While many real estate developers embrace cryptocurrencies as a form of payment, some crypto consumers aren’t ready to sell their digital assets. So, how can homebuying crypto consumers get the best of both worlds? Crypto mortgages.
What are crypto mortgages, and how do they work?
Crypto mortgages are real estate loans where cryptocurrencies serve as collateral. Similar to traditional mortgages, lenders first look at a homebuyer’s – in this case – crypto holdings to assess how much they can borrow. However, unlike conventional mortgage applications, lenders aren’t obliged to look at credit history or paycheck stubs.
Once the lender tallies how much can be borrowed and calculates the interest rate, the homebuyer has to pledge a percentage of their crypto holdings as collateral for the loan. In most cases, it’s a one-to-one crypto amount to cash ratio. Loans can then be paid back monthly in crypto or fiat.
Where can I get a crypto mortgage?
Although increased demand for leveraging investments with digital assets, crypto mortgages are a new concept. But that isn’t stopping some places across the USA from going for it!
- Milo is a Florida-based startup and is the first company to offer crypto-backed mortgages in the USA. They offer mortgages for real estate investments and 30-year loans of up to $5 million with rates ranging from 3.95% to 5.95%. Milo accepts bitcoin, ether, and a variety of stablecoins as collateral.
- USDC.Homes offers crypto mortgages for real estate purchases across Texas. Lenders can accept bitcoin, ether, USDC, and other cryptocurrencies as collateral to borrow up to $5 million for a 5.5% to 7.5% APR.
- Figure is a lender based in North Carolina that opened a waiting list for crypto mortgage loans of up to $20 million. They plan to eventually use bitcoin and ether as collateral for 30-year fixed-rate mortgages with an annual rate of 6%.
