Mortgage Expert: How Blockchain Is Impacting the Mortgage Industry

Do you want to know how blockchain technology is impacting the mortgage industry? Read on to learn more.

The mortgage industry is traditionally a slow-moving industry. Assuming a buyer has already found a place, closing on a house can still take 30 days or more. During that time, anything can happen.

Fortunately, there is a way to make buying and selling property easier for everyone, and that's with new technology such as the blockchain. If you're a mortgage expert who hasn't looked into blockchain technology, that needs to change.

What is the blockchain, and how will it change the mortgage industry? Keep reading to find out.

What Is the Blockchain?

First, let's explain what blockchain technology is. In brief, it's a digital ledger. This ledger could record a purchase or sale, including all details of the transaction, such as the amount, item bought, and even digital signatures of the persons involved.

This isn't too unusual from traditional transaction recording. However, what sets the blockchain apart is that it is decentralized. Unlike a bank or credit card company which operates around a central hub, with the blockchain, everyone node or computer on the network has a copy of the ledger. With every transaction, each copy of the ledger gets updated.

Blockchain and the Mortgage Industry

So why should the mortgage industry adopt blockchain technology?

To start with, the lending process can have the blockchain act as a custodian. Mortgage lenders can remove any unnecessary manual oversight of the lending process, saving time and costs. Instead, document verification can be done digitally.

With a record on the blockchain, it's hard to tamper or lose a loan file. There's a greater level of security to the process.

The blockchain can also use smart contracts. Smart contracts consist of a set of rules. When met, the contract is executed automatically.

For a buyer or seller, this means settlements can be much faster. A process that may take weeks or months from start to finish could be completed in mere days.

While this all sounds good, there are, of course, caveats to using the blockchain. Cryptocurrencies such as Bitcoin are built on the blockchain. While digital currencies have seen some interest as an investment, their real-world use cases are still lacking.

That's not to say you can't buy a house with crypto, but it is uncommon. Crypto is a volatile asset, but trading it for a less volatile asset may be appealing to some home buyers. However, real estate agents would need to be willing and able to accept a commission in the form of crypto.

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The mortgage market could be changing sooner than we think.

For now, check it out for yourself. If you have any questions, feel free to send us a message.

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