With Bitcoin value jumping more than 183 percent in November alone, there’s no doubt that cryptocurrency is booming. And even though the IRS has labeled it an asset, many lender today still remain unsure in using this new currency in a loan.
In this article we’re going to dive deeper into this new cryptocurrency bitcoin and what it means for you as a loan officer.
Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto.There are no middle men with transactions meaning, no banks! Bitcoin can be used to book hotels online, shop for furniture and buy games and other good online. But much of the hype is about getting rich by trading it. The price of bitcoin skyrocketed in 2017 which is why it’s on everyone’s minds.
If you are looking to acquire bitcoins, there are several marketplaces called ”bitcoin exchanges,” which allow people to buy or sell bitcoins using different currencies. You can send bitcoins to others using mobile apps or your computer. It’s similar to sending cash digitally.
Bitcoins are kept in a “digital wallet,” either in the cloud or on a user’s computer. Think of the wallet like a “virtual bank account” (which is not insured by the FDIC) that allows users to send or receive bitcoins, pay for goods or save their money.
Bond New York made headlines in 2013 when it became the first real estate firm to accept bitcoins for real estate fees.
It’s true that using bitcoin would save time on paperwork, since bitcoins are instantly transferred, saving time and money. This would help all that are involved in the home buying process: buyers, sellers, and brokers.
According to the experts at PricewaterhouseCoopers notes
Blockchain technology may radically alter the process through which consumers buy a home, as well as the way financial institutions handle mortgages. It could also dramatically change the way mortgages are serviced and sold on the secondary market, by…
1. Removing costs and friction from processes
2. Creating a tamper proof transaction history
3. Reducing delays in exchange and finalisation
What do you think?
Should Bitcoin be used in the mortgage process?