Bitcoin mortgages are a thing now, but should they be?
Securities regulator Joseph Borg caused a firestorm of warnings when, earlier this week, he told CNBC that people were taking out mortgages to buy bitcoin.
“We’ve seen mortgages being taken out to buy bitcoin. Yes, sure,” Borg said to disbelieving anchors Monday. “People borrow money. People do credit cards, equity lines.”
CNBC’s hosts couldn’t believe it.
“No. No. No. No. No. Please do not do this,” CNBC correspondent Bertha Coombs tweeted.
But professionals in the lending and cryptocurrency industries aren’t so sure the warning is necessary. The homeowner who takes out a second mortgage for quick cash to finance his bitcoin purchase–the volatile digital currency has been on an impressive upswing lately, to $16,500 this week compared to around $800 in January 2017–is an urban myth to most lenders. And they don’t necessarily view a bitcoin-motivated mortgage as any worse than other reasons behind home refinancing.
“If somebody wants to take cash out of their home to do that, it’s the same to me as if you wanted to take money out of your home to pay college tuition or renovate your bathroom,” said Shane Force, a residential mortgage consultant with Atlantic Home Loans in New Jersey. “It doesn’t make a difference to us as long as you have equity in your home and the customer is qualified.”