Using Bitcoin as down payment funds to purchase a new home with a mortgage...

[Silberman]

Maybe I’m missing something but I don’t see how this is different than any other hard asset begin sold first, converted into dollars, and then using those dollars to buy whatever you want, this seems like a standard transaction to me and I don’t see why anything other than the usual procedure will be needed in this case.

[1714951174]

1714951174

[Sadlife]

If bitcoin will be used as a direct payment of the mortgage loan then it is most likely impossible for banks to accept a volatile currency as down payment of funds and to buy anything you want this seems no different from a regular cash being paid in banks, i guess banks will only accept bitcoin as direct payment if it gets to valuable inthe future and matured from volatility which it will as institutional investors has decided to invest big amounts of cash in this digital currency but first segwit and the lightning network must be implemented first to make bitcoin mainstream. My only question is if bitcoin was already converted into fiat currency how is this different in paying in cash?

[keithers]

As an update for today...the loan has been conditionally approved and our appraisal has come in higher than purchase price. We are probably going to have to go with the path of least resistance and just use monies from the sale of bitcoin from back in March because then we can just use an April and May bank statement as the down payment funds without having to verify the bitcoin sales.

I did get the green light to be able to use bitcoin sales without any seasoning of the funds, but we would have to be able to clearly demonstrate that the coins have been sitting in the wallet for at least two months. So transferring bitcoin from cold storage into a hot wallet and then selling the coins wouldn't work at this point because the trail of money goes way over an underwriter's head at this point in time.

[keithers]

As a new update as of 6/28/2017 we are all cleared to fund and record the loan tomorrow making our client a new homeowner .

Final loan documents were signed at the end of last week

We have successfully used bitcoin as down payment funds.   They had to be converted to USD first (as bitcoin could not be sent directly to escrow).  Escrow companies are not in the business of holding bitcoin, nor will they convert currency...just as you could not send Yen or Yuan, or any other foreign currency as down payment funds to purchase a home in the United States.

But if you have purchased a home within the last few years, you understand the nightmare that comes along with verifying all of your down payment funds.

If anyone is looking for some guidance or can use some assistance getting pre-approved or ultimately approved to purchase a new home, please feel free to PM me.

[countryfree]

We have successfully used bitcoin as down payment funds.   They had to be converted to USD first (as bitcoin could not be sent directly to escrow).

I don't understand why you say you've been successful. It's a failure to me because those bitcoins had to be exchanged to fiat for the loan to be accepted.

[hardtime]

While I do think that it is wonderful that you're trying to get the community involved and all that, I really wouldn't be doing something like this unless you're somewhere working with some sort of expert to be able to find out if you're going to not be getting business due to not accepting Bitcoin. Because if you think about it in the terms of 'people are still going to need mortgages no matter what' you can come to think that you're going to be wasting time with all of this and not really helping anyone in the long run. Though if there are only people with Bitcoin that are going to be using mortgages and bitcoin then so be it.

[keithers]

While I do think that it is wonderful that you're trying to get the community involved and all that, I really wouldn't be doing something like this unless you're somewhere working with some sort of expert to be able to find out if you're going to not be getting business due to not accepting Bitcoin. Because if you think about it in the terms of 'people are still going to need mortgages no matter what' you can come to think that you're going to be wasting time with all of this and not really helping anyone in the long run. Though if there are only people with Bitcoin that are going to be using mortgages and bitcoin then so be it.

Thanks My business primarily comes from local realtors and all referrals. I have been in the industry for a long time so I have a book of business. This one off was more of an experiment to see if we could get investors to allow bitcoin into a sellable mortgage.

It works, so if I can help a few extra people then cool, if not...that's ok too

[KennyR]

I think this is quite complicated. Similar to the same incident earlier bitpay helped a person when the bitcoin price was around the value of about $1200. In that the advancing was done when the price was around $800 and the documentation took place when price was around $1200. This price difference gave the user a big profit margin that he own a Lambo after his documentation. Here I would wish to know what's the profit made through this long process.

[keithers]

We have successfully used bitcoin as down payment funds.   They had to be converted to USD first (as bitcoin could not be sent directly to escrow).

I don't understand why you say you've been successful. It's a failure to me because those bitcoins had to be exchanged to fiat for the loan to be accepted.

We are years away from escrow allowing bitcoin to be sent directly to them for an earnest money deposit or a down payment. Do you own a home, or have you gone through the loan process before to purchase a new home within the past few years in the United States?  If you have, then you would realize that selling bitcoins and then being able to use it right away for a down payment is a big success.

For BTC to be sent directly into escrow, escrow would have to be willing to wallet and hold the bitcoins and eat the volatility because funds are held in escrow for 30 days or sometimes longer.

[Kakmakr]

Ok, What if you can prove that the bitcoins you received, came from mining? It was not transferred from one address to another or through some doggy sites? Why do you have to make use of third parties like Coinbase? Do they do the dirty work to filter the money launderers from the legit users for you? You just need to read this forum and other platforms and you will receive several complaints from legit users, who lost their accounts at Coinbase for very silly reasons.

Why do you want to force people to make use of one payment processor or exchange? Did you cut a deal with them, if you use them? 

[rickbig092]

That would be a HUGE milestone and even though it won't make an impact on the price or the like, but would be a historical milestone for both bitcoin and the banking industry too, incorporating a digital-only currency into a mortgage payment system.

[keithers]

Ok, What if you can prove that the bitcoins you received, came from mining? It was not transferred from one address to another or through some doggy sites? Why do you have to make use of third parties like Coinbase? Do they do the dirty work to filter the money launderers from the legit users for you? You just need to read this forum and other platforms and you will receive several complaints from legit users, who lost their accounts at Coinbase for very silly reasons.

Why do you want to force people to make use of one payment processor or exchange? Did you cut a deal with them, if you use them?  

That would work too. At the point it becomes discretionary to the specific underwriting department who is underwriting the loan. Don't get me wrong but you are totally missing the point if you think I'm trying to pigeon hole people into coinbase. That is the complete opposite of what I'm trying to do.

Lending guidelines in the United States require all down payment funds to be seasoned for a minimum of 60 days. But if you could clearly document the original purchase of the bitcoins and then paper trail all the transfers and the sale at the end (I know this is against the ideology of a lot of bitcoin users), you should be able to use the funds from the proceeds of the sale of the bitcoins without seasoning the funds for 60 days.  I'm trying to show people an additional way to potentially use their BTC if they've been stockpiling them for awhile.

[keithers]

Our loan funded and title recorded the new deed on Thursday 6/29/2017.   Our client now has the keys to his new home and is in the process of putting doing some home improvements before moving in with his family.

Now I know people would think this would have been far more successful if Bitcoin was used and wired directly into escrow, but escrow companies are not yet set up to be able to store and/or sell crypto-currency. 

When buying in the United States, you can't wire in Euros, Pesos, Yen, or any other foreign currency....it all has to be converted to USD first, but this was definitely a major step in the right direction.

[skyline247]

Of course if the Bitcoins are first converted into fiat this is possible. Why wouldn't it be?

[Thatstinks]

This has got to be the stupidest thread I have seen in months. They sold their BTC for cash then used the cash to get the loan, period. BTC NOT incorporated into loan approval or used as down payment, you the OP offer NO service to this community the average broker who doesn't know what BTC would.

Your thread makes ZERO sense in what you are trying to say was accomplished, end of story you did nothing thousands of brokers not do everyday for everyone else.

Goodbye

[keithers]

This has got to be the stupidest thread I have seen in months. They sold their BTC for cash then used the cash to get the loan, period. BTC NOT incorporated into loan approval or used as down payment, you the OP offer NO service to this community the average broker who doesn't know what BTC would.

Your thread makes ZERO sense in what you are trying to say was accomplished, end of story you did nothing thousands of brokers not do everyday for everyone else.

Goodbye

Do you own a home? Have you gotten a home loan in the United States in the past two years? I'm assuming you haven't otherwise you would understand the process of verifying earnest money deposits for the initial deposits, and you would also understand the process of having to verify all transaction histories for the most recent two months of account statements for ANY account associated with the down payment OR the initial deposit.   If bitcoin was converted into cash within the last 60 days it would be disqualified from useable down payment funds.

You think I've done nothing, fine. Lol. You obviously have ZERO knowledge of the lending environment that we are in right now. If you don't believe me apply to buy a home, sell bitcoin and immediately  try to use it as a down payment right away and watch your offer fall right out of escrow

[Thatstinks]

This has got to be the stupidest thread I have seen in months. They sold their BTC for cash then used the cash to get the loan, period. BTC NOT incorporated into loan approval or used as down payment, you the OP offer NO service to this community the average broker who doesn't know what BTC would.

Your thread makes ZERO sense in what you are trying to say was accomplished, end of story you did nothing thousands of brokers not do everyday for everyone else.

Goodbye

Do you own a home? Have you gotten a home loan in the United States in the past two years? I'm assuming you haven't otherwise you would understand the process of verifying earnest money deposits for the initial deposits, and you would also understand the process of having to verify all transaction histories for the most recent two months of account statements for ANY account associated with the down payment OR the initial deposit.   If bitcoin was converted into cash within the last 60 days it would be disqualified from useable down payment funds.

You think I've done nothing, fine. Lol. You obviously have ZERO knowledge of the lending environment that we are in right now. If you don't believe me apply to buy a home, sell bitcoin and immediately  try to use it as a down payment right away and watch your offer fall right out of escrow

So they only got the loan because they owned bitcoin and not cash LOL

Youre clearly misguided or naïve, no point in arguing with a fool.

[tlcantin]

I'm actually in a very similar situation. I have a assets of bitcoin spread across many wallets and I want to use bitcoin (even converted to cash) as a down payment on a house purchase.... this is proving to be quite difficult to the underwriters. They want proof that I actually own the assets. Converting it to USD beforehand doesn't work because they want to know where the money came from which brings me right back to where I am now. They want actual statements but I can't get statements to my knowledge. If I move the coins to say coinbase, it's still going to show that I just moved the coins there.

I've given them trade, purchase, and sell history from the exchanges; but that is not enough according to them; as nothing is actually tied to my personal information (email/name is not enough according to the underwriter).

I suggested that I'd give them all the addresses I'd be using with signed messages that they could verify... but the underwriter is having a hard time understanding how this whole concept works. They're proposing that family members simply gift me the money and I pay them back after closing; but no one in my family has this kind of capital.

I'm probably going to sell the bitcoin into USD and wait for 2 months for the cash to be seasoned. If you guys have suggestions on how I can prove to the underwriters that I actually own the bitcoin, it'd be appreciated.

[Bitlend]

There needs to be a service wherbey you transfer those BTC over to the new service (call it ABCbitloans) and they lend you (in US dollars) x % against the underlying asset (bitcoin).

They hold your BTC, you use the cash (which they provide you with receipt/statement), and those funds can be transferred to wherever you like.

Bitloans then just either sells the BTC to recover loan less difference, or holds if they so wish.

[MasterJek]

Coinbase should be able to produce proof/account records for this matter, I could be wrong but we would have at CEX, provided the requestor identified themself enough. The purchases should be tied to fiat account action, or if the coins are old and from off exchange,  coin age (balance info) on the account should demonstrate previous ownership.