Better Mortgage and Coinbase Launch Bitcoin Collateral Loans

Better Mortgage and Coinbase have officially launched a new Bitcoin mortgage product, allowing borrowers to use Bitcoin as collateral for home purchases. The product enables individuals to pledge Bitcoin at a 250% collateral rate to cover down payments. For instance, to secure a $100,000 down payment on a $500,000 home, a borrower would need to pledge $250,000 in Bitcoin.

Since its launch last week, the pre-application loan scale has reached $360 million, surpassing initial estimates of $260 million from users on the waiting list. Upon closing, borrowers will receive two loans: a conventional mortgage that meets Fannie Mae standards and a down payment loan secured by the pledged Bitcoin, which also includes a subordinate lien on the property.

Borrowers must be aware that their Bitcoin collateral will be locked until the conventional mortgage is fully repaid or refinanced, which could take between 15 to 30 years. Unlike traditional crypto loans, a decline in Bitcoin prices will not trigger a margin call or automatic liquidation; liquidation of the pledged assets will only occur 60 days after a borrower defaults. Coinbase serves as a custodian and technology provider for the product, which currently only accepts Bitcoin as collateral.

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Source: KLEA News