Is crypto wealth alone enough for a Crypto Mortgage?
By Colin McMahon
January 17, 2024 • 4 min read
When a first-time real estate investor with substantial cryptocurrency wealth heard about the innovative crypto mortgage from Milo, he naturally assumed it was his best option. However, a comprehensive consultation with the seasoned professionals at Milo revealed a range of financial avenues he hadn't considered. This story is a testament to the value of engaging experienced professionals who evaluate your entire portfolio to recommend the most suitable options.
The investor's journey began with an intent to tap into his crypto assets to purchase a $1.36 million single-family investment property in Houston, Texas. His intrigue in Milo's crypto mortgage, fueled by his digital wealth, led him to explore it as a key to real estate investment. What unfolded, however, was an enlightening exploration of his financial landscape that went beyond just his crypto holdings.
Cash or Crypto?
Upon examining the client's financial situation, the Milo team discovered he was not only rich in crypto assets but also prepared to make a substantial 30% down payment using his liquid assets. This down payment capacity changed the strategic landscape. The crypto mortgage, while innovative, is particularly advantageous for clients who either lack liquid assets or prefer not to tie them up in a down payment.
In this client's case, choosing a crypto mortgage meant unnecessarily encumbering his crypto wealth as collateral while simultaneously investing a significant portion of his liquid assets. Recognizing this, the Milo team guided the conversation towards more fitting loan options that would allow the client to retain both his liquidity and the flexibility of his crypto assets, aligning better with his broader financial objectives.
Introducing the client to the concept of a Debt Service Coverage Ratio (DSCR) loan was a game-changer. Unlike a traditional Debt-to-Income (DTI) loan, the DSCR loan focuses on the investment property's cash flow, an ideal fit for his scenario. This option not only allowed him to preserve his liquid assets but also kept his crypto wealth free for other investment opportunities.
The final decision - a 70% Loan-to-Value (LTV) DSCR loan with a one-year pre-payment plan - reflected both the client's financial strength and his optimistic outlook on future interest rates. It was a strategic choice that showcased the importance of a holistic view of one's financial capabilities and goals.
This customer’s story underscores the critical role of expert financial guidance in navigating the complex world of real estate investment. For this investor, Milo's expertise didn't just open the door to a new property; it expanded his understanding of how to strategically utilize his diverse assets. In the evolving landscape of investment, where digital and traditional assets intersect, making informed decisions is key to unlocking the full potential of one's financial portfolio.
For a comprehensive evaluation of your investment options and to discover how your unique financial profile can shape your real estate journey, schedule an appointment with our the team today.
The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.
Loan Consultant Sales Team Lead
Stay up to date on mortgage trends
Sign up to our newsletter for the latest insights on the housing market in the U.S.
How to refinance your U.S property as a Canadian investor
March 1, 2024 • 8 min read
How to apply for a U.S mortgage as a Canadian investor
February 23, 2024 • 10 min read
How to apply for a U.S mortgage as an Indian investor
February 22, 2024 • 10 min read