World's First Crypto Mortgage

Buy Real Estate by Mortgaging Your Bitcoin.

Bishal Kumar Chanda4 min read
World's First Crypto Mortgage

Bitcoin is a relatively new asset that has gained worldwide recognition, and real estate is the most established route of increasing wealth. Milo, a US-based financial tech company, is releasing the world's first crypto mortgage for buying real estate. Potential borrowers can pledge their Bitcoins in a 30-year low-interest US crypto mortgage and buy a property without any dollar downpayment.

The cryptocurrency market its peak year in 2021, as its valuation soared beyond $3 trillion for the first time. Crypto-backed loans use Bitcoin and other notable digital assets, such as NFTs, as collateral. The crypto-loan industry has started to take shape as blockchain technologies become mainstream. Milo's product can be a game-changer for many investors in this high crypto market. It is an excellent opportunity for consumers to diversify their investment by buying real estate while holding onto their Bitcoins.

Most existing financial institutions such as banks and other lenders don't consider cryptocurrencies as an assurance of wealth. The bias against cryptocurrencies makes it very difficult for crypto holders to qualify for a mortgage. Crypto holders need to find other ways of buying real estate. There are two significant concerns in selling cryptocurrency to purchase real estate. One is realizing gains and facing tax consequences, and another is the opportunity cost. It is a different world for crypto holders than for someone with fiat money.

A potential Milo borrower would need to pledge Bitcoins at least worth the property's purchase price. A third-party custodian would be responsible for handling all aspects of the transaction, including going through various data points and conducting due diligence. Milo aims at expanding its product to other cryptocurrencies as well. The borrower will have the option to pay the monthly amount in either fiat currency or cryptocurrency. Milo's transactions are structured to reduce the impact of crypto's price volatility. If Bitcoin's price goes down, borrowers will have the option to pledge more Bitcoin to balance the amount.

Crypto-based loans grew exponentially last year with billions of dollars in existing loans. Milo is targeting a multi-billion dollar industry of crypto loans that has many untapped potentials. There is already an extensive waitlist for Milo's crypto mortgaging, which shows a promising market for other lenders to join.

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