At one time, cryptocurrency was a topic of discussion for the most internet-savvy people among us. And then crypto seemed like it was just for billionaires — not to mention, fodder for memes. But what once seemed like an ambiguous, fringe form of currency has now become much more mainstream and accessible.
In fact, many of us are wondering if crypto, primarily a means of investment in the recent past, will become as easy-to-use as credit and cash at businesses the world over. One mortgage company has offered a definitive answer. As of the third fiscal quarter of 2021, United Wholesale Mortgage allows homeowners to make mortgage payments with cryptocurrency. So, if you’re hoping to buy a home in the future — or make an equally big purchase — is cryptocurrency worth investing in?
Mortgage Lender Accepts Bitcoin for Payment
Perhaps surprisingly, 2021 will likely go down in history as a year of firsts for United Wholesale Mortgage. The large mortgage lender was involved in a corporate merger. Then, the company went public on the stock market. And, now, the company is making history as the first mortgage lender to accept cryptocurrency as payment. Although there are a variety of cryptocurrencies out there, the company will only accept Bitcoin — for now. United Wholesale has plans to expand that list to other forms of popular cryptocurrency, like Ethereum.
The mortgage lender has painted the decision to accept Bitcoin as a way of adding another layer of convenience for homeowners. More people are using Bitcoin these days, which means some folks who don’t have the cash or credit on hand to take out a mortgage on a house might be more comfortable using their crypto investments to do so.
As groundbreaking as this may sound, this transaction is rather similar to the way banks accept ACH transfers and automatic bank transfers when, in the past, banks might’ve only accepted money orders and checks. Not to mention, we’ve already seen changes in how companies do business; large companies and small businesses alike are starting to accept Apple Pay and other digital wallet-based payments in addition to cash, debit and credit payments.
How to Pay Your Mortgage with Bitcoin
So far, United Wholesale Mortgage hasn’t announced its official process for Bitcoin payments. As you may know, the same venues that allow you to buy and sell Bitcoin often let you trade Bitcoin with other users. As the second-largest mortgage lender in America, United Wholesale Mortgage might set up its own app, allowing you to transfer Bitcoin to them directly. On the other hand, the mortgage lender might form a partnership with an existing company that allows you to buy, sell, trade and store Bitcoin, such as Coinbase and Robinhood.
Another common concern? How will the company pay for something denoted in U.S. dollars (USD) in a different currency. Much like the value of a particular share of stock, Bitcoin does not have a stationary value. Rather, the Bitcoin-to-USD exchange rate fluctuates with the market. That means that two Bitcoin could cover an $800 mortgage this month, while 20 Bitcoin might cover the same mortgage a few months down the line.
Additionally, exchanging Bitcoin for dollars often comes with a surcharge. Many of the apps that allow you to buy Bitcoin are free services that only charge a percentage of sales and exchanges. If there’s a hefty charge for transferring Bitcoin from one account to another, will United Wholesale Mortgage be responsible for the fees — or will that cost fall to you? As of now, it remains to be seen.
Implications of Mortgage Lenders Accepting Bitcoin
While United Wholesale Mortgage’s Bitcoin plans are still in their infancy stages, the fact that the mortgage lender is moving forward with this policy has huge implications for both the company’s industry and the future of cryptocurrency. For folks who haven’t invested in crypto, a common complaint is that it’s difficult to use these virtual currencies in daily life. Clearly, United Wholesale Mortgage — a lender that’s second only to Rocket Mortgage in size — is helping to make cryptocurrency not only more mainstream, but the company is also showing skeptics the tangible, real-world benefits of these new currencies.
Although Bitcoin is not a get-rich-quick scheme, there have been instances of people making a small (or not-so-small) fortune from investing in Bitcoin. People who are rich in Bitcoin will likely be more attracted to the prospect of paying with cryptocurrency than the casual Bitcoin owner. This move could result in some very wealthy people, who potentially own a variety of properties, refinancing with United Wholesale Mortgage for nothing other than the convenience of paying mortgages with the currency they own the most of.
Regulations About Lenders Accepting Bitcoin
As more people begin to adopt cryptocurrency, there’s a legislative push to bring about stricter regulations for companies that offer cryptocurrency exchanges. As it stands, cryptocurrency exchanges must abide by the Bank Secrecy Act (BSA); the U.S. Securities and Exchange Commission (SEC) defines cryptocurrency as a security, so these exchanges must follow all of the same rules as stock exchanges.
For example, due to Know Your Customer standards, you must complete an application supplying your legal name and identifying tax information before purchasing cryptocurrency through an exchange. Exchanges also report gains and losses, so anyone who hits it big with cryptocurrency will also be sharing a portion of their earnings with Uncle Sam.
Yet, cryptocurrency has yet to be adopted as widely as credit cards, for example. For starters, cryptocurrency accounts are not offered by every bank or business, but, as the fanfare around United Wholesale Mortgage’s decision shows, there’s certainly room for growth and a wider adoption of crypto.
The mortgage industry is already a highly regulated sector of finance that’s carefully governed by a variety of federal regulations. United Wholesale Mortgage’s push to adopt Bitcoin as a method of payment could force industry regulators to hasten their efforts to answer legal and logistical questions surrounding the wider use of Bitcoin and other cryptocurrencies.
In turn, greater regulations could make companies feel more confident about making Bitcoin and other virtual currency a regular part of how they conduct business. Putting a company that embraces cryptocurrency at the center of any investigations or studies can do much to foster a kinder regulatory environment for Bitcoin and all other forms of cryptocurrency. That said, this small step for one company may mark a huge leap in the way Americans spend money.