How to Pay Your Mortgage With a Credit CardCredit cardholders can pay a mortgage using a credit card, but they’ll have to jump through a few hoops to do so Show
If you purchase an independently reviewed product or service through a link on our website, Rolling Stone may receive an affiliate commission. We may receive payment from affiliate links included within this content. Our affiliate partners do not influence our editorial opinions or analysis. To learn more, see our Advertiser Disclosure. Savvy miles and points collectors try to put every expense they can on a credit card to earn bonus points. What expense is larger than your mortgage payment? Credit cardholders can pay a mortgage using a credit card, but they’ll have to jump through a few hoops to do so. Generally, it’s not a good idea for cardholders to make a large purchase with a credit card if unable to pay it off completely by the end of a monthly billing cycle. The high interest fees that accrue would outweigh any short-term benefit to making a large mortgage payment. Related: Best Credit Card Bonuses For 2021 Mortgage lenders like banks or credit unions typically don’t accept credit card payments for a few reasons. When a credit card holder makes a payment on a mortgage loan using a credit card, he or she essentially transfers debt from the loan to a credit card account. If borrowers can’t pay off a credit card balance in time and run out of options to make mortgage payments, defaulting on a mortgage loan becomes a possibility, which no lender wants. Some lenders also prefer not to pay any processing fees usually associated with credit card purchases. But all is not lost if you are willing to jump through a few hoops. How to Pay Your Mortgage With a Credit CardEven though most mortgage lenders don’t directly accept credit card payments, there are workarounds for the average credit cardholder. Use a Third-Party Payment Transaction AppPlastiq is currently the only working payment system that lets people pay for their mortgage with a credit card, and it’ll cost 2.85% of the transaction in fees. They’ll send a check to the mortgage lender for the amount purchased. For someone aiming to get a one-time sign up bonus, using Plastiq could be a good option. Cardholders should be aware that Plastiq doesn’t support every credit card issuer nor every payment network. Editor’s picksGet a Prepaid Card or Money OrderCredit card holders could opt to purchase a prepaid Visa card from a grocery store or other local store and use that to make a mortgage payment online. Double-check with the mortgage lender to make sure they accept prepaid cards as online payments. If they do, there may be a small fee associated with it. Another option is to use the prepaid card to purchase a money order then take the money order to a local bank branch to make a mortgage payment. There are several important points to consider here:
Is It Worth It To Pay Your Mortgage With a Credit Card?Before making a mortgage payment with a credit card, determine whether it’s even possible. Cardholders should read credit card terms to determine restrictions. Cardholders should also consider which payment network they have (like Visa, Mastercard, Discover or American Express) because this could be a major hindrance to making a mortgage payment with a credit card. Check with the mortgage lender to see if any restrictions are placed on the types of payments accepted. Once the cardholder determines if it’s even possible, he or she should think about what the ultimate goal is for paying down the mortgage with a credit card. If using a credit card is the last resort due to financial trouble, it’s probably not a great idea. Mortgage loans typically have low interest rates (much lower than a credit card). If the cardholder can’t pay off a balance before the end of a billing cycle, higher rates would cause an increase in overall cost. Accruing large amounts of debt on a credit account would also increase a cardholder’s credit utilization rate resulting in a lower credit score over time. Reasons to Pay Your Mortgage With a Credit CardThere are a few scenarios where paying a mortgage with a credit card could be a good idea: Related Stories
Related: Best Credit Card Bonuses For 2021 The Bottom Line: Only You Can Balance the Risk and RewardsMaking a mortgage payment using a credit card is possible but it may not always be the smartest strategy for credit cardholders. There are considerable hoops to jump through to make this happen. While it may be the right choice for some, each cardholder should ask him or herself: Is it worth it? Sometimes the potential credit card rewards are worth more than any small fees incurred during the process, especially when there’s an opportunity for a big welcome bonus. But cardholders should spend time considering all the factors before biting the bullet. Make sure the credit card’s payment network allows cardholders to pay for a mortgage with their card. For example, Visa credit cardholders will not be able to make mortgage payments on a third-party payment processing site like Plastiq.com. Spreading out mortgage payments over time using a credit card is not an effective strategy. Be absolutely confident that the credit card balance can be paid off before the end of the billing cycle. Cardholders in a sticky financial situation should probably not use a credit card to make a mortgage payment. Not only is there high potential for spiraling debt, but the borrower could end up having a late or declined mortgage payment or worse, could default on the loan. Related: Best Credit Card Bonuses For 2021 Can I use credit card to pay my mortgage?If you want to pay for your mortgage using a credit card, you'll typically have to use a third-party service. Mortgage lenders and credit card companies usually don't allow credit cards as a valid payment method for a mortgage, but there are ways to get around this.
Why can't I pay my mortgage with a credit card?Mortgage lenders in general don't accept credit cards. One reason is that mortgage lenders would incur transaction-related fees. Lenders also don't like the idea of your paying one debt by taking on another debt. So this means you have to use a third-party service to pay your mortgage with a credit card.
|