How to buy a house with cryptocurrency

How to buy a house with cryptocurrency

Cryptocurrency is proving to be less of a trend and more of a force that’s here to stay. Bitcoin (BTC) reached an all-time high of over $68,000 in November 2021 after starting the year at just under $30,000, and the crypto industry  as a whole grew to a total market cap of more than $2 trillion. 

It makes sense that cryptocurrency investors are thinking big when it comes to tapping into the power of their crypto stashes. 

Can you use cryptocurrency to buy a house?

If you’re considering using Bitcoin, Ethereum, Dogecoin, Litecoin or one of a number of other cryptocurrencies to purchase a home, you’re not alone. 

It’s becoming increasingly common, but there are some challenges to be aware of, and the volatility of the cryptocurrency market can make some transactions complicated. 

How do you buy a home with cryptocurrency?

There are a few options for using cryptocurrency to buy a home. 

Convert cryptocurrency to cash

One of the simplest ways to use your cryptocurrency nest egg to buy a home is to sell the cryptocurrency for fiat money (dollars) using a service like BitPay, then use that money to purchase a home. However, keep in mind that you’ll need to keep the fiat money in an account in your name for at least two months before it’s considered an asset that can be used to purchase a home, and a deposit that large may get flagged by the IRS. Any money you make from selling cryptocurrency may also be subject to capital gains tax, so check with your financial advisor or tax attorney.

Convert your crypto to U.S. currency

Before it can be used to buy a house, cryptocurrency must be converted to U.S. currency.

MKG Enterprises Corp Third=Party Originator is beta-testing to accept cryptocurrency stable coins for its borrowers as a down payment and closing costs, that would be converted to U.S. dollars and offer its borrowers the ability to create a digital wallet to convert their crypto to fiat however much borrowers intend to use and have the money in their bank account prior to closing.

Seasoning 

Your lender’s underwriting team will need to verify that the crypto assets were in your digital wallet or digital exchange account for at least 60 days prior to when you sold them

What are the cons to buying a home with cryptocurrency?

As enticing as cryptocurrency may be, it’s still something of an unknown entity in the real estate industry. When considering buying a home with cryptocurrency, watch out for these drawbacks:

Not all sellers accept cryptocurrency. While trust is growing in Bitcoin, Ethereum and  their competitors, few sellers are ready to go all-in and accept cryptocurrency as payment for a real estate transaction, so it may limit your home-buying options. 

Cryptocurrency exchanges may be subject to capital gains taxes. The IRS considers cryptocurrency a type of property, property that must be sold in order for you to realize its value in dollars. Be sure to consult a tax professional to find out how using cryptocurrency to buy a home may affect your tax liability. 

You may have fewer legal protections in a cryptocurrency transaction. For users of cryptocurrency, two of its main selling points are security and anonymity. But that means transactions are difficult to trace, so if anything goes wrong, you could face a sticky legal situation. Be sure to consult a legal professional to learn how to protect yourself.  

Most mortgage lenders may not accept cryptocurrency-derived dollars for a down payment. Again, because cryptocurrency is anonymous, when it’s sold and converted to cash, there’s no paper trail that lenders can use to trace a sudden windfall of money in your account, and they may be hesitant to approve your loan without documentation of funds. 

The value of cryptocurrency is constantly changing. Imagine offering four Bitcoin for a home, having the offer accepted, and then watching the value of Bitcoin double right before the contract is signed. Need we say more?

The bottom line

If you want to buy a home with cryptocurrency, do your homework and be prepared to face some hurdles. If you’re not sure you’re cut out to be a cryptocurrency pioneer, consider giving the real estate industry a few years to get more comfortable with digital currencies before dropping any cryptocurrency on a house.

USDC / MKGE token is now paired on Uniswap as a ERC-20 Stable Coin

Buy Crypto/ Token MKGE with Credit/Debit Card 

https://mkgtaxconsultants.com/buy-crypto/

USDC/MKGE Pool:

https://info.uniswap.org/#/pools/0x83e1c656f5949a54d2bbfd34ac104a2135fa1282

Token:

https://info.uniswap.org/#/tokens/0xa7a293966e2463b7af7f5c6f3b660423e3a9c16b

MKG Enterprises Corp Third-Party Originator 

NLMS ID 1370394

Book A Meeting: https://calendly.com/marshawngovan

https://mkgenterprisescorp.com

Risk Disclosures

Bitcoin, ERC-20 tokens and other cryptocurrencies are a very speculative investment and involves a high degree of risk. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment, and a potential total loss of their investment. Information provided by Metropolis Decentralized Exchange is not intended to be, nor should it be construed or used as investment, tax or legal advice, a recommendation, or an offer to sell, or a solicitation of an offer to buy, an interest in cryptocurrency.

• An investment in cryptocurrency is not suitable for all investors.

•  An investor could lose all or a substantial portion of his/her investment in cryptocurrency.

•  An investment in cryptocurrency should be discretionary capital set aside strictly for speculative purposes.

•  An investment in cryptocurrency is not suitable or desirable for all investors.

•  Cryptocurrency has limited operating history or performance.

•  Fees and expenses associated with a cryptocurrency investment may be substantial.

The above summary is not a complete list of the risks and other important disclosures involved in investing in cryptocurrency. Any investment in cryptocurrency is subject to all the risks and disclosures set forth in the Customer Transaction Agreement and other definitive customer agreements.