"None of the journalists knew, or seemingly couldn’t find out a definitive list of which lenders would, or far more importantly would not, accept a deposit derived from Bitcoin."
The various iterations of the story revealed that Santander, Nationwide and Aldermore wouldn’t accept a deposit derived from the proceeds i.e. people who cashed in bitcoin for thousands of pounds, but Coventry BS, Skipton and Yorkshire BS would.
Now, Bitcoin for those who are unaware of it is a... Nope, can’t do it. It makes my head hurt to think about explaining the relative value of something that doesn’t actually exist but yet, you could buy a tropical island with.
Anyway, Bitcoin enjoyed a meteoric rise in value during 2017 and created tremendous returns for a number of people. The Daily Express reported that one public sector worker had built up £40,000 after investing in bitcoin for a deposit on a house.
So, can it be used for a mortgage deposit or not?
Well, the Building Societies Association view seems to be a reluctant yes. They say both that electronic currencies are in the highest risk category in relation to money laundering but also that UK mortgage regulation does not forbid using sterling proceeds from cryptocurrency transactions as a deposit.
They also said menacingly that “it is well known that such currencies are popular with criminals, who use them to launder the proceeds of crime”. I don’t have any bitcoin but if I did would that make me a part of the seedy criminal underworld?
I’m not here to debate the ethics of cryptocurrencies and I’m absolutely certain that brokers have far better things to do with their time.
What I found really interesting about this story as a former broker, is that none of the journalists knew, or seemingly couldn’t find out a definitive list of which lenders would, or far more importantly would not, accept a deposit derived from Bitcoin.
I’m not suggesting that it will be commonplace for clients to approach you with a crypto-based mortgage deposit but if they do that’s the problem that criteria searching is designed to address. Clients and cases simply don’t fit into neat little silos and although criteria changes may not be as regular as product changes they are still happening all the time. Let’s face it, the question of whether proceeds from cryptocurrencies could be used as a deposit for a mortgage would have been simply unheard of 12 months ago.
The problem:
What this means in the real world for brokers, and it could be about Bitcoin deposits or any other criteria, is when you find out that the lender won’t accept your client and infuriatingly never would have.
That, above all else, used to frustrate me when I was a broker placing a case. You guide a client through the application process, collating information about their circumstances, finding a product that looks to fit their requirements and then have the rug pulled out from under you at the last minute.
The only thing worse? That sentence. You know the one. The one that includes a variation of the phrase; “we’ve never accepted borrowers with X”.
This is probably the moment when you tap your head gently against the wall whilst mumbling choice profanities or you spot the ‘motivational’ poster of a cat on a branch telling you to ‘hang in there’ and want to do unspeakable things to whoever put it on the wall.
It is how we deal with this constant change that is important.
Getting the correct information is critical and this contains two very important parts. Yes, it has to be the right information but it must also be at the right time. As a broker I would spend hours reading lending criteria on product sheets or calling a helpdesk and often still not get the answer I needed.
Like every broker it didn’t feel like I was asking for much... just tell me upfront if you’ll accept my client’s circumstances!
The solution?
Well, the phrase that simply sums it up is ‘knowledge is power’.
Using an online criteria search solution means that you can find out upfront which lenders will consider your client.
No more drip feeding of information from a lender to a spreadsheet that would have given you the information that you needed... if only you’d had it a week ago.
Find a system that lets you input as many of your clients criteria quirks and oddities as you like to tell you which lenders will consider you.
It’s nice when a complicated situation has a simple solution.
