#Why Is Newrez Accepting Cryptocurrency for Mortgages?
Newrez has taken a significant step by deciding to accept certain cryptocurrency holdings as part of its mortgage qualification process starting in February. This initiative positions Newrez as the first among the top 25 major lenders in the country to formally embrace crypto assets in mortgage origination.
Eligible cryptocurrencies include Bitcoin, Ethereum, SEC-approved spot ETFs that are backed by Bitcoin or Ethereum, and USD-backed stablecoins. Borrowers will now be able to leverage these digital assets for both income and asset verification purposes, without having to liquidate them as is customary in traditional methods.
#What Motivated This Change?
The decision to accept crypto holdings stems from the increasing prevalence of cryptocurrencies among individuals and their growing acceptance by institutional players. The current landscape shows a marked rise in crypto investments, signaling to Newrez that the timing is ripe for such innovation in the mortgage sector. This shift allows consumers to maintain their investments in cryptocurrency while simultaneously accessing new financing avenues.
Newrez recognizes that the global crypto market has surpassed the $3 trillion mark, and an estimated 45% of younger generations, including Gen Z and Millennials, invest in crypto. These demographics represent potential future homebuyers who are accustomed to digital investing practices. Newrez aims to align its mortgage offerings with the financial behaviors of these emerging wealth holders, ensuring that the home buying process is flexible and accessible.
#What Conditions Apply for Crypto Holdings?
To qualify, cryptocurrency holdings must be maintained with US-regulated exchanges, brokerages, or banks, and a volatility-adjusted valuation will be employed to account for market fluctuations. It is essential to note that all mortgage payments and closing costs must still be conducted in USD, emphasizing the commitment to financial stability amid a rapidly changing market.
By integrating cryptocurrency into its mortgage offerings, Newrez is paving the way for innovative financing solutions that cater to a tech-savvy generation of homebuyers.