Interest rate raise
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Interest rate raise (by Richard [MI]) Sep 22, 2022 9:37 AM
       Interest rate raise (by Larry [MN]) Sep 22, 2022 10:27 AM
       Interest rate raise (by mapleaf18 [NY]) Sep 22, 2022 1:59 PM
       Interest rate raise (by Hoosier [IN]) Sep 22, 2022 5:42 PM
       Interest rate raise (by MikeA [TX]) Sep 22, 2022 7:04 PM
       Interest rate raise (by Jeff [OH]) Sep 23, 2022 8:04 AM

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Interest rate raise (by Richard [MI]) Posted on: Sep 22, 2022 9:37 AM

As we all know by now, the fed has jacked the interest rate again yesterday.

I saw some good advice a day or so ago on here that advised us to refinance any HELOC's that we might have because there was a good chance that the lenders would call them due. Also to roll any variable interest loans into fixed rate ones.

I agree and thanks for the advice.

One other thing- news today is talking about how this latest round of interest rate hikes is going to cause job layoffs.

As a landlord with C type tenants, I am keeping close eye on them because many , unfortunately, have "disposable" type jobs and these type jobs are often the first to get laid off. I'm thinking that it's a good idea to be more careful than normal about screening if the potential tenants have these disposable jobs.


Interest rate raise (by Larry [MN]) Posted on: Sep 22, 2022 10:27 AM

Why would lenders call in HELOCs? They are almost always variable rate. Lender just raises the rate. More money flows in.

Interest rate raise (by mapleaf18 [NY]) Posted on: Sep 22, 2022 1:59 PM

Yeah I wondered why they would call in ARM/HELOCS when the payment continues to be on time and they are lapping up the excess interest?

Anyhoo, just confirmed with my local credit union. I'm locked in at their 6.25% fixed rate first week of October. Throwing an extra 10K at it first as per CU.

Interest rate raise (by Hoosier [IN]) Posted on: Sep 22, 2022 5:42 PM

Can't speak to your area, but I think the reverse may be true for layoffs. McDonalds is now paying $15/hour and begging for people. I think unemployment at the low end will remain's more the mid level and higher that I think will experience job losses. Nearly every restaurant we go to needs, servers, bartenders, etc. I don't see that changing in the near future.

Might be a good idea to see where local places are hiring, and send a letter to all tenants that if they experience a job loss, here is a list of companies hiring and their published hourly rates...give them phone numbers and so on...make it easy for them.

Some on here will say "why should I have to help my tenant find a job?" You don't "have to"...but as Brad20,000 once told me..."would you rather be right, or be rich?"

Be rich!

Interest rate raise (by MikeA [TX]) Posted on: Sep 22, 2022 7:04 PM

Why would lenders call a HELOC? Simple, banks are risk averse. When the economy starts to contract then jobs go away. When jobs go away the demand for rentals reduces. When the demand for rentals reduces landlords profit is at risk, particularly when their expenses increase at the same time (interest). When landlord profit is at risk the bank gets nervous. When the bank gets nervous HELOC's are called to eliminate the risk.

It has happened multiple times in my lifetime. I personally have purchased properties from an investor who was stuck when his HELOC was called and he had to unload them quickly.

Interest rate raise (by Jeff [OH]) Posted on: Sep 23, 2022 8:04 AM

Been doing this since 1999. Have 40+ units…have always had 4 Helocs (most my bank allows). Have never had a HELOC called in or had to lower rents. Yes…even through the Great Recession. Now I will admit being in the Midwest things are more steady state. --107.10.xx.xx

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