Godlike Productions - Discussion Forum
Users Online Now: 2,019 (Who's On?)Visitors Today: 252,600
Pageviews Today: 756,183Threads Today: 476Posts Today: 9,347
01:34 PM


Rate this Thread

Absolute BS Crap Reasonable Nice Amazing
 

What happens to mortgages during hyperinflation?

 
Sikhed
Offer Upgrade

User ID: 5898996
United States
10/01/2018 07:53 PM
Report Abusive Post
Report Copyright Violation
What happens to mortgages during hyperinflation?
With all the talk and rumors of a coming worldwide economic carsh lately, was wondering this:

Let's say you buy a house in calm economic times. You put half down, get a 30 year mortgage, and pay $1000/mo at 6%.

Then hyperinflation hits. A cup of coffee costs $1 million, like in Venezuela and Zimbabwe.

What happens to your mortgage? (assuming the banks are still standing) Do you pay it off with your pocket change? Or is there a catch?

(I recently read mortgage papers, 15 pages of it, and don't see any clause about money becoming worthless. But then again, I'm not a lawyer either)

Thanks in advance for your input.
:doom360:
Anonymous Coward
User ID: 76903646
United States
10/01/2018 07:55 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
With all the talk and rumors of a coming worldwide economic carsh lately, was wondering this:

Let's say you buy a house in calm economic times. You put half down, get a 30 year mortgage, and pay $1000/mo at 6%.

Then hyperinflation hits. A cup of coffee costs $1 million, like in Venezuela and Zimbabwe.

What happens to your mortgage? (assuming the banks are still standing) Do you pay it off with your pocket change? Or is there a catch?

(I recently read mortgage papers, 15 pages of it, and don't see any clause about money becoming worthless. But then again, I'm not a lawyer either)

Thanks in advance for your input.
 Quoting: Sikhed


As long as you chose a fixed rate (not variable) you pay your entire mortgage off with 3 loaves of bread.

:truestory:
Anonymous Coward
User ID: 76903646
United States
10/01/2018 07:56 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Variable and your fucked. Like in VZ where they jacked the inerest rate to 65%... Your 1k mortgage just became....
NervousAndJerky

User ID: 38869319
United States
10/01/2018 07:57 PM

Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
My post was a day late and a dollar short.

Last Edited by NervousAndJerky on 10/01/2018 07:59 PM
swamprat

User ID: 35582214
United States
10/01/2018 07:58 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
The house I could barely afford in my 20's became quite a bargain in my 30's.
A combination of inflation and better jobs and wages.
We aren't cut out to be socialists.We are the people who couldn't be constrained by Europe. We are the malcontents, idealists, speculators, dreamers, inventors, debtors and criminals who would not be chained. We don't play well with others, we are brash, outlandish and cunning. let us do what we do best; let us be Americans.
MeisterEder.

User ID: 76894382
Germany
10/01/2018 07:58 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Inflation is a way for the state to pay off its debt.

truestory
MeisterEder
Sikhed  (OP)

User ID: 5898996
United States
10/01/2018 08:01 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Thanks. Personally, I'm fixed at 6.93% With only 6 years left. (and no 2nd mortgage either)

Seems to good to be true. Makes a person kinda look forward to economic doom.
:doom360:
Evolution16

User ID: 76947662
Croatia
10/01/2018 08:01 PM

Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Your payment doesn't change, assuming fixed rate, and your home value goes through the roof.

You just pretty much have to stay in your home - unless they invent a portable mortgage. Your next house will cost 1 trillion and have an interest rate of 1658% per month. Probably ought to stay put until things calm down.
Government is best which governs least - Jefferson
N3m3s1s

User ID: 76991209
United States
10/01/2018 08:03 PM

Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
The mortgage is a contract until the term ends.

As for the comparison that your house would be about the same price as bread, just because bread cost $1000000 doesn’t mean you have the money to buy it. That’s the problem with hyperinflation.
Mental Case

User ID: 738448
United States
10/01/2018 08:08 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
You just never know.

The bank could recall the loan immediately.

If it's an official government devaluation of currency then they MIGHT also index all debt to the percentage of devaluation.

If market forces devalue the currency then you MIGHT be able to pay off your mortgage with pocket change.

Hyperinflation is a wild animal & very unpredictable.
If I am going to be damned...I am going to be damned for who I really am!
Outland

User ID: 76117066
United States
10/01/2018 08:14 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Ummm...if the value of your house appreciates due to hyperinflation it's not the mortgage note that you need to worry about...it's the property taxes that will skyrocket.
Movalong

User ID: 76355751
Slovakia
10/01/2018 08:18 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Variable and your fucked. Like in VZ where they jacked the inerest rate to 65%... Your 1k mortgage just became....
 Quoting: WyatteSmith


65% is Argentina. Emerging markets are actually submerging.
Russian hacker

User ID: 76861076
United States
10/01/2018 08:19 PM

Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Thanks. Personally, I'm fixed at 6.93% With only 6 years left. (and no 2nd mortgage either)

Seems to good to be true. Makes a person kinda look forward to economic doom.
 Quoting: Sikhed


Amazing how low the rates are now. 3.85 for 15 year. 6.9 seems super high but it must be old huh?
Movalong

User ID: 76355751
Slovakia
10/01/2018 08:22 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Inflation is a way for the state to pay off its debt.

truestory
 Quoting: MeisterEder.


No state plans to pay off its debt (except with confetti).
Blue Wave

User ID: 75396617
United States
10/01/2018 08:24 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Thanks. Personally, I'm fixed at 6.93% With only 6 years left. (and no 2nd mortgage either)

Seems to good to be true. Makes a person kinda look forward to economic doom.
 Quoting: Sikhed


Why didn't you refinance a few years ago? I refinanced to a 15 year mortgage at 2.62%. Even my 30 year prior to the refinance was 5.25%.

You've been paying way too much in interest.
Blue Wave is coming
BRIEF

User ID: 39607259
United States
10/01/2018 08:25 PM

Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
In the 80's with hyperinflation, my grandparents would take a mortgage on their house and put it into CD's paying 15%
I never forgive and I never forget

I am a licensed firearm holder. I will, under protection of law, use lethal force if attacked.

Briefcut4892
Sikhed  (OP)

User ID: 5898996
United States
10/01/2018 08:25 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Thanks. Personally, I'm fixed at 6.93% With only 6 years left. (and no 2nd mortgage either)

Seems to good to be true. Makes a person kinda look forward to economic doom.
 Quoting: Sikhed


Why didn't you refinance a few years ago? I refinanced to a 15 year mortgage at 2.62%. Even my 30 year prior to the refinance was 5.25%.

You've been paying way too much in interest.
 Quoting: Blue Wave

I have no credit score. Private loan.
:doom360:
MeisterEder.

User ID: 76894382
Germany
10/01/2018 08:26 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Inflation is a way for the state to pay off its debt.

truestory
 Quoting: MeisterEder.


No state plans to pay off its debt (except with confetti).
 Quoting: Movalong


Debt gets paid all the time.


[link to www.youtube.com (secure)]
MeisterEder
Blue Wave

User ID: 75396617
United States
10/01/2018 08:26 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Thanks. Personally, I'm fixed at 6.93% With only 6 years left. (and no 2nd mortgage either)

Seems to good to be true. Makes a person kinda look forward to economic doom.
 Quoting: Sikhed


Why didn't you refinance a few years ago? I refinanced to a 15 year mortgage at 2.62%. Even my 30 year prior to the refinance was 5.25%.

You've been paying way too much in interest.
 Quoting: Blue Wave

I have no credit score. Private loan.
 Quoting: Sikhed


No credit or bad credit?
Blue Wave is coming
Movalong

User ID: 76355751
Slovakia
10/01/2018 08:31 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
You just never know.

The bank could recall the loan immediately.

If it's an official government devaluation of currency then they MIGHT also index all debt to the percentage of devaluation.

If market forces devalue the currency then you MIGHT be able to pay off your mortgage with pocket change.

Hyperinflation is a wild animal & very unpredictable.
 Quoting: Mental Case


trump-HRYK
Mental Case

User ID: 738448
United States
10/01/2018 08:32 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Ummm...if the value of your house appreciates due to hyperinflation it's not the mortgage note that you need to worry about...it's the property taxes that will skyrocket.

-------

But you can't sell the house because nobody has the cash upfront & the banks stop lending in a hyperinflationary invironment.
If I am going to be damned...I am going to be damned for who I really am!
Sikhed  (OP)

User ID: 5898996
United States
10/01/2018 08:34 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
No credit or bad credit?
 Quoting: Blue Wave


No credit. Never played that game. And I'm almost 60.

Last Edited by Sikhed on 10/01/2018 08:35 PM
:doom360:
Monty Python

User ID: 76848690
United States
10/01/2018 08:39 PM

Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Inflation is good for borrowers, bad for savers, and fixed incomes.

Banks actually prefer moderate inflation since it encourages borrowing even though it costs them some money in the long term.
Monty Python's Flying Circus
Sikhed  (OP)

User ID: 5898996
United States
10/01/2018 08:45 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Ummm...if the value of your house appreciates due to hyperinflation it's not the mortgage note that you need to worry about...it's the property taxes that will skyrocket.
 Quoting: Mental Case

Guess that old saying is true: No escape from death & taxes.
:doom360:
Movalong

User ID: 76355751
Slovakia
10/01/2018 08:47 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
Inflation is a way for the state to pay off its debt.

truestory
 Quoting: MeisterEder.


No state plans to pay off its debt (except with confetti).
 Quoting: Movalong


Debt gets paid all the time.


[link to www.youtube.com (secure)]
 Quoting: MeisterEder.


This time is different because 1) the whole world uses currencies backed by farts of central bankers; 2) the whole world is saturated with debt.
Kodiak Island

User ID: 76842541
United States
10/01/2018 09:18 PM
Report Abusive Post
Report Copyright Violation
Re: What happens to mortgages during hyperinflation?
With all the talk and rumors of a coming worldwide economic carsh lately, was wondering this:

Let's say you buy a house in calm economic times. You put half down, get a 30 year mortgage, and pay $1000/mo at 6%.

Then hyperinflation hits. A cup of coffee costs $1 million, like in Venezuela and Zimbabwe.

What happens to your mortgage? (assuming the banks are still standing) Do you pay it off with your pocket change? Or is there a catch?

(I recently read mortgage papers, 15 pages of it, and don't see any clause about money becoming worthless. But then again, I'm not a lawyer either)

Thanks in advance for your input.
 Quoting: Sikhed


As long as you chose a fixed rate (not variable) you pay your entire mortgage off with 3 loaves of bread.

truestory
 Quoting: WyatteSmith


Not true. The banks will always be able to change rules and law because, well, they are banks and they have all the money. The reason I know this is because I read about it happening somewhere before and the banks did indeed change the rules so they didn't get screwed. The banks will never lose! So, no, I don't think you will just be able to pay it off in inflated dollars, at least not all of it. Perhaps at the beginning of hyperinflation you might, until the banks get around to changing their mortegage rules.
Kodiak





GLP