If the current government-backed mortgage loan options were to disappear then it will become much more difficult, or impossible to buy and sell one’s home. Private money will definitely cost more than 3.5% amortized over 30 years.. That’s a fact and I’m not trying to be scary (despite my profile photo).
I believe the likelihood home values will decrease dramatically in real terms anytime soon are low at this time. Compare the value of your home to other assets. It is quite rational to question if the US FED will be able to keep interest rates this low forever? My advice to everyone who owns real estate (and does not plan to die in the home) is to pay down a good chunk of your equity. Pay down the mortgage and create a large ’buffer’ in case you need to re-finance (if rates go any lower I’d be happily surprised). Pay down the mortgage in case you need to sell the property someday, because the value of your equity may be much lower compared to today’s cost of living.
Perhaps ‘assumable’ mortgages are a real value right now? If interest rates go way up, certainly. I have represented many buyers who have purchased assumable loans since I was licensed at an early age back in 1994, but rates have mostly decreased in that timeframe so I have never heard from anyone who has successfully taken over an ‘assumable’ loan. Usually FHA or VA (both government backed), who’s to guarantee the loan would be transferred VS. your note being called due in these scenarios? After all its the government. Everything has risks.
If you have ever assumed (or gotten rid of) your mortgage loan thru ‘assumption’ then I would really like to hear about it, please reply.