Your Dream Home is Real, Not Digital
November 10, 2022 • 3 min read
With the plethora of protocols designed to help investors grow the value of their crypto wallets, it’s an exciting — albeit a little scary — time to be a DeFi enthusiast. Properly timed exchanges can result in huge payouts, and it seems like every day a new opportunity emerges promising to be the next game changing coin. As tempting and occasionally lucrative as these crypto strategies may be, they all have one thing in common: investors are left holding little more than a digital receipt.
Although the institutional adoption of certain crypto assets seems all but inevitable, securing a loan against a digital wallet is still challenging. It becomes increasingly difficult when the investor is seeking enough proceeds to reinvest in a more tangible asset with a high barrier to entry, like real estate. Given how slowly traditional financial institutions have been recognizing intangible asset classes as collateral, the situation is going to get difficult when an investor wants to use his or her wallet’s weight to secure a loan for a big ticket item such as a home in the physical world.
Digital Currency as Collateral For Physical Real Estate
American billionaire and thought leader Mark Cuban recently released a statement admonishing the trend of flipping properties on platforms such as The Sandbox or Upland, where users can purchase “the deed” to a plot of digital land. As profitable as the prospect of owning the keys to an online mansion neighboring Snoop Dogg’s may seem to some, Cuban points to the lack of utility these assets offer after the sparkle of celebrity endorsement fades and demand wanes. Unlike many assets in today’s economy, the value of real estate is ultimately derived from its location in the physical world, Not the digital one.
This is where Milo’s innovative crypto-backed mortgages come into play. We allow crypto investors to maximize the value of their portfolio by using their crypto as collateral on their home loan. With Milo, there’s no need to panic sell your crypto into fiat currency just so you can use the cash as collateral for your mortgage. Milo gives crypto investors the rare opportunity to both HODL their coins and qualify for the home of their dreams.
The best part about this? After the terms are met and the loan is paid off, Milo investors retrieve the entirety of their collateral along with ownership of their new home.
Diversify Your Crypto Portfolio with an Investment Property
Anyone who’s invested in an NFT or another web3.0 project knows that each investment is coupled with the issuance of an in-house currency, coin, or token that defines the value for whatever’s been sold within the project’s economy. However, these assets are heavily subject to the whims of artificial scarcity, manipulated valuations, and a host of other vulnerabilities often unbeknownst to the community.
Though historically stable assets, such as real estate, can be subject to volatility, if a buyer goes upside-down on their home they still own a physical asset with intrinsic value. Conversely, portfolios consisting strictly of digital assets are extremely limited in their agility. If one wants to utilize their crypto, they’re reliant on the market turning around and making a full recovery before any action can be taken if they want to avoid taking a loss.
Though the real estate market has its ups and downs, it has historically trended upwards and is considered one of the safest investment opportunities available. This is especially evident in the United States, where the demand for residential real estate is higher than ever. Unfortunately, the heightened demand has caused prices to outpace what the average consumer can afford.
Crypto-Backed Loans Made Simple
For crypto-enthusiasts looking to put their Bitcoin, Ethereum or stablecoin to work, it’s now possible to secure a pre-approval letter for a crypto-backed mortgage in the United States in just five minutes (regardless of citizenship status).
Here’s how it works: Milo offers two different, easy-to-understand, mortgage products. The first requires a 1:1 ratio of collateral pledged in relation to the total loan amount. Meaning, $500,000 worth of Bitcoin will secure a $500,000 loan toward a home. These 1:1 ratio loans apply specifically to variable tokens like BTC, ETH, and certain stablecoins.
Alternatively, Milo’s second crypto-backed mortgage product offers applicants a groundbreaking 4:1 collateral ratio so long as the underlying collateral is paid in USDC. Meaning, if one pledges $500,000 worth of USDC in collateral, it will secure a home loan of $2,000,000. Once collected, crypto collateral is stored in a custodial account where it remains for the duration of the loan. Upon repayment of the loan, the crypto assets are returned to the investor.
It’s that simple. The days of needing to liquidate your crypto portfolio — especially during a bear market — in order to qualify for a home loan are over. Thanks to Milo, you can now use the crypto you want to HODL to help secure a loan for the home you want to buy.
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.
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