Crypto and Mortgages - Any Advice

MattPearce

Hi All! 

Frequent lurker here. 

I currently have a mortgage in process with Pepper Money. They’ve been fairly good so far about using profits from crypto investments for deposit etc. I’ve just had to show statements of holding etc and show 3 month transaction statements

 But, it had me wondering, what’s people / brokers experience been with this in the past? Have you had lots of push back? Rejections? How are mortgage companies viewing this relatively new & emerging asset class? 

Any anecdotal experience, advice welcome!

thanks 

[Deleted User]

From 70 lenders I work with,  only Norton home loans, Loughborough, Pepper, and Coventry will take deposit from crypto.

Here is an extract from Coventry's criteria which is fairly common:

If the deposit is coming from the sale of cryptocurrency, the customer/intermediary would need to be able to evidence the original cryptocurrency purchase was from their own resources and the subsequent sale is directly linked to their bank account.

MattPearce

Thanks Deleted_User. Wow so quite a tight market then? 
Seems odd that its good enough for HMRC to tax but lots of the mortgage market are not getting involved yet?
Maybe this will change at it becomes more mainstream over the years.
 

Thrugelmir

MattPearce said:

Seems odd that its good enough for HMRC to tax but lots of the mortgage market are not getting involved yet?
Maybe this will change at it becomes more mainstream over the years.
 

HMRC take payment in GDP not crypto. The Treasury isn't going to decline tax revenue to pay for public services. Very different to lenders being cauught up in an unregulated currency where the source could be illegal. Property is an ideal method of making money "legal". 

ACG

Interesting. 
Some lenders do not ask for proof of deposit and leave it to the solicitors to satisfy that requirement. 

I have some crypto myself and the amount of stuff I had to do was ridiculous. I felt like a criminal by the end of it. 

[Deleted User]

I suspect an offer would be retracted when a solicitor inevitably reports the source to the lender.  I would assume all solicitors would ask for permission to proceed with this.

[Deleted User]

MattPearce said:

Thanks Deleted_User. Wow so quite a tight market then? 
Seems odd that its good enough for HMRC to tax but lots of the mortgage market are not getting involved yet?
Maybe this will change at it becomes more mainstream over the years.
 

I suspect it will change a lot quicker if the market was regulated which it's not in the UK.
Thats why investments in shares is ok for deposit but investment in crypto isn't yet.  

MattPearce

Thrugelmir said:

MattPearce said:

Seems odd that its good enough for HMRC to tax but lots of the mortgage market are not getting involved yet?
Maybe this will change at it becomes more mainstream over the years.
 

HMRC take payment in GDP not crypto. The Treasury isn't going to decline tax revenue to pay for public services. Very different to lenders being cauught up in an unregulated currency where the source could be illegal. Property is an ideal method of making money "legal". 

Sorry, I think you are misunderstood. I am talking about using GBP derived from the sale of crypto assets. I don’t know any mortgage lenders that take the actual asset! Well I’ve heard of a couple actually but not really followed up with them. 

Crypto is actually a regulated industry in the UK. Crypto exchanges are subject to the same AML / KYC procedures as the equity brokers. Etc 

[Deleted User]

They are only regulated for money laundering.  There is no consumer protection laws that apply to non UK based crypto business as far as I know 

MattPearce

Deleted_User said:

MattPearce said:

Thanks Deleted_User. Wow so quite a tight market then? 
Seems odd that its good enough for HMRC to tax but lots of the mortgage market are not getting involved yet?
Maybe this will change at it becomes more mainstream over the years.
 

I suspect it will change a lot quicker if the market was regulated which it's not in the UK.
Thats why investments in shares is ok for deposit but investment in crypto isn't yet.  

Deleted_User said:

MattPearce said:

Thanks Deleted_User. Wow so quite a tight market then? 
Seems odd that its good enough for HMRC to tax but lots of the mortgage market are not getting involved yet?
Maybe this will change at it becomes more mainstream over the years.
 

I suspect it will change a lot quicker if the market was regulated which it's not in the UK.
Thats why investments in shares is ok for deposit but investment in crypto isn't yet.  

Deleted_User said:

MattPearce said:

Thanks Deleted_User. Wow so quite a tight market then? 
Seems odd that its good enough for HMRC to tax but lots of the mortgage market are not getting involved yet?
Maybe this will change at it becomes more mainstream over the years.
 

I suspect it will change a lot quicker if the market was regulated which it's not in the UK.
Thats why investments in shares is ok for deposit but investment in crypto isn't yet.  

Hey JMA. I agree. It takes time. However from
What I understand, the space is already regulated, exchanges are subject to the same AML & KYC protocols. 

I think some mortgage brokers may lack the IP to track payment well enough for their Compliance teams…. Seems odd some are able to offer mortgages and others aren’t though?

MattPearce

@ACG - nice! I noticed pepper money are a repeat client of yours…? (Other threads) 

Have you had any crypto derived deposits? 

They’ve OKayed mine so far, I’m still at under writer stage mind, so who knows, but they have confirmed they are willing to receive crypto derived deposits assuming I can prove buy > sell path. Which is good!