Cryptocurrency has been all the rage, and it has taken the market by storm over the last year. While there is speculation surrounding it, roughly 60 million Americans own some form of crypto and an increasing number of major institutions are choosing to accept it. Entire countries have even declared it their national currency. Although it’s still relatively new and volatile, it seems as though the once precarious, unregulated currency may be here to stay.
That said, its growing popularity begs the question:
Can you use cryptocurrency to qualify for a mortgage?
First, it’s important to note that crypto-related funds are not an acceptable asset when it comes to qualifying for government-backed mortgages. However, individual lenders have their own policies regarding using the funds to qualify for conventional mortgages, so not all lenders accept it – but Treadstone does! So, yes, you can use cryptocurrency to qualify for a mortgage with Treadstone.
Can I pay for a down payment with cryptocurrency?
The same applies for using cryptocurrency toward your down payment; some lenders will accept it, but government mortgages are not yet permitting the use of crypto-related funds in any part of the mortgage process.
So, whether you want to use cryptocurrency to qualify for a mortgage or use it toward your down payment, here’s how to use crypto to get a mortgage with Treadstone.
How to Use Cryptocurrency to Qualify for a Mortgage with Treadstone
The first and most important step is to start working with a crypto-friendly mortgage lender and get preapproved before shopping for homes. Once you begin the mortgage pre-approval process, your loan officer will need to see your complete financial picture –income, savings, and non-cash assets, which includes cryptocurrency holdings. Asset documentation helps the lender determine how much they can lend to each borrower which then informs your home-buying budget. If you are considering using crypto-related funds toward your mortgage qualification, make sure to plan for this well in advance and let your loan officer know. This will ensure the amount your lender approves you for is accurate, and they can best advise your mortgage options which will provide for a smooth process.
After speaking with your loan officer to determine if using crypto funds is the best option for you, they will likely advise you to deposit the crypto funds into a standard US bank account. The currency must be converted to US dollars before obtaining your preapproval and beginning your home search. Crypto funds are treated like cash when used in any part of the mortgage process which basically means it doesn’t exist in the eyes of the lender until it is in a bank account with proper documentation.
The funds must be transferred a minimum of 60 days prior to closing, but the longer, the better. For self-employed borrowers, we recommend at least 90 days. This waiting period, also known as “seasoning,” is crucial with crypto and other investments, assets, and stocks. These assets must have a clear paper trail documenting where the funds came from and who owns them to be considered an eligible asset in your mortgage qualification.
*For more detailed information regarding proper documentation, contact a loan officer.
The Bottom Line
It is possible to use your cryptocurrency toward your conventional mortgage approval, but just not in its pure form. So, if you are planning on using crypto for your mortgage, the good news is it’s possible!
While cryptocurrency has been sited as a volatile investment, mortgages, on the other hand, are one of the most steady, stable ways of building wealth. A home may not make you a millionaire overnight, but Americans who own homes have, on average, 40 times the net worth of non-homeowners, and today’s low-rate environment makes mortgages more affordable than ever!
To discuss using cryptocurrency to qualify for a mortgage, contact one of our loan officers!
Not all lenders accept cryptocurrency to buy a home, but Treadstone does!