Mortgage

First US ‘Crypto Mortgage’ Is Being Offered by Fintech Company Milo

First US 'Crypto Mortgage' Is Being Offered by Fintech Company Milo
Written by Publishing Team

  • A fintech company called Milo offers what is billed as the world’s first crypto mortgage.
  • It says that the 30-year low-interest US cryptocurrency mortgage allows eligible borrowers to hold their bitcoins and purchase real estate.
  • The loans were granted in the early access phase, and the product is expected to be available to most applicants early this year.
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A fintech company is introducing what it calls the world’s first crypto mortgage in which borrowers take out bitcoin-backed loans to purchase real estate — combining a relatively new asset with one of the most established avenues for building wealth in America.

The company, Milo, said that the 30-year low-interest US mortgage will allow potential borrowers to pledge their bitcoins to purchase real estate and qualify to finance 100% of the purchase without having to make a dollar down payment. The loans were granted in the early access phase, and the product is scheduled to be available to most applicants in early 2022.

“I think this product is really a game-changer for many, many people. It achieves a lot of aspects of what this consumer wants, which is to continue to hold their bitcoin and be able to diversify and buy real estate — another Josep Rubina, CEO of Milo, told Insider Interview: “A great asset to create wealth.”

The crypto loan industry is already taking shape, with the cryptocurrency market celebrating a special year in 2021 when it briefly soared past a $3 trillion valuation for the first time. Crypto-backed loans are secured loans that use bitcoin and other digital assets as collateral.

Milo said his mortgage already has a “significant” waiting list, highlighting the appetite of crypto investors to expand wealth-building activities into housing as well as their reluctance to give away their bitcoins to fund such purchases.

Photo by Josep Rubina, founder and CEO of financial technology company Milo.

Josep Rubina is the founder and CEO of financial technology company Milo

milo


It can be ‘too hard for me [crypto holders] To qualify for a mortgage because the current framework with banks and other lenders do not consider that crypto wealth. What that means, Robina said, is that they have to look for alternative ways to buy property. “Once a bitcoin or cryptocurrency is sold, it creates the unintended consequences of the necessity to realize the gains and the tax consequences.”

“At the same time, the biggest concern for them is the opportunity cost of having bitcoin and digital assets. We have seen it increase and appreciate, and it has appreciated,” he said. “It is different for someone who has cryptocurrency than for someone who lives in the traditional dollar world. They really don’t want to sell their crypto.”

If the purchase price of the property is $500,000, then Milo’s potential borrower will need to pledge, through a third-party trustee, at least $500,000. Robina said she would guarantee to the borrower, look at the various data points and conduct due diligence on property, ownership and all other aspects of the pending deal.

“This bitcoin will allow us to be comfortable with the consumer so that we can give them this loan. At the same time, they will continue to own the bitcoin through the course of the transaction,” said Rubina. Milo aims to expand the product to allow borrowers to pledge other cryptocurrencies.

Like other cryptocurrency loans, the Milo Mortgage has a margin call component.

“If encryption drops by a certain amount… they may succumb to that,” said Rubina. “But they have the opportunity to pledge more to mitigate these factors.” He said the transactions are regulated to minimize the impact of price


volatility

.

A licensed lender, Milo started in 2018 and is familiar with dealing with niche clients as he has been highly focused on clients who live outside the US. Rubina said that the idea of ​​US mortgages started because international customers who own digital assets were asking for such a product.

He said credit checks are part of the lending process to domestic borrowers in the United States. For international clients, [as] They don’t have credit, we’ve found alternative ways to subscribe without credit…so this is just another data point for us.”

He added that Milo’s other mortgage products for foreign nationals came in the form of multi-million dollar loans, with applicants from at least 63 countries.

Rubina estimated that the crypto mortgage market could be in the tens of billions of dollars.

“We know there are billions of dollars in loans outstanding and backed by cryptocurrency, by the number of buyers out there. So we think, at least, it’s a billion dollar opportunity, if not bigger, and could be even bigger given the scale of real estate as an asset class.”

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