Yeah I remember when I was a kid, real estate listings often touted VA/FHA assumable loans and so forth. I got the impression it was a big selling point, especially in the early ’80s when rates were in the high teens.

I did some quick calcs last night … on a 30-year fixed, if rates go up 100 basis points, monthly payments will go up about 10%. Combine that with the lower cost and relative ease of assuming the loan and you’d have a real selling point.

I see it as a short-term hedge against declining market conditions … if for some reason you had to sell in the first 5-6 years, I’d guess you could get out unscathed even in the face of a 10% decline.