While the ensuing discussion ran the gamut, metaphorically and practically, I felt compelled to share with you the portion of it that pertained to mortgages and home finance. (That’s what you would expect from a mortgage columnist and loan officer, eh?)

We all knew it was coming, and now after a fifth consecutive week of increased mortgage interest rates, it looks like concerns about inflation may now be becoming a reality. The question: How can we take these perceived negative market forces and use them effectively to our advantage?

Most obviously, future inflation will make property values increase over time. Thus, it makes sense that controlling the title to a piece of real estate (a.k.a. owning it) with as little out-of-pocket money as possible will lead to the largest return-on-investment.

Next, with upward trending prices, it’s a good bet renters will face increases, too. This might be prime time to make the move from renting a property to owning one. Remember, the monthly payment on a fixed-rate mortgage will not change, but your rent most likely will.

FHA mortgages are a great hedge against future inflation because they are assumable. Home buyers (and those wishing to refinance) should consider an FHA loan if they plan on moving in the next several years. With higher future mortgage rates, your low-interest assumable loan may be a nice selling feature. Future qualified buyers can assume your FHA loan, and make payments to you for any balance to the purchase price that they might owe you.

Like an ancient Japanese warrior, you can use market momentum to your favor if you seek to understand the rules, learn from your Sensei, and take timely and appropriate action.

Timothy Phillips is a mortgage banker and newspaper columnist.  Homebuyers should always consult a professional for guidance specific to their situation.

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