Posted by John Doe
More and more people are making large purchases with credit cards. Why? Because nowadays most credit card services have reward programs. By putting large amounts on your credit cards you can amass points that can be redeemed for flights, hotels, or other rewards. Paying for your mortgage on your credit card can have huge rewards, but it can also be risky. If you’re thinking about making the switch to paying your mortgage by credit card, it’s best to speak to a mortgage professional first and make sure you are making the right decision. You may be hoping to end up on vacation, but just end up in more debt.
Here are some things to know about paying your mortgage by credit card:
- It Shouldn’t Be Used To Delay Payment
Putting your mortgage on your credit card because you’re short on cash isn’t a good idea. It may seem like a short-term solution, but if you fall behind on payments it will just lead to even more debt. Putting your mortgage on your credit card to earn points is great, but you should still be able to pay off that credit card every month.
Ideally, putting your mortgage on your credit card shouldn’t change anything when it comes to payments. You will still pay off your credit card each month, and the amount won’t be altered.
If you are having trouble meeting mortgage payments, there are people who can help. Contacting a mortgage professional will help you avoid falling deeper into debt.
- Not All Mortgage Brokers Allow Credit Card Payments
If you already know before you apply for your mortgage that you’d like the option of putting it on your credit card, then make sure you choose a mortgage broker who will allow card payments. Sometimes if your mortgage broker doesn’t allow card payments, you can arrange for the payment to be forwarded through your bank. However, the bank will usually charge fees for this, so it isn’t ideal, though it may be handy in an emergency situation.
- It Can Really Work To Your Advantage… If Done Properly!
If you are strategic about using your credit card to pay your mortgage, it can have huge rewards! Again, this is something to discuss with a mortgage professional so that you’re sure it’s an advantageous decision.
First, research the best kind of rewards card for you. For instance, if you travel a lot, choose a card that gives you air miles or points towards accommodation. Look for cards that offer sign-up bonuses. A sign-up bonus means that just by signing up for the card, you’ll get tons of points. However, there’s usually a catch: you need to meet the minimum spend within the first month or two of having the card in order to be eligible for the sign-up bonus. Putting your mortgage on your credit card is a great way to cash in on the sign-up bonus!
Arrange the payments to be made with your credit card (again, it’s important to make sure your mortgage broker accepts card payments before you try to pay, to avoid any third-party fees). Lastly, make sure you pay your credit card bill off, in full, each month. There’s no point in earning rewards if you’re also paying interest!
- It Can Help You Build Interest
If you pay your mortgage with a credit card, there will be a space between when the mortgage is paid, and when the credit card bill is paid. This means you can hold onto the mortgage payment in your account for a couple weeks longer, allowing the money to build a bit more interest. If your mortgage payment is large, and you stand to earn high interest, this is worth considering.
- There Are Limits
While it sounds like a great idea in theory, there are many limiting factors and reasons to second guess paying your mortgage with a credit card. As mentioned above, only certain mortgage brokers will accept credit card payments. If you are paying third party fees in order to pay by card, it’s not really worth it.
Paying your mortgage with a credit card is really only worthwhile if you’re able to meet your credit card payment each month, and if there are no third party fees involved. If you start paying more interest and incurring late fees as a result of your mortgage payment, it’s best to cease paying by credit card.
As you can see, there’s a lot to take into consideration when it comes to paying your mortgage with a credit card. It can be difficult to decide if it’s the right option for you. If you think you’d like to try making mortgage payments with your card, it’s best to speak to a mortgage professional. They will be able to advise you on whether it’s a good idea, and guide you through the process.