Buying a house with a crypto-mortgage in the USA is a real option nowadays. Currently, there are just a few companies that offer crypto-mortgages in the US. It has tremendous benefits for crypto holders. On one side, they get to keep their crypto assets. On the other hand, they avoid having to pay tax for cashing out their crypto.
There are plenty of people who made serious money with crypto. If you locked up all or most of your wealth in crypto, a crypto-mortgage was not on the horizon. That is now changing. Let’s take a closer look at how this works.
How Does a Crypto-Mortgage Work in the US?
A crypto-mortgage works pretty much the same as a traditional mortgage. You need to make a down payment, and you will get a loan. However, this is where things are also a bit different.
For example, Milo, a Miami-based lender, asks for a 100% down payment. So, for a $1 million crypto-mortgage, you need to put down, well, $1 million in Bitcoin. Milo was the first firm to offer crypto-mortgages in the USA, back in January 2022.
A crypto-mortgage has more than just one advantage. They actually add nicely up. Let’s see what they are:
- Somebody who has all or most of his wealth locked up in crypto can now get a mortgage.
- You don’t have to cash out your crypto and pay tax over it.
- After you pay off the mortgage, your crypto down payment is yours again.
- Earn interest on your down payment.
- No need for a FICO credit check or show your creditworthiness with a tax return.
- You don’t need a US social security number.
- Another beauty of a crypto-mortgage in the USA is that non-residents can buy real estate.
Now, there is an upgrade in this service with USDC Homes.
USDC Homes, a Cheaper Way to get a Crypto-Mortgage
USDC Homes, a Texas-based company, only requires a 20% down payment. Furthermore, they also accept USDC, Ethereum, and a few more cryptos. That is, besides Bitcoin.
Source: USDC Homes
Moreover, here is a brief comparison between these two crypto-mortgage companies:
- With USDC Homes, you can borrow up to $5 million, over a 30-year period. It will have a 5-year arm (Adjustable rate).
- Rates start at 5.5% with USDC Homes. Milo has rates between 3.95% and 5.95%.
- In USDC Homes, if there’s a 65% collateral drop in value, you need to provide more collateral. If it’s 70% or higher, Milo will liquidate your crypto.
This seems all to be in line with traditional mortgages. Except for the liquidation. Furthermore, the person who is selling the house receives fiat. On the other hand, the buyer can keep paying off his mortgage in crypto. Here are other benefits of getting your crypto-mortgage in USDC Homes:
Source: USDC Homes
In the meantime, Milo has already paid out $340 million in mortgages. On top of that, they have 7,000 people on a waiting list.
Are There Any Risks in a Crypto-Mortgage?
As with everything, there are always risks when money is at stake. Let’s have a look at these risks.
- Crypto assets are volatile. This may lead to liquidation. You would not only lose your crypto but also your house.
- In case you want to sell your property, there’s an issue. Milo asks for a fiat payment to settle the loan before they return your Bitcoin.
- The collateral is 100% of the buying price of the property with Milo. However, USDC Homes only asks for a 20% down payment.
Conclusion
Being able to get a crypto-mortgage is a relief for many crypto millionaires. They may not have big amounts of cash available. This means that in a traditional mortgage market, they get stuck. However, we also showed that there are plenty of advantages. Taking out a crypto-mortgage is now at least an option that is on the table. It’s a brand-new market, so shop around in case you’re interested.
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