Crypto & Mortgage Glossary
Plain-English definitions of the terms you'll encounter when using crypto to buy or refinance a home in the U.S.
A
Adjustable-Rate Mortgage (ARM)
A mortgage with an initial fixed-rate period (3, 5, 7, or 10 years) that then adjusts periodically based on a market index.
Altcoin
Any cryptocurrency other than Bitcoin. Most altcoins are too volatile or illiquid to accept as collateral for institutional lending.
Amortization
The schedule of splitting mortgage payments between principal and interest over the loan term so the balance reaches zero at the end.
Appraisal
An independent professional estimate of a property's fair market value, ordered by the lender to confirm the loan amount is supported by the property.
APR (Annual Percentage Rate)
The all-in annual cost of a mortgage including interest, points, and certain fees. Use APR to compare loan offers apples-to-apples.
Asset Depletion Mortgage
A loan qualification method that converts liquid assets (savings, investments, crypto) into a hypothetical monthly income to satisfy debt-to-income rules.
B
Balloon Payment
A large lump-sum payment at the end of a loan term, after smaller periodic payments. Common in short-term financing and interest-only loans.
Bear Market
A prolonged period of falling prices, typically defined as a 20%+ decline from recent highs. Crypto bear markets often last 12-24 months.
Bitcoin (BTC)
The first and largest cryptocurrency by market cap. Often accepted as mortgage collateral because of its deep liquidity and price history.
Bitcoin Halving
A pre-programmed event roughly every 4 years that cuts Bitcoin mining rewards in half, reducing new supply and historically preceding price rallies.
Blockchain
A distributed ledger that records transactions across many computers, making them effectively tamper-proof. The technology underlying Bitcoin and Ethereum.
Bridge Loan
A short-term loan that finances a new property purchase before an existing property sells. Typically 6–12 months, higher rates, fast to close.
Bull Market
A sustained period of rising prices. Crypto bull markets often produce 5x-10x gains over 12-24 months but trigger major tax events on any sale.
C
Capital Gains Tax (Crypto)
U.S. federal tax on profit from selling or trading crypto. Short-term gains (held ≤1 year) taxed as ordinary income; long-term gains get lower rates.
Cap Rate
Capitalization rate — annual net operating income divided by property value. A $30K NOI on a $500K property = 6% cap rate. Used to compare investments.
Cash-on-Cash Return
Annual pre-tax cash flow divided by total cash invested in a property. Captures the true yield on a financed real estate deal.
Cash-Out Refinance
Refinancing for more than the current mortgage balance and taking the difference as cash. Commonly used to tap home equity for major expenses or investment.
Closing Costs
Fees paid at loan closing — typically 2–5% of the loan amount — covering origination, title, appraisal, taxes, and prepaid escrow.
Closing Disclosure
The five-page federal form that itemizes final loan terms, costs, and cash needed at closing. Lender must deliver it at least 3 business days before signing.
Cold Wallet
An offline crypto wallet — usually a hardware device — kept disconnected from the internet to eliminate remote hacking risk.
Collateral Top-Up
Adding more crypto to your pledged collateral to lower your LTV. Used to proactively avoid a margin call or to respond to one.
Conforming Loan
A conventional mortgage that meets Fannie Mae/Freddie Mac rules, including the annual loan-limit cap ($806,500 in 2025 for most U.S. counties).
Construction Loan
Short-term financing for building a new home or major renovation, typically with phased fund releases tied to construction milestones.
Conventional Loan
A mortgage not backed or insured by a government agency. Includes most loans sold to Fannie Mae and Freddie Mac. Usually needs a 620+ credit score.
Cost Basis
The original purchase price of a crypto asset, plus fees. Used to calculate capital gains or losses when you sell or spend it.
Credit Score (FICO)
A three-digit number (300-850) summarizing creditworthiness from your credit history. FICO is the dominant U.S. scoring model.
Crypto-Backed Loan
A loan secured by Bitcoin or Ethereum as collateral. You receive cash, your crypto stays in qualified custody, and you get it back when repaid.
Crypto-Backed Mortgage
A home loan secured by crypto (like Bitcoin or Ethereum) instead of a cash down payment, letting borrowers keep their crypto while buying a home.
Crypto Collateral
Digital assets — usually Bitcoin or Ethereum — pledged to a lender to secure a loan. The lender holds the crypto until the loan is repaid.
Crypto Mortgage
Common shorthand for a mortgage that uses cryptocurrency in qualification. At Milo, this includes both crypto-backed and self-custody mortgages.
Crypto Tax Lot
A specific batch of crypto acquired in a single transaction with its own cost basis and acquisition date. Each purchase creates a separate lot.
Custodian
A regulated third-party that holds digital assets on a client's behalf. Qualified custodians are insured, audited, and segregate client funds.
D
Debt-to-Income Ratio (DTI)
Monthly debt payments (mortgage, car, credit cards, student loans) divided by monthly gross income. Most lenders cap conventional DTI at 43–50%.
Decentralized Exchange (DEX)
A peer-to-peer marketplace where crypto trades are settled by smart contracts on a blockchain, without a central order book or custodian.
Deed of Trust
A legal document used in many U.S. states instead of a mortgage to secure a home loan. Holds property title with a trustee until the loan is repaid.
DeFi (Decentralized Finance)
Financial services (lending, trading, yield) provided by smart contracts on public blockchains, without a centralized intermediary.
Depreciation
A tax deduction letting real estate investors deduct a portion of a property's value each year — 27.5 years for residential rentals, straight-line.
Discount Points
An upfront fee paid at closing to lower the mortgage interest rate. One point = 1% of the loan amount and typically buys 0.125–0.25% off the rate.
Down Payment
The cash portion of the home price the buyer pays upfront, separate from the loan. A 20% down payment on a $500K home is $100K.
DSCR Loan
A mortgage for investment properties qualified on the property's rental income rather than the borrower's personal income. Common in non-QM lending.
E
Earnest Money Deposit
A good-faith deposit (usually 1–3% of purchase price) made when an offer is accepted, held in escrow and applied to closing costs or down payment.
Encumbrance
A legal claim or restriction on a property, like a mortgage, lien, or easement, that can affect ownership or transfer.
Escrow
A lender-held account for property taxes and homeowners insurance, funded monthly via your mortgage payment to pay those bills when due.
Ethereum (ETH)
The second-largest cryptocurrency and the leading smart contract platform. Widely accepted as mortgage collateral alongside Bitcoin.
F
Fannie Mae & Freddie Mac
Government-sponsored enterprises that buy mortgages from lenders, package them, and sell them as securities. They set the rules for conforming loans.
FHA Loan
A mortgage insured by the Federal Housing Administration. Allows down payments as low as 3.5% and accepts lower credit scores than conventional loans.
Fixed-Rate Mortgage
A mortgage where the interest rate stays the same for the entire loan term. Predictable monthly payments but typically higher than initial ARM rates.
Form 1099-DA
A U.S. IRS form that crypto brokers must issue starting with 2025 transactions, reporting customer crypto sales and basis to the IRS.
H
Hash Rate
The total computing power securing a proof-of-work blockchain like Bitcoin. Higher hash rate means greater network security against attacks.
HELOC (Home Equity Line of Credit)
A revolving credit line secured by your home equity, with a variable rate and a draw period of 5–10 years. Like a credit card backed by your house.
HODL
Crypto slang for holding through volatility instead of selling. Originated from a 2013 typo of "hold" on a Bitcoin forum during a price crash.
Home Equity
The portion of a home's value the owner actually owns — current market value minus what's owed on any mortgages or liens.
Home Inspection
A buyer-ordered evaluation of a property's physical condition before purchase. Separate from the lender's appraisal; uncovers defects and needed repairs.
Hot Wallet
A crypto wallet connected to the internet — mobile apps, browser extensions, or exchange accounts. Convenient but exposed to online threats.
I
Inflation Hedge
An asset that holds or grows in value when the dollar loses purchasing power. Bitcoin and real estate are both commonly held as inflation hedges.
Interest-Only Mortgage
A loan where monthly payments cover only interest for an initial period (typically 5–10 years), with no principal reduction until amortization begins.
Interest Rate
The annual percentage a lender charges for borrowing the principal, before fees. A 6.5% rate on a $500K loan means $32,500 in first-year interest.
Investment Property
Real estate owned to generate rental income or appreciation, not as a primary residence. Underwriting and rates differ from owner-occupied loans.
Investment Property Mortgage
A mortgage for a property the borrower won't occupy as a primary residence. Requires higher down payment (20%+) and carries higher rates.
IRS Form 8949
The IRS form used to report capital gains and losses from crypto sales, trades, and certain disposals. Required for U.S. tax filing.
L
Lien
A legal claim against a property that secures a debt. Mortgages, tax bills, and unpaid contractor work can all create liens.
Liquidation
Selling pledged crypto collateral to cover a loan when the borrower fails to meet a margin call or repay at maturity.
Liquidity
How easily an asset can be converted to cash without affecting its market price. Bitcoin is highly liquid; obscure altcoins often are not.
Loan Estimate
A standardized three-page form lenders must deliver within 3 days of a mortgage application, detailing the proposed loan terms and estimated costs.
Loan-to-Value (LTV) on Crypto
The ratio of loan amount to crypto collateral value. A $100K loan against $200K of Bitcoin is 50% LTV. Lower LTV means safer for both sides.
Loan-to-Value Ratio (LTV)
Loan amount divided by property value. A $400K loan on a $500K home = 80% LTV. Lower LTV = better rates and no PMI required.
M
Margin Call
A lender request to add collateral or pay down a loan when crypto prices fall and LTV crosses a set threshold. Ignoring one can trigger liquidation.
Market Cap
The total dollar value of a cryptocurrency's circulating supply, calculated as price × coins in circulation. Bitcoin and Ethereum lead by market cap.
Mining
The process of using computing power to validate blockchain transactions and earn new cryptocurrency. Bitcoin uses proof-of-work mining.
Mortgage Note
The legal IOU you sign at closing, promising to repay the loan. Separate from the mortgage or deed of trust, which secures the note with the property.
Multi-Signature Wallet
A crypto wallet requiring multiple private keys to authorize a transaction. Used by institutions and security-conscious individuals to prevent single-key theft.
N
NFT (Non-Fungible Token)
A unique digital asset recorded on a blockchain, representing ownership of art, collectibles, or other one-of-a-kind items. Not accepted as collateral.
Non-Bank Lender
A mortgage lender that's not a chartered bank — operates without taking deposits, funding loans through warehouse lines or investor capital.
Non-QM Loan
A mortgage that doesn't meet the CFPB's Qualified Mortgage rules — often used for self-employed, investor, or crypto borrowers.
Non-Recourse Loan
A loan secured by specific collateral where the lender's only remedy on default is to seize the collateral. The borrower's other assets are protected.
O
Open-Term Loan
A loan with no fixed maturity date — you can keep it open as long as collateral requirements are met. Common in DeFi and some CeFi crypto lending.
Oracle (Crypto)
A data feed that provides crypto prices to a smart contract or lender. Oracle accuracy determines when margin calls and liquidations trigger.
Origination
The process of creating a new mortgage loan: application, underwriting, document collection, and funding. Origination fees compensate the lender for this work.
Origination Fee
A lender fee for processing the loan, usually 0.5%–1% of the loan amount. Shown on the Loan Estimate as part of closing costs.
P
PITI
Acronym for the four components of a mortgage payment: Principal, Interest, Taxes, and Insurance. The total monthly housing cost lenders use to qualify you.
Portfolio Lender
A lender that keeps originated loans on its own balance sheet instead of selling them to Fannie/Freddie or the secondary market.
Pre-Approval vs Pre-Qualification
Pre-qualification is an informal estimate based on stated info. Pre-approval is a documented commitment after the lender verifies credit, income, and assets.
Principal
The amount of money borrowed on a mortgage, separate from interest. On a $500K loan, the principal starts at $500K and shrinks as you pay it down.
Private Key
The cryptographic secret that authorizes spending crypto from a wallet. Whoever holds the private key controls the funds — no exceptions.
Private Mortgage Insurance (PMI)
Insurance a lender requires when the down payment is under 20%, protecting the lender if you default. Typically 0.3–1.5% of the loan annually.
Proof of Reserves
Cryptographic evidence that a custodian or exchange holds enough crypto to cover all customer balances, published on-chain.
R
Rate-and-Term Refinance
Refinancing only to change the rate or term of the existing mortgage — no cash taken out. Common when rates drop or to shorten a loan.
Real Estate Investment Trust (REIT)
A publicly-traded company that owns income-producing real estate. REITs offer real estate exposure without direct ownership or financing.
Realized vs. Unrealized Gains
Unrealized gains exist only on paper; realized gains are locked in by selling or trading. Only realized gains trigger U.S. tax.
Recourse Loan
A loan where the lender can pursue the borrower's other assets if the collateral doesn't cover the debt. Most consumer loans (mortgages, autos) are recourse.
Rehypothecation
When a lender reuses posted collateral (like your crypto) for their own borrowing or trading. Avoid lenders that rehypothecate your assets.
Reserves
Liquid assets a borrower must show after closing, expressed in months of mortgage payments. Reserves prove the borrower can weather short-term setbacks.
S
Second Mortgage
A new loan secured by a home that already has a primary mortgage. Lender has second-lien priority behind the first mortgage in a default.
Section 1031 Exchange
A U.S. tax strategy letting investors defer capital gains tax when selling a real estate investment by reinvesting the proceeds into a like-kind property.
Securitization
The process of packaging loans into tradable securities sold to investors. Most U.S. mortgages are securitized through Fannie Mae, Freddie Mac, or Ginnie Mae.
Self-Custody
Holding your own crypto's private keys instead of trusting an exchange or custodian. Max security but full responsibility — lose the keys, lose the coins.
Self-Custody Mortgage
A home loan where your crypto stays in your own wallet and counts as financial reserves — not pledged as collateral. No margin calls, full key control.
Self-Directed IRA (SDIRA)
A retirement account that lets you hold alternative assets like real estate or crypto, with strict IRS rules about transactions and disqualified persons.
Seller Financing
An arrangement where the property seller acts as the lender, holding a note from the buyer instead of getting fully paid at closing.
Short-Term vs. Long-Term Gains
Crypto held ≤1 year and sold at a profit = short-term, taxed as ordinary income. Held >1 year = long-term, taxed at 0/15/20%.
Smart Contract
Self-executing code on a blockchain that automates agreements. In DeFi lending, smart contracts handle collateral and liquidations automatically.
Stablecoin
A cryptocurrency pegged to a stable reference asset — usually the U.S. dollar. Examples: USDC, USDT, DAI.
T
Title Insurance
Insurance that protects lender and buyer against defects in property title — liens, forgeries, unknown heirs — that surface after closing.
Title (Real Estate)
Legal ownership of a property, evidenced by recorded deeds. A clean title is required to close on a mortgage; insurance covers undiscovered issues.
Token
A digital asset issued on an existing blockchain like Ethereum. Differs from a native coin (Bitcoin, Ether) which has its own blockchain.
Treasury Yield
The interest rate paid on U.S. government debt. The 10-year Treasury yield is the most-watched benchmark for setting mortgage rates.
U
Underwriting
The lender's process of verifying a borrower's income, assets, credit, and the property's value to decide whether to approve a loan and at what terms.
USDC
A U.S.-dollar-pegged stablecoin issued by Circle, fully backed by cash and short-term U.S. Treasuries and regularly audited.
USDT (Tether)
The largest dollar-pegged stablecoin by market cap. Widely used for crypto trading but has faced regulatory and reserves transparency questions.
V
VA Loan
A mortgage guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans and active-duty service members. Offers 0% down, no PMI.
Variable Rate
An interest rate that changes over the life of a loan based on a benchmark index. Used in ARMs, HELOCs, and many crypto lending products.
Volatility
The degree of price fluctuation over time. Bitcoin and Ethereum are highly volatile — 20%+ weekly moves are not unusual.