all of the equity investment in the property for our client. Given the recent rent increases and majority of the tenants being new, the challenge was to convince the lender that there had been a lot of work done to the property and the new valuation was justified even if the borrower had no cash equity in the transaction post closing! As always, a detailed analysis of your specific situation is the best way to determine what the most suitable loan is for your property. The wrong loan even at a very competitive rate is far worse than the right loan at the right rate!
CEO Of Empyrean Funding, INC.
Jacob Yadegar, CEO of Empyrean Funding & Management, INC., has been in the mortgage and loan industry for 20 + years. He is extremely passionate about his career and making sure his clients get the best service in the business. He has contributed greatly to many of his clients’ success stories.
His irrefutable devotion to his company, along with his experience and expertise, make Empyrean Funding a valuable leader in the mortgage industry.
Jacob also is the writer of the blog, “Money Matters”, where he shares his financial advice and tips with the world.