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What happens to mortgages during hyperinflation?
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[quote:Monty Python:MV8zOTExOTA1XzcwNTUyNTk3X0FGNzc2NTc3] 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. [/quote]
Original Message
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.
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