When Does It Make Sense To Pay A Fee
The easiest time to justify adding an additional fee to your rent is when you need to meet a minimum spending requirement to trigger a sign-up bonus â especially with cards requiring $5,000 or more in a certain time period. Some cards, such as the Capital One Venture Rewards Credit Card, require you to spend $20,000 in the first 12 months from account opening to lock in the full-fledged 100,000 bonus miles.
A hefty rent or mortgage payment can make it a lot more feasible for you to meet the minimum spending requirements to earn a card’s sign-up bonus or welcome offer. Otherwise, calculate the value of the points or miles youâll earn to determine if they are worth more than the fee youâll pay. If the fees for paying with a credit card are greater than the earnings you accrue, it’s likely a losing proposition to pay your rent or mortgage with a credit card.
However, when Plastiq has promos, or if you get enough friends and family to sign up through your promo code , you can come out ahead.
Related: You may have to pay a surcharge to use your credit card â hereâs what to know
When You Want To Maximize Your Rewards Points
If you have a rewards credit card, it can make paying your mortgage that way a very tempting proposition. At first glance, it seems like a great idea. Just make your monthly mortgage payment using a rewards card, rack up points, then pay off the card bill before interest accrues. Unfortunately, as mentioned above, most mortgage servicers these days arent allowing customers to directly pay with a credit card.
This type of activity making large monthly payments on a mortgage or to a landlord for rent using a rewards card is referred to as manufactured spending. frown on this, and many mortgage companies are also credit card companies. So, its increasingly difficult for customers to pull this off, but you can always check directly with your servicer to find out if its allowed.
If your servicer does not allow direct payments, then you probably dont want to use your credit card to pay indirectly unless the rewards you stand to accumulate are truly outstanding. Thats because the third-party service that will accept credit card payments on your servicers behalf will likely charge you more in transaction fees then youd make in credit card rewards.
Can I Pay My Mortgage With A Credit Card
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Consider Fees And Interest
It doesnt usually make sense to pay your mortgage with a credit card if you want to spread out your monthly payment or catch up on bills. Your mortgage likely comes with a low and often fixed interest rate, whereas the average credit card interest rate is currently over 16% and many credit cards have variable rates. If you transfer secured debt at a low rate to an unsecured credit card charging a steeper interest rate, youre putting yourself on a slippery slope to financial disaster.
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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
Mortgage Payments With A Credit Card
Through a third-party payment service, such as Plastiq, you will not be charged a fee to pay a mortgage with a credit card. Every time you use a credit card, Plastiq charges you a 2.5% fee. If your bank does not accept PayPal as a payment method, you can also pay your mortgage with it. You may also be able to use your credit card to obtain a cash advance.
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There Are Only A Few Situations Where It Makes Sense
InvestopediaForbes AdvisorThe Motley Fool, CredibleInsider
Do you want to pay your mortgage with a credit card? It might be possible, but it will probably cost you. How do you do it? Whats the cost? And when is it worthwhile? This article will answer all of your questions about charging your monthly mortgage payment.
You Want To Avoid Late Payments
Some people want to make mortgage payments with their credit cards because they have a temporary cash flow issue. They want to avoid late payments or the fees that come with them.
Whether you have a temporary issue or ongoing hardship, your mortgage company may be willing to waive these fees if you can explain your situation and you otherwise pay regularly. Some mortgage companies will be willing to entertain removing late payments with a goodwill letter.
If youre a Rocket Mortgage® client experiencing an issue, we encourage you to contact us through your Rocket Account 1.
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What To Know Before You Pay Rent Or Mortgage With A Credit Card
Besides not earning a higher value from the points you earn compared to the fees you’re paying, there are a couple of things to keep in mind when considering paying your bills through these providers.
The first is to make sure they donât code as cash advance charges, which earn no rewards and have high interest rates. The services listed above claim to be set up to ensure it doesnât happen, but I always call my card issuer and request the cash advance fee be lowered as close to $0 as possible before completing a payment.
Second, you should be mindful of the length of time it can take these payments to be completed. If the provider is mailing a physical check to your bank or landlord, you canât request the payment the day before itâs due. Give yourself plenty of lead time and monitor the payment closely until you have confirmation it was received. You’ll want to allow at least a full week from when you initiated payment for your landlord or mortgage provider to receive your check.
And most importantly, you should never be charging your rent or mortgage to your credit card to finance a payment you can’t afford. As always, with rewards credit cards, you’re only going to come out ahead when you avoid interest charges by paying your bills in full and on time.
Convenience Vs Cost: Is It Worth It
Although its one of the big four along with air, water, and food shelter is often the most expensive human need. And paying that big housing bill is even more frustrating for credit card rewards enthusiasts who see thousands in rewards going unearned each year.
But while you can find ways to pay your rent or mortgage with a credit card, even one that earns rewards, it isnt always the most worthwhile procedure.
Unless you have a card with points that you value above the amount of the processing fee or are working toward a big signup bonus, you may want to skip the plastic. Stick to old-fashioned checks to pay your rent or mortgage.
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Use Tio To Pay The Mortgage With Discover Mastercard Or Visa
- Tio used to allow homeowners to make mortgage payments with any credit card
- Other than American Express
- With virtually every bank, lender, or loan servicer for a variable fee
- But then they got bought out by PayPal and were promptly shut down
Theres a similar service called Tio now owned by PayPal that lets you pay a mortgage with a credit card in a matter of seconds. You dont even need to sign up.
All you have to do is select a mortgage company from the handy list on their website , then enter your loan number and payment amount.
From there, simply click on the credit card icons and enter your credit card information. It will then display the fee, which tends to range between 2.5% and 3%.
Interestingly, they seem to charge varying fees based on payment amount and based on the mortgage company you select. It appears to be more expensive for smaller payments, such as 3% for $1,000 payments, and a bit cheaper as your payments rise.
If youre okay with everything, you simply hit pay this bill and Tio will deliver your payment within 2-3 business days they say.
The upside is that Tio is super fast, the downside is it can be more expensive than Plastiq, and they dont accept American Express for mortgage payments. However, they seem to still accept Visa cards.
Plus, they list tons of major mortgage companies like Chase, Citi, Ditech, Nationstar, Ocwen, PNC, Quicken, Wells Fargo, and many more.
Is Freedom Mortgage Trustworthy
The Better Business Bureau gives Freedom Mortgage a A+ rating. A good BBB grade typically indicates that a company responds effectively to customer complaints, advertises honestly, and is transparent about business practices.
Freedom Mortgage does have a couple of recent public controversies.
The Consumer Financial Protection Bureau fined Freedom Mortgage $1.75 million in 2020, claiming that loan officers purposely entered incorrect sex, race, and ethnicity information on borrowers’ home loan applications. The order states that from 2014 to 2017, if a borrower didn’t fill in the race/ethnicity section of an application, officers marked it as non-Hispanic white.
In 2020, Freedom Mortgage paid $75,000 to settle allegations from the California Commissioner of Business Oversight that the lender didn’t properly reconcile some of its trust accounts, commingled operating funds with trust funds, and caused debit balances to exist in borrowers’ escrow accounts.
On its Zillow lender profile, Freedom Mortgage has a 4.85 out of 5 stars, based on 1,855 customer reviews.
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Paying The Mortgage With A Credit Card Topics:
These services charged fees for the convenience, and looking back, they were probably only offered because people couldnt keep up with their mortgage payments, and eventually their credit card payments either.
Chances are these same people had to execute a balance transfer shortly after
Unsurprisingly, these services seemed to disappear as quickly as they surfaced, but there are still options to pay the mortgage with a credit card each month free of charge, even if mortgage lenders wont let you do it directly.
The Impact On Your Credit Score
Before you pay your mortgage with a credit card, make sure you have enough available credit to process your mortgage payment and any fees charged. Otherwise, the transaction may be declined and you may face additional fees.
Charging your mortgage payment could raise your credit utilization and impact your credit score, particularly if you dont have a high credit limit on your credit card. Your credit score may recover from points lost due to high credit utilization once you pay your balance down and leave it below 30% of your credit limit.
Even if youre able to pay your mortgage with your credit card, you only want to do this if you can afford to pay your balance in full. Your mortgage payment already includes a certain amount of interest . You dont want to pay more interest on top of that by carrying a credit card balance.
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An Example Of Paying Your Mortgage With A Credit Card
After reading a headline like How We Earned $2,000 in Credit Card Rewards Paying Off Our Mortgage, who wouldnt want to pay their mortgage with a credit card? Its a true story that personal finance blogger Holly Johnson pulled offand she used the rewards to help fund a Mediterranean cruise for her family of four.
However, she was only able to achieve it because her platform as a high-profile blogger allowed her to earn thousands of dollars in free Plastiq transactions by referring her readers to the service. Most of us cant do that.
Still, if you have excellent credit, you’ll find many opportunities to earn substantial credit card sign-up bonuses. All you have to do is spend a certain amount within three months of being approved for the card.
How To Make A Freedom Mortgage Payment
Make your Freedom Mortgage payment using these options. Mortgages 101
There are many different ways to make your Freedom Mortgage payment. Whether youve taken out a mortgage for your new home, transferred your loan from another servicer or refinanced to get the best Freedom Mortgage rate, you need to make your mortgage payments on time using the method that works best for you.
Keep reading to find out how to make a mortgage payment with Freedom Mortgage.
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My Freedom Mortgage Account
https://www.freedommortgage.com/my-mortgage
Can I pay my mortgage online? Yes! Freedom Mortgage offers you the option to make a one-time payment or set up recurring payments through our website. Simply login to your account or create a new account if you havent already set up your online access. Select One Time Payment from Account Details. On your first visit, you can set up your banking information. For
Can I Make A Credit Card Payment With A Credit Card
The short answer is no. Credit card companies don’t allow you to make minimum monthly payments, or to pay off an outstanding balance, with another credit card from a different company. … Both balance transfers and cash advances can be two quick ways to try and reduce your outstanding debt on an existing credit card.
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Amount You Could Borrow
The amount you can borrow is typically a multiple of your salary , but this multiple will depend on whether your application matches a lenders affordability criteria, and they may be more restrictive if you have a default. However, some lenders will process your application with an underwriter before deciding on how much theyll lend you.
If you have clean credit, you could borrow up to 5x income or more in certain circumstances, though this usually isnt available for borrowers with defaults. If your default is over three years old, you could borrow around 4x income. Generally, the more severe the adverse, the higher the risk, and so the lenders accepting it will limit loan to income to a greater degree.
For self-employed workers, you may have to evidence three years earnings, while others are happy to lend to offer mortgages for self-employed people with 1 years accounts. Some demand those in employment who have been in the same role for 12 months, some with the same employer for 12 months etc.
Also, bear in mind that not all lenders will factor in overtime, bonuses and other additional incomes, though a mortgage advisor can help you find a lender who will.
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How Freedom Mortgage Works
Freedom Mortgage offers home loans in all 50 US states, as well as Puerto Rico and the US Virgin Islands. It also has physical branches in the following states:
You’ll need a 620 credit score for a conforming mortgage, 640 for USDA, and 550 for FHA and VA. When you have a credit score below 580 on an FHA loan, you’ll need to put at least 10% down.
You can choose between a regular rate-and-term refinance or a cash-out refinance. You may also streamline refinance your FHA, VA, or USDA mortgage.
Some lenders allow you to apply with non-traditional credit, like proof that you pay bills on time, if you have a low credit score or none at all. Freedom Mortgage requires a credit score, though.
To contact customer support, call Monday through Friday from 8 a.m. to 10 p.m. ET, or Saturday from 9 a.m. to 6 p.m. ET.
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Using Plastiq To Pay The Mortgage With A Credit Card
- Plastiq allows mortgage payments via credit card
- But only with a MasterCard or Discover card
- They no longer accept Visa or American Express cards
- You must also pay a transaction fee of 2.5% or less
There are some companies that allow you to pay rent or the mortgage with a credit card in exchange for a small transaction fee.
Unfortunately, most credit cards dont earn cash back or points at levels this high unless its in a bonus category. And these companies often arent in any bonus category whatsoever.
The one exception is the old AT& T Access More credit card, which earns 3X per dollar on all online purchases. That seems to include services like Plastiq. This allows you to come out ahead.
Even if you cant come out ahead dollar for dollar, it might be worth it for some people looking to meet a minimum spending requirement to earn an opening bonus, or just to buy some time on that monthly payment .
For example, if you need to spend $5,000 in the first three months to earn a signup bonus, paying the mortgage can probably put a big dent in that requirement. And its only $125 in fees if you use Plastiq for the entire amount. If the reward points eclipse the cost, you win.
Important note: Plastiq currently only accepts MasterCard and Discover. They recently stopped allowing mortgage payments to be paid with a Visa card and American Express cards. That means youre limited to the other two major issuers, which still isnt bad.
