How Crypto-Currency Impacts Mortgage Industry
Cryptocurrency is the new form of digital currency, which is gaining popularity in the last few years. It has created a new market for investors and borrowers. The mortgage industry has been impacted by this new kind of currency due to its impact on the economy and how it can be used as collateral.
Crypto-currency has become a popular form of investment for many people, which has led to an increase in demand for crypto-mortgages. Introducing Milo
Crypto-Currency and Mortgage Brokers
A Miami based mortgage company who is letting homebuyers to utilise cryptocurrencies they already own as collateral for home loans, with no down payment required.
We're excited to announce we are leading the $17 million Series A for @MiloCredit, which reimagines how global and #crypto consumers can buy U.S. #realestate. On behalf of @latifperacha and the M13 family, welcome to @JRupena and the whole Milo team! https://t.co/nfWIJJY3hQ
— M13 🚀 (@M13Company) March 9, 2022
Milo is willing to give up to $5 million in individual house loans at a time. Borrowers must pledge the entire value of the property in cryptocurrencies such as Bitcoin and Ethereum before transferring it to a custodian for safekeeping.
They then make regular monthly payments at rates similar to those offered for traditional mortgages, with the lender having access to the stored bitcoin if the borrower defaults.
It means that homeowners could benefit on two fronts by purchasing properties with rising values while also benefiting from any increase in the value of their cryptocurrencies.
However, there is a greater danger of utilising an already volatile asset to finance a purchase in the property market, which may slow down in the coming months as borrowing costs rise.
Milo pays the individual selling the property in dollars, and the homeowner has the option of making monthly mortgage payments in either crypto or cash.
Milo has protections in place to ensure they don’t go bankrupt if the value of bitcoin plummets unexpectedly.
The borrower will be requested to provide more crypto or cash if the value of the crypto collateral falls below 65 percent of the loan amount.
If the currency’s value falls below 30%, Milo will promptly liquidate the Bitcoin or Ethereum and store the money in regular US dollars.
But for Milo the competition is there already as Revolut, a digital banking platform located in London, is working on expanding into decentralised cryptocurrency wallets and is also exploring into the mortgage sector, according to its CEO, as the business pursues its goal of becoming a “superapp.”
Revolut, which already offers payments, cryptocurrency trading, savings accounts, and stock trading, is focusing on extending its remittance capabilities and launching a purchase now, pay later solution in the near future. However, according to CEO Nik Storonsky, the financial technology business still has work to do in order to become a one-stop shop for financial services. According to him Home loans essential aspect of consumer financial life,” thus the company should think about expanding into mortgages.