Like you, I was too young to experience first-hand the high rates of the early ’80′s. However, although I thought ET was cool, I was more of a Indiana Jones and Return of the Jedi fan.

A couple of older battle-proven loan officers were discussing the current market with me this week and they also anticipate a high level of inflation with a significant increase in interest rates within the next few years. In fact, one of them is currently in the process of refinancing his conventional loan to a VA loan simply to take advantage of the fact that it will be assumable. He noted that in the early 80′s, houses that were listed for sale that had assumable mortgages sold significantly faster than those that did not. I think that people need to be made aware of the assumption feature of FHA and VA loans and advised as to how it could mitigate the potential market risk related to high interest rates.

I know that I personally would rather assume a loan at 5.5% than try to obtain a new one at 10%.

Steve

Let’s just hope it is nothing too crazy.