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The rise of cryptocurrencies in the financial world has opened the door to many investment methods. This includes using your cryptos to invest in real estate to multiply your earnings.
We have compiled a list of the best crypto lending platforms to help you start using your digital assets to invest in real estate.
Best Crypto Loans for Real Estate Summary
- Ledn: The Best Overall Real Estate Crypto Loan Platform
- Milo: The Most Beginner Friendly Crypto Loan Platform
- Helio Lending: The Real Estate Loan Platform with NFT Support
- Figure: The Platform with the Lowest Interest Rates on Real Estate Loans
Ledn: The Best Overall Real Estate Crypto Loan Platform
Ledn is a Canada-based crypto lending platform that allows you to use your Bitcoin assets as a mortgage to buy property.
Ledn provides three types of crypto loans:
- Bitcoin mortgage loans allow you to borrow up to 100% of the value of your BTC by using your BTC and real estate as joint collateral.
The loan term is two years at a 50% LTV ratio. The loan amount is paid as monthly interest payments. You can join the waiting list by signing up via this link.
- B2X loans double your Bitcoin holdings by issuing a dollar loan. The amount of Bitcoin purchased and the Bitcoin in your portfolio act as collateral for the B2X loan. The annual interest rate for a B2X loan is 7.9%, with a 2% administration fee.
- Bitcoin-backed dollar loans act as conventional crypto-secured loans that allow you to borrow funds in USD or USDC against a fixed amount of bitcoin used as collateral. The LTV ratio is 50%, and the interest rate is 9.90% APR for 12 months.
Ledn adheres to consumer protection standards established by Canadian federal legislation. For protection, they store the crypto assets of its users in the custody of BitGo, and they require video verification if your withdrawal request exceeds a certain limit.
When a loan is approved, Ledn puts the money into the borrower's account within 24 hours. The minimum loan amount is USD 150,000.
Pros:
- Easy to use crypto platform that can be accessed on mobile or desktop.
- Loan closing time is less than 30 days.
- No SSN is required.
Cons:
- 1-2% origination fee.
- B2X loans are unavailable in many parts of the world, including the U.S., Africa, and North Korea.
- Bitcoin Mortgage loans are only available in Canada and will be available in the U.S. in 2022.
Summary
Ledn is the best platform to choose if you want to finance your property because it has many ways to get Bitcoin loans and invest in property and real estate. It is a reliable and trustworthy platform because the way it gives Bitcoin loans to borrowers is clear.
Milo: The Most Beginner-Friendly Crypto Loan Platform
Milo is a crypto loan platform that makes it easy for people who are new to using crypto assets to pay for home loans. Milo has many quality-of-life features to make it easier for you to mortgage your cryptos.
Borrowing a U.S. home loan via Milo is very simple, as Milo does not require a credit history or SSN, and the application can be filled out within 10 minutes. You don’t have to be a citizen of the U.S. to access Milo’s features; all you need is a U.S. visa to begin funding your real estate.
Milo provides interest at a fixed rate of 6.950%, and the loan can be paid over 30 years.
Furthermore, Milo supports Bitcoin, Ethereum, USDC, and Gemini Dollar as collateral. If you don't pay your monthly installment by the due date, Milo gives you an extra 15 days to pay before it takes out the same amount in USD from your collateral.
Milo also follows the anti-money laundering (AML) and know-your-customer (KYC) rules, and all wallets are kept by Gemini and CoinBase.
Pros:
- No credit checks.
- No down payment is required.
- Supports international clients.
Cons:
- Comparatively higher interest rates.
- Origination fees are 2%.
- Pre-termination penalty
Summary
Milo offers loans backed by cryptocurrencies that allow international investors and borrowers to get money to invest in real estate. Milo makes it easy to get a loan, which makes it a great place for people who are new to crypto lending to start.
Helio Lending: The Real Estate Loan Platform with NFT Support
Helio Lending is a crypto loan company based in Australia. They offer loans that are best for real estate development.
The interest rates begin at 4%, and Helio Lending does not charge any fees on your loans. The LTV ranges from 40% to 70%, and the minimum amount you can loan is 50,000 USD. Helio Lending supports four cryptocurrencies as collateral: BTC, XRP, ETH, and LTC, and you can use other coins by emailing their support.
Helio Lending does not have margin calls. This means that if the value of your collateral falls, you won't be charged anything, and you aren't required to deposit more cryptos to maintain your loan’s LTV ratio.
Your assets are kept safe because your deposit is kept in a cold storage wallet. Helio Lending also offers the benefit of no margin calls. Your previous credit scores are irrelevant, as they do not conduct any credit checks.
You will need to apply for a loan via this link instead of using a mobile or web application.
What makes Helio Lending shine is that it supports NFT real estate loans. They are the first crypto lending platform in the world that lets users use NFTs as collateral. This is possible because they work with Propy. With real estate NFTs, you can borrow up to 70% of your NFT’s price and skip the mortgage process altogether.
Pros
- Support for NFTs as collateral.
- There will be no margin calls.
Cons: no credit check
- No mobile app.
- No early termination option.
Summary
Helio Lending is best for people who collect NFTs a lot and want to save up a lot of money to invest in real estate. Its security features and lack of credit checks make it a worthy choice for real estate loans.
Figure: The Secure Crypto Platform with the Lowest Interest Rates on Real Estate Loans
Figure offers cash loans on your cryptocurrency while offering some of the lowest APR rates on home loans at 3.24%.
Figure has a mobile app on Google Play; you can access the loans from the website itself if you are on a desktop. It offers three types of loans to suit all your real estate needs:
- Home Equity Line allows you to get a HELOC (Home Equity Line of Credit) up to 400,000 USD with a minimum interest rate of 3.24% APR. However, these low rates can only be accessed if you live in certain states of the U.S. and have a decent credit profile.
Furthermore, the interest rate includes a discount of 0.75%, and you need to pay higher origination fees to lower your interest rates. - Mortgage loans are provided by Figure in partnership with Homebridge, allowing you to purchase or refinance your loans.
- Crypto mortgage loans (coming soon) will allow you to borrow up to US $20M with a 30-year mortgage plan.
With a crypto mortgage loan, you can hold your crypto while investing in real estate. The interest rate on crypto mortgage loans varies between 5.99 to 6.018% APR, and Figure supports BTC and ETH as the collateral.
To borrow crypto-backed loans, you must have a credit score of at least 620. The HELOC LTV ratio depends on your credit score. The max ratio of 95% LTV is available only for borrowers with a credit score between 760 to 850.
Pros:
- It can be accessed on mobile or desktop.
- Highly secure.
- Low APR rates on HELOC starting at 3.24%
Cons:
- Crypto mortgage loans are only available for U.S. citizens residing in certain states.
- A minimum FICO score of 620 is required.
Summary
Figure offers low interest rates on Bitcoin loans and is perfect for crypto owners who want to get money from a safe and reliable platform. It offers different types of loans to suit your investment needs and is best for crypto investors with high FICO scores.
What are crypto mortgage platforms?
Crypto mortgage platforms allow crypto investors to leverage their crypto holdings to finance their real estate dreams.
When you use these platforms, you can keep your digital assets safe while you are paying back the loan. Thanks to their fast approval times, these loans are better for long-term cryptocurrency holders than traditional cash loans from banks.
How to Choose a Platform for Real Estate Loans
Choosing the ideal platform is very important as they offer different features and services. Some terms that you should be aware of before you choose a crypto mortgage platform are:
Loan-to-Value Ratio
The loan-to-value ratio, or LTV ratio, is a risk assessment metric that measures the loan’s value against the collateral value.
Most crypto mortgage platforms have margin call and liquidation call values for a loan, and you are told when your crypto-backed loans reach these levels.
Most of the time, a margin call happens when the value of your collateral goes down, which makes the LTV ratio go up. This happens when the crypto market experiences a downswing. During this time, you must increase the value of your collateral until the LTV goes back to what it was when you signed the loan.
When the LTV ratio goes over the margin call, the platform is forced to sell your collateral. This is called a "liquidation call." Considering the high volatility of the crypto market, you must keep a close eye on the LTV and make sure to update your collateral should it reach the margin call limit.
Collateral
Collateral is the asset you pledge as a security measure that guarantees you will pay back the loan to the platform. You must lock in a specific percentage of your digital assets as collateral, which acts as protection and could be sold by the platform if you fail to repay your loan on time or a liquidation call is made.
By increasing the collateral, you can bring the LTV rates down. Conversely, decreasing the amount of collateral on your loan increases the risk and, thus, causes your LTV rates to go up.
Fees
Generally, there are two fees levied on your loans: an origination fee and an early termination fee.
The origination fee refers to the amount paid to process the loan application. It is paid upfront at the time of borrowing the loan.
On the other hand, an early termination fee or a pre-penalty fee is levied on your loan if you close it before the end of the term.
Keep an eye out for other hidden fees when choosing the platform for your crypto-backed home loans.
Security
The crypto mortgage platform you choose should follow specific regulations, such as AML guidelines, which protect you from money laundering and theft.
Many platforms will also ask you for information to do a "Know Your Customer" (KYC) check and prove that you are who you say you are and can pay back the loan amount.
FAQs
What are the risks associated with crypto loans?
The biggest risk of crypto loans is that if the cryptocurrency market goes down, you could lose all of your collateral. In most cases, if the value of your collateral falls drastically, you will not have to pay the loan but will not get any of your cryptos back either.
What happens if I fail to pay back the loan?
If you fail to repay the loan, the platform will liquidate your collateral to clear your loan. If your collateral's price exceeds the market price, the additional assets will be sent to your portfolio.
However, some platforms may allow you to extend the loan terms or provide the option to pay back the loan amount over another term.
