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You might soon pay your mortgage with Bitcoin here's why you'd want to

U.S. mortgages have taken a step into the unknown, with an announcement from the nations second-largest home lender that it will soon allow borrowers to make their monthly payments in cryptocurrency.

"Were excited that hopefully, (by the end of September), we can actually execute on that before anyone in the country," United Wholesale Mortgage CEO Mat Ishbia said during an earnings call with Wall Street analysts last week.

Giving borrowers who've locked down historically low mortgage rates more flexibility to make their payments would have benefits for a lender. But are there any real advantages to paying your mortgage with Bitcoin, instead of using cash?

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UWM the No. 2 U.S. mortgage lender after Rocket Mortgage believes accepting Bitcoin will provide added convenience for its borrowers.

"We have nearly 1 million consumers who pay us a monthly mortgage payment," Ishbia says, "and if accepting Bitcoin or other types of crypto makes it easier for our clients, were going to find a way to do it."

Tech journalist Naomi Brockwell hailed UWMs decision during a recent interview with Coindesk. She said that while Bitcoin hasnt proven itself especially useful for making payments in the past, mortgages could be a different story.

"When youre dealing with large amounts for houses, this is precisely the kind of use case that I think Bitcoin is good for, in terms of payments," Brockwell said.

For borrowers with crypto reserves to tap into, making mortgage payments could be easier at the times Bitcoin values are surging. But when MoneyWise asked UWM for specifics on how the process will actually work for consumers, the company said its "too early to have details at this moment."

Borrowers will be looking for answers to several questions, including these:

Will UWM be accepting actual crypto, or will a consumer need to trade it for dollars first, using a cryptocurrency exchange?

Will Bitcoin sellers be on the hook for additional fees if using a third-party exchange is necessary?

What happens if a delay or crash at an exchange results in a late mortgage payment?

Who will determine the Bitcoin/U.S. dollar exchange rate? Many crypto exchanges post different rates.

"We will communicate the plan to consumers once we have everything in place," Ishbia says.

Story continues

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If youre a successful Bitcoin investor with a UWM mortgage, using some of your returns to make your mortgage payments could wind up being a handy alternative to paying with cash.

But it wont make your mortgage burden any lighter. There are other ways to do that.

If youre eligible, consider refinancing your mortgage. As the economy improves and inflation heats up, the rock-bottom borrowing costs homeowners have been enjoying for the last year could quickly become a thing of the past. A refi at todays rates could save you hundreds of dollars a month.

If long-standing, high-interest debts are soaking up whatever cash flow is left after you make your monthly mortgage payment, it might be time to consider taking out a lower-interest debt consolidation loan. Youll cut your interest costs, which will help you wipe out your debt sooner.

You also can reduce the cost of homeownership by shrinking your home insurance premiums. A little comparison shopping could lead to big savings whenever you have to buy or renew a policy.

Shopping around also can help you pay less for car insurance.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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You might soon pay your mortgage with Bitcoin here's why you'd want to - Yahoo Finance