While some homebuyers are selling cryptocurrency investments in order to make a down payment on a home, a tech company wants to offer investors the best of both worlds.
On Tuesday, Milo announced the release of what it is terming "the world’s first crypto mortgage", enabling mortgage applicants to qualify for and finance purchase of homes in the United States by leveraging their Bitcoin portfolio.
Applicants would be able to use Bitcoin to qualify for a long-term mortgage by pledging, not selling, a certain amount of their Bitcoin wealth. The more Bitcoin the individual pledges, the lower their interest rate would be. Bitcoin can be used to finance up to 100% of the purchase price of the home.
Throughout the life of the mortgage, the borrower can make their monthly payments using Bitcoin, regular money, or a stablecoin cryptocurrency that is tied to the value of the U.S. dollar. However, the pledged Bitcoin will be stored by a third party, so it will not function as a liquid asset. If the value of the cryptocurrency takes a nosedive, the borrower would likely have to pledge more Bitcoin or "liquidate some of those assets" as a last resort, according to Milo founder Josip Rupena.
"The existing ways for crypto consumers to access home credit has left them with unintended tax liabilities of selling for a down payment or worse the opportunity cost of seeing their crypto increase in value," Rupena said in a statement. "There are countless stories of people buying property with bitcoin proceeds only to see it increase in value and be worth millions more. We have an opportunity to make sure that doesn’t happen anymore and their bitcoin wealth can now help them buy a property.”
A waitlist is currently open.
This article originally published at https://dc.urbanturf.com/articles/blog/the-new-crypto-mortgage/19153.
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