Will lenders take Bitcoin as a deposit for a mortgage?
Banks and building societies have different acceptance policies on cryptocurrencies such a Bitcoin.
There is a still a lot of confusion whether these digital currencies are acceptable as a mortgage deposit and until recently many lenders did not have a formal policy.
The consensus among a selection of lenders is providing the Bitcoin has been transferred to cash and it is in a UK bank account at the time of application it should be accepted.
We recently arranged a bitcoin deposit mortgage through Santander although the bank required paperwork to back up the application to satisfy money laundering rules.
Skipton Building Society and Halifax will potentially accept Bitcoin while others like Accord Mortgages are not so keen. Coventry for Intermediates will also potentially accept Bitcoin as an originating source, but the funds will need to be in a bank account as available cash before the mortgage offer.
Aaron Strutt, product director at Trinity Financial, says: "One lender will potentially take cryptocurrencies for the deposit, but it will refer application over to the financial crime unit. It will ask for a copy of the statement from the fund platform and the bank statement for contribution trail.
“If someone has been legitimately trading in Bitcoin or another cryptocurrency and has a verifiable audit trail to show where the money they are putting up as a deposit has come from, there is a reasonable chance of the proceeds being accepted by a lender."
Cryptocurrencies are currently unregulated which puts them into the highest risk category in relation to money laundering.
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