Should You Use A Credit Card To Pay Your Mortgage
As with all financial decisions, the most important step you take in deciding whether to use your credit card to pay a mortgage is to determine if the costs are worth the rewards.
Homeowners need to do a cost-benefit analysis to see if they are gaining anything by paying with a credit card, Washington says. In most cases, they arent.
Weigh the following considerations before you make a decision:
Add up all the fees involved. Its critically important to calculate the fees that come with using the various services and options for paying your mortgage with a credit card, Dallal says. Take the time to find out exactly what the fees are, do the math and figure out if this is worthwhile or will just wind up putting you deeper into debt.
Determine when you can pay off your credit card. If you can pay your credit card off quickly, the fees could cost less than any late fees your lender charges. However, if you cant pay it in a timely manner, interest will accrue, adding to the cost of paying your mortgage with a credit card.
Compare the costs of buying credit card rewards outright to earning them through payments. If youre close to moving up to the next rewards level say, earning a boost of airline miles find out how much buying those miles would cost. Then compare that amount to the fees youd incur from using your card for mortgage payments.
Can You Make Mortgage Payments With A Credit Card
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Whether you want to rack up points on a rewards credit card or give yourself some breathing room during financial hardship, you can pay your mortgage with a credit card. Youll have to find a workaround to do so though, because mortgage companies wont let you make payments directly with them using a credit card. Plus, its important to understand other factors involved when paying your mortgage with a credit card, such as possible fees and other financial consequences.
Read on to learn how to pay your mortgage with a credit card and what to consider before you do.
Can I Use My Credit Card After Mortgage Approval
If you’re buying or refinancing a home but haven’t closed on your home loan yet, avoid applying for a credit card after a mortgage approval or running up charges on your existing accounts. … After you’ve been approved for your mortgage and closing day has passed, you’re in the clear to apply for a new credit card.
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How Does Credit Card Debt Affect Affordability
During the affordability assessment, lenders look at your incomings and outgoings to assess whether or not you can afford your monthly mortgage payments based on the loan value and term length. Any credit card debt is considered when assessing your affordability. This is so that the lender doesnt lend more to you than you can afford to pay back if youre also paying back other debts.
The exact effect that credit card debt has on your affordability will depend on the details of your credit card and the lenders own calculations.
Taking A Hit On Your Credit
Paying your mortgage with your credit card will also increase your credit utilization ratio, which isnt good for your credit score. It means youre using a greater percentage of your available credit. Amounts owed is a major component of your , accounting for 30% of your score.
Your credit score may decline if you increase your credit utilization because the more credit you use, the more it looks like youre at risk of overextending yourself.
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What To Watch Out For
The biggest concern is timing. When you pay with your credit card via a service, it takes time for the check to reach your provider.
Make sure you fill out all the correct information and schedule your payments early enough to account for the delivery delay. You dont want to pay any late fees or penalties because of the mail.
A single late payment dinging your credit can throw all those credit points right out the window.
To avoid this, make sure the first payment you make is earlier than your due date. Just send a little test pre-payment to make sure its all processed properly. Better safe than sorry.
Go enjoy those points!
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Using An Online Provider
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Can You Pay Off A Loan With A Credit Card
Paying off a loan with a credit card will depend on the lender and the type of loan. If your lender allows it and you are given enough of a credit limit, you may be able to pay a portion of your entire balance of your home, car or student loans with a credit card.
Federal student loan issuers, however, are restricted by the Department of Treasury from accepting credit card payments.
It’s also possible that certain loan providers have their own policies regarding loan payment using a credit card. You can always contact your lender to learn about your options.
It’s more common to see credit cards paid off by debt consolidation loans, but there can be cases where it might make sense to consider using credit cards with low or zero percent promotional periods to pay off a loan.
It’s something to consider if you have a high interest rate on your loan, and your budget can handle the size of the monthly payments you need to make to wipe out the debt before the low or zero percent interest rate period expires.
To Pay Your Mortgage With Your Credit Card Look Into A Third
When it comes to paying your mortgage, using a credit card can sound like a good idea since you could rack up cash back, points or miles. Plus, instead of having to part with your hard earned cash immediately, you could instead shell out the dough when your credit card bill is due. Unfortunately, most mortgage providers dont allow credit card payments. Even if your provider does, youll usually have to pay processing fees if you use a credit card. But you do have a way to get around any restrictions: by using a third-party bill payment service. One way to avoid processing fees is to use a Visa or Mastercard branded credit card through the Paytm bill payment service.
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Is Combining Credit Card Debt With A Mortgage An Option
Some lenders may allow you to remortgage your property for the mortgage balance remaining plus some extra so you can pay off your credit card debts, via a debt consolidation mortgage. This basically means that your debts will be consolidated into one big debt your mortgage. For debt consolidation, its best to speak to a mortgage broker like John Charcol who can walk you through how it works.
Bear in mind that while consolidating debt can allow you to pay off credit cards sooner, the debt itself simply becomes part of your mortgage and is secured against your property, which means you may pay more interest overall as you pay back your mortgage over time.
Mortgages And Credit Card Debt
Applying for a mortgage with credit card debt can be more difficult than a regular mortgage application, but it’s still very much possible. If your credit card debt is minor and its well within your abilities to pay it back alongside your mortgage then it shouldn’t affect the deals available to you too much.
If you have major credit card debt this can affect your affordability and your mortgage options. Any missed or late payments or defaults will also limit the deals available to you. In this case, consider specialist lenders who offer mortgages to people with adverse credit.
If you’re having trouble getting a mortgage due to debts, consider the help of a professional mortgage broker. At John Charcol, we have plenty of experience getting people great mortgage deals even if they have issues with debt. Get in touch today to see how we can help.
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What Bank Does Dovenmuehle Mortgage Use
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The Dovenmuehle Mortgage Company services home loans and provides mortgage banking services. They are headquartered in Illinois and have been in business for over 50 years. The company services loans for homeowners in all 50 states.
Our track record for providing high-quality products and services demonstrates our ability to meet this requirement. We are well-known for producing high-quality and innovative mortgage products. Our customers can expect the best from us. Our team of dedicated and experienced professionals is dedicated to providing our customers with the best possible service. Our customers can rely on us to provide them with a diverse range of services and products. Our customers can rely on us for a wide range of products and services.
Earning Rewards On Your Mortgage Payment
You may be able to earn rewards by paying your mortgage with your credit card. Before you make that choice, weigh any transaction fees against the rewards youd earn. For example, if you were earning 1.5% rewards on the transaction, youd earn $15 by paying a $1,000 mortgage, but the card processing fee could up to $30. Its not worth it. Unless, however, you were putting your mortgage on your credit card to earn a signup bonus. In that case, the lump sum rewards youd earn would offset any processing fee you pay on the transaction.
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Dovenmuehle Mortgage Make Payment
At Dovenmuehle Mortgage, we make the payment process easy and convenient for our customers. Whether youre making a one-time payment or setting up recurring payments, we have a variety of options to choose from. Our online payment portal is available 24/7, and we also offer a convenient automatic payment option. We make it easy to stay on top of your mortgage payments, so you can focus on whats important owning your home.
Dovenmuehle Mortgage, an American mortgage subservicing company, serves loans on behalf of banks, mortgage banking entities, credit unions, and housing finance agencies. The Lake Zurich, Illinois-based company, founded in 1844, is a financial institution holding company with a diverse portfolio of 250 financial institutions and thousands of mortgage loans. The law allows for a $9.50 fee to be charged when you use the automated system or contact a customer service representative. When it comes to avoiding a late Dovenmuehle mortgage payment at all costs, you must remember that mistakes do occur. If you dont keep up with your payments on time, your credit score could suffer. When your mortgage is late, you may have it on your credit report for up to seven years. Here are three proven ways to remove late payments from your credit reports.
To Dodge A Late Mortgage Payment
If youre late on your mortgage payment, your lender might impose a fee of 5% or 6% of your monthly payment. Even if you have to pay a processing fee to make your mortgage with a credit card, it might be worthwhile to avoid the late fee your lender might charge not to mention help you stay in the lenders good graces.
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Can You Use A Credit Card To Pay A Mortgage
You cant pay your mortgage directly using a credit card, but you can do so through indirect methods. Some of these include going through a third-party service, making a balance transfer, purchasing a money order using your credit card, or getting a cash advance. Each of these methods will come with its own set of fees.
How To Pay Your Mortgage With A Credit Card
A third-party payment service like Plastiq facilitates mortgage payments with a Discover or Mastercard credit card. Visa and American Express dont currently allow mortgage payments through this service.
You pay Plastiq a fee equaling 2.9% of your mortgage payment every time you use your credit card. Plastiq then delivers an electronic payment if the lender accepts it, or it cuts the mortgage lender a check, eliminating the need for all three parties the mortgage lender, the credit card issuer and the credit card payment network to approve the transaction.
You can pay manually this way or set up automatic payments. You also have the option of making a one-time payment.
Ideally, you then turn around and immediately pay back your credit card for the amount of the mortgage payment plus processing fee. If you made the transaction with an eligible rewards credit card, you’ll earn rewards as you would with any other purchase.
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Can You Pay The Mortgage With A Credit Card
It’s your credit card and it’s your mortgage. You’d think it’d be no sweat to use the former to cover the latter as long as the bill gets paid perhaps to rake in credit card rewards on that hefty expense, or to buy some time to cover your house payment if you’re short on money. But that’s not always the case.
In fact, its generally a stretch to find companies that accept debt-for-debt payments. Whether you have the option to pay your mortgage by credit card depends on several factors, including the terms of the card issuer, your mortgage lender and your credit cards network Visa, Mastercard, American Express or Discover.
A third-party service may let you get around some of the roadblocks for a fee, but you’ll want to think through whether it’s the right move.
Struggling to pay your mortgage? Consider these options: Find mortgage assistance Contact your lender about COVID-19 relief programs How to pay bills when you can’t pay your bills
Use Your Mortgage Protection Insurance
is designed to cover the cost of your mortgage payments for up to 12 months if youre unable to work because of injury, illness or involuntary redundancy.
If you have a policy, check the terms and conditions to see what youre actually covered for before putting in a claim.
Alternatively, you might be able to claim on other types of income protection, including cover.
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Should You Pay Your Mortgage With A Credit Card
If you can navigate the waters to make it possible, paying your mortgage with a credit card is an option, assuming the rewards outweigh the fee. As long as it won’t hurt your credit and your budget, its worth considering.
But if youre already using a large chunk of your credit limit, or if youre tight on money for bills this month, putting your mortgage on a credit card isnt the best idea. It could hurt your credit scores and end up further straining your budget over the long term if you dont pay your credit card bill off in full.
Is It Worth It To Pay Your Mortgage With A Credit Card
Before making a mortgage payment with a credit card, determine whether its even possible. Cardholders should read credit card terms to determine restrictions. Cardholders should also consider which payment network they have 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 its 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, its probably not a great idea.
Mortgage loans typically have low interest rates . If the cardholder cant 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 cardholders credit utilization rate resulting in a lower credit score over time.
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