Today, housing prices are climbing ever higher even though many homes are currently staying on the market for months on end. Inflation is out of control, the economy is tanking generally, and the appraisal of the media and financial shills seems to be “clap your hands if you believe.”

But let’s get real; even the ocean of money that the government is printing can’t keep this party going for much longer. Economic armageddon is on the horizon, and with it the inevitable collapse of the US dollar.

For homeowners, especially those still paying down a mortgage, this is a bleak forecast. But what really happens to your home if the US dollar crashes? Keep reading, and I’ll talk about the potential outcomes, most of them bad…

If the Dollar Goes Bust, Your Mortgage Obligations Remain

The first thing you need to know about what will happen to your home in the midst of a dollar crash is that your mortgags, whatever they are, will remain in force. If you still have payments, you’ll have to make them. Whatever the balance is, you still owe it.

It doesn’t matter if the economy is cratering and the country is imploding: your lender will have every intention of being paid back, and if not, they will take action to secure their interests.

It doesn’t matter what’s happened to you or anyone else. It doesn’t matter if you lost your job, and it doesn’t matter if the dollar is worth more as toilet paper or kindling than currency. Whatever you owe, you still owe.

1. Inflation Might Lead to an “On-Paper” Increase in Home Values

It’s worth mentioning that some folks believe a dollar collapse and other financial maladies are generally good news for homeowners. That’s because inflation often results in the prices of goods and commodities increasing, including home values.

Great news, right? At least, it is if you own your home. Rising home prices mean that your home is more valuable. You might indeed be able to sell for a profit.

But, in reality, the increased value of your home is only going to be reflected on paper and not in actual purchasing power when the deal is done…

The cost of your home will have gone up, but so will absolutely everything else in your life, from fuel to food, water, and electricity, and a whole lot more.

Inflation is a thief of sorts, robbing your dollars of purchasing power. That means you’ll need a whole lot more money to purchase the same things you did prior to the monetary collapse.

So, even though you sell your home for much more money, the gains you realize won’t translate into more purchasing power, most likely.

2. Significant Home Devaluation is Likely to Result

What’s most likely to happen, at least once the irrational market enthusiasm starts to fizzle out under the crushing weight of reality, is that the value of your home will plummet.

Your home will be worth a lot less, and if you plan on selling you’ll get a lot less for it. The market will become what is known as a buyer’s market, meaning those who have the cash and are willing to buy will have the most leverage in setting the terms of a deal.

If you plan on selling your home to relocate, upsize, downsize, or anything else, you’ll probably be at the mercy of buyers, what few remain. Most homeowners, private investors, and even many institutions will be struggling to remain solvent.

3. You Might End Up Owing More Than Your Home is Worth

One of the worst possible situations to find yourself in as a homeowner with a mortgage during a currency crisis is when you owe more on your home than it’s currently worth, or will be worth for the foreseeable future.

This is known as being underwater on your mortgage. Basically, you are continuing to pay money to the lender for an asset that is heavily devalued. This is not ideal for your future financial prospects, especially if you need or want to move in the future.

Ideally, your home value will go up over time, meaning it is truly an asset that can pay off in the future. But once the dollar bottoms out it is likely that you, and countless other homeowners, will suffer because of it.

And underwater or not, you’ll have to keep on making those mortgage payments, or else you could lose your home entirely.

4. If You Can’t Make Your Payments, the Bank Will Foreclose

If you can’t pay the bank what you agreed to pay monthly on your mortgage, they will take the house from you to secure the loan. This process is known as foreclosure.

Foreclosure is ugly, but unfortunately, it happens year in and year out in America, and foreclosure rates always skyrocket during times of turmoil, economic contraction, and of course, currency devaluation.

Back in 2008 and 2009, the huge real estate collapse saw record-shattering foreclosure rates, though in a darkly ironic twist, many of these were precipitated by the banks themselves engaging in predatory or ill-advised lending.

No matter what’s going on in the country and no matter what you personally are going through, you can miss one or, at most, three mortgage payments before your lender will move to foreclose on your home.

This isn’t a matter of them asking nicely for you to hand over the keys. In time, the sheriff will be sent to your home to escort you off the premises with or without what is left inside if you haven’t made arrangements to get it out and in storage yet.

It’s tragic, it’s ugly, but it always has and always will happen when you’re dealing with banks…

To them and those enforcing the law, the home where you raised your family and look to the future is just another line item on a spreadsheet. Just business.

I warn you now: you cannot, must not, count on any sort of mercy from your lending institution in regards to your mortgage, no matter who it is and no matter how close your relationship is with them or any of the managers in it.

Even in the most turbulent times throughout US history, banks have always moved to prop up the bottom line. Plan accordingly…

5. Understanding Every Line of Your Mortgage Agreement is Paramount

Part of improving your prepper financial IQ regarding your home is reading every single paragraph and line item in your mortgage contract.

Typically, when signing a mortgage it usually goes something like this…

You head into the office of a representative at your bank, they give you a brief synopsis of what a page or 10 says, then you sign, date and initial where indicated, along with your spouse if you have one.

Invariably, some critical details are left murky or otherwise unclear. For the financially illiterate, they might only be focused on whether or not they can afford the down payment and the average installment payment every month.

This is a great way to get absolutely slaughtered when the dollar bottoms out. Without reading the fine print entirely, you might be unaware of exactly what could happen with your monthly payment, your interest rate, and whether or not your bank can accelerate the loan.

6. “Gotchas” in Your Mortgage Agreement Might Make Payment Impossible

Adjustable rate mortgages might look attractive upfront because of small down payments and flashy advertising, but if the dollar drops your interest rate will skyrocket so the bank can recoup more assets.

Likewise, banks can, and have, accelerated or called due loans, and the agreed-upon “nominal” term be damned.

Said another way, if you’ve been paying off a $300,000 mortgage and have about $160,000 left to go in principal and interest, if the terms of your mortgage state that the lender can accelerate it you might be on the hook for the entire balance within a certain period of time, anywhere from 30 to 90 days typically.

Can’t come up with that 160,000 in that time frame? Guess what, you’re now in foreclosure. Does it sound ugly? Does it sound like a dirty trick? Again, it’s just banking and just business, but you would know about it if you had read the entirety of your mortgage contract yourself.

My advice? No matter how excited you are to get the keys to your home, take a copy of the mortgage agreement and read it on your own time thoroughly, dispassionately, and making notes of questions you have.

Then consult with your personal financial advisor or your attorney for guidance and clarification.

Bottom Line: Pay Off Your Mortgage as Quickly as You Can

The best thing you can do to prepare yourself for a dollar devaluation is simply not to be in debt, including on your own home. Get it paid down and paid off as quickly as possible. Hustling now might make a bad situation salvageable later.

If you currently have an adjustable-rate mortgage, talk to your lender about refinancing into a fixed rate and ensure the fine print won’t allow them to wriggle out of it if the economy should tank.

You can be absolutely sure that they will not be in a deal-making mood when they are losing money hand over fist should the dollar plummet.

The post Here’s What Could Happen to Your Home Should the U.S. Dollar Crash appeared first on Modern Survival Online.

By: Tim Makay
Title: Here’s What Could Happen to Your Home Should the U.S. Dollar Crash
Sourced From: modernsurvivalonline.com/us-dollar-crash-housing-effects/
Published Date: Fri, 10 Jan 2025 15:11:20 +0000

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