Should I Pay for My Mortgage With Bitcoin?
Paying Your Mortgage With Bitcoin Is a Bad Idea. Here’s Why
Could you imagine paying your mortgage — one of life’s biggest expenses — with a bag of magic marbles that were sometimes worth $11,000 each and other times worth $60,000 each?
If you wanted to pay your mortgage with Bitcoin, that’s essentially what you’d be doing.
It’s been a big year for cryptocurrency, and consumers can buy more things than ever with crypto — though financial planners and other experts say they probably shouldn’t. Even mortgage lenders are starting to murmur about making cryptocurrency payments a thing.
United Wholesale Mortgage, the nation’s second-largest mortgage lender, announced — and quickly scrapped — a plan to accept crypto payments in August.
Customers said the option to pay their mortgage with crypto was “cool,” the company says, but they ultimately stuck to their original payment method of good, old-fashioned U.S. dollars.
Paying for things, and even mortgages, with cryptocurrency may be “cool,” but that doesn’t make it smart. Here’s what experts have to say about paying your mortgage with Bitcoin or other cryptocurrencies:
Should You Pay for Your Mortgage With Bitcoin?
No, to put it simply. Cryptocurrency is a notoriously volatile and speculative asset to hold. Personal finance experts say it should comprise no more than 5% of your overall portfolio and not get in the way of other financial priorities like saving for emergencies, paying down high-interest debt, or a conventional retirement strategy.
Paying for things — including mortgages — with cryptocurrency is a bad idea full of unnecessary risk, these experts say. For starters, the price you pay for something today might not be what your purchase or payment is worth tomorrow.
In other words, a $1,500 Bitcoin mortgage payment today could easily become a $3,000 mortgage payment tomorrow.
Also, most businesses that accept crypto start with the most popular cryptos like Bitcoin and Ethereum, which on account of their volatility are particularly ill-suited to use for payments and purchases, experts say.
While more innovation and stability in the future could change the dynamic, “we are not there yet,” we were told recently by Kiana Danial, author of “Cryptocurrency Investing for Dummies” and the personality behind @Investdiva on Instagram.
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