Can You Pay Your Mortgage with Bitcoin?

There has been a lot of discussion surrounding Bitcoin recently, as many mainstream financial professionals are finally starting to pay attention to cryptocurrency. As a result, many people are jumping into the world of cryptocurrency for the first time. Even though there are many forms of cryptocurrency, one of the most popular is Bitcoin.

Therefore, you might be wondering, should you pay your mortgage in Bitcoin? There are several important points to keep in mind.

Mortgage lenders in the United States do not accept Bitcoin as a form of Payment

First, understand that mortgage lenders in the United States expect you to pay your mortgage in US dollars. As of now, mortgage lenders do not accept Bitcoin as a form of payment. This is the same reason why you cannot go to the grocery store and buy your groceries using Bitcoin.

The mortgage was originally written in US dollars. Therefore, mortgage lenders expect you to pay your mortgage in US dollars as well. Just as you cannot show up at the bank with a bunch of gold bars or shares of Apple stock to pay your mortgage, you cannot pay your mortgage using Bitcoin, either.

There are several reasons why US mortgage lenders only want US dollars. These include:

– There are expensive transaction fees with converting Bitcoin to US dollars
– Bitcoin is very volatile, so it is actually hard to track
– Unlike US dollars, Bitcoin cannot be used as a medium of exchange for most products and services
– It is difficult to track and report transactions made with Bitcoin, including mortgage payments
– All of the above opens the lender up to regulatory risk

For all of these reasons, you will not be able to pay your mortgage directly using Bitcoin; however, you might be able to convert Bitcoin into US dollars and then pay your mortgage. Is this the right thing for you to do?

What about converting Bitcoin into US dollars to pay your mortgage?

If you really want to use Bitcoin to pay your mortgage, the only way you will be able to do so is to convert Bitcoin back into US dollars before you send the dollars to your lender.

If you decide to do this, there are a few important points to keep in mind. These include:

– Similar to selling shares of a specific stock, you might incur either capital gains or income taxes on the proceeds of the sale.

– It is difficult to predict what Bitcoin is going to do in the future, so you could lose money if you sell Bitcoin and the price goes up.

– You might incur expensive transaction fees if you decide to sell Bitcoin and convert it into US dollars.

Of course, the biggest benefit of selling Bitcoin to pay your mortgage is that you might not have to spend the dollars that are already in your bank account. You need to think about the actual cost of converting Bitcoin back into dollars and weigh this against using the money you already have in your account to pay your mortgage.

Will lenders accept Bitcoin in the future?

Right now, the vast majority of mortgage lenders do not accept Bitcoin as a form of payment; however, if the technology improves, and there is enough incentive for lenders to do so, they may accept Bitcoin in the future.
For now, you need to weigh the benefits of holding Bitcoin versus the benefits of selling Bitcoin and using it to pay your mortgage. There is no right or wrong answer, but this is something that should be addressed on a case by case basis.