Selling and purchasing aren’t the only time you’d feel it. Any time interest rates go up you’d also feel it (now you get to pay more on large amount). With very large principals you’d be paying it for longer. Anytime the mortgage goes up for renewal no bank would want to touch you, or maybe they’d love you, just with really unfavorable terms (idk much about banks).
Having a large mortgage when the asset tanks can be thought of having a big debt where the collateral for that debt is suddenly with way less.
But hurting when interest rates go up would happen wether your house is now $300k or $600k.
If you bought your house for $600k you should hopefully be prepared to pay that $600k over time, whether or not interest rates go up.
Yes the collateral is an issue, but if it tanks it’s not like the bank is getting their money back any faster by kicking people out and foreclosing. That would only be an issue if they can’t make the payments anymore.
Selling and purchasing aren’t the only time you’d feel it. Any time interest rates go up you’d also feel it (now you get to pay more on large amount). With very large principals you’d be paying it for longer. Anytime the mortgage goes up for renewal no bank would want to touch you, or maybe they’d love you, just with really unfavorable terms (idk much about banks).
Having a large mortgage when the asset tanks can be thought of having a big debt where the collateral for that debt is suddenly with way less.
But hurting when interest rates go up would happen wether your house is now $300k or $600k.
If you bought your house for $600k you should hopefully be prepared to pay that $600k over time, whether or not interest rates go up.
Yes the collateral is an issue, but if it tanks it’s not like the bank is getting their money back any faster by kicking people out and foreclosing. That would only be an issue if they can’t make the payments anymore.