Wed. Mar 3rd, 2021

The answer is yes, it is Possible. But here’s the more important question to ask: needed Do you pay your mortgage with a credit card?

It really depends on your reasons for whipping your credit card. For example, do you want to pay your mortgage with a credit card to earn rewards? Or do you need to pay by credit card to avoid foreclosure?

The first thing you should know is that mortgage lenders, in general, do not accept credit cards. There is a reason mortgage lender Transaction-related fees have to be paid. Lenders also do not like the idea of ​​paying off one of your debts when you take another loan.

Let’s get into this in depth, and then you will have a good idea whether this strategy is suitable for you:

Although your lender cannot accept a credit card for payment, it is still possible to pay using your mortgage Plastic, Third-party payment service. But this service is only available with MasterCard or Discover credit card.

You have to pay 2.85% processing fee, so it is not cheap. On plastic, you can add a credit card to your account. There is one more thing to keep in mind after paying your mortgage lender. The lender may take up to eight working days to receive payment. Therefore you must organize and factor in how long the lender will take to get your funds.

Now you know how to pay your mortgage with a credit card and how much it costs. If you are wondering why anyone would pay the fee, here are four scenarios where work can (or may not) be done using a credit card:

This may sound like a great idea, but there are some practical issues to consider. I have already stated a 2.85% fee for using plastic. You have to run the numbers to see how to come forward financially.

For example, suppose your mortgage payment is $ 2,000. Using plastic, you will pay a $ 57 fee (2,000 x .0285). If you get 2% cash back, you will earn $ 40 (2,000 x .02). So you will lose $ 17 on this transaction.

If you have read some online stories about how to earn great rewards in this way, you might be surprised that this strategy is not easy. In some cases, the award can be earned by someone in the personal finance industry, who has an affiliate relationship with Plasticik, which turns down any fees. On the other hand, some of these cases actually focus on earning rewards on sign-up bonuses. This is an idea that often works.

If a sign-up bonus is after you, it is easy to come forward. Suppose you can earn $ 2,000 or 50,000 miles (value $ 500 or more) within the first three months of opening a credit card account. In this case, your reward is $ 500 (or miles to redeem), and by deducting the $ 57 fee, you come ahead of 443.

But keep in mind that this is a scenario that will not happen often during a year. So if you are not going for the sign-up bonus, make sure you run the numbers when the fee is worth it. It probably won’t happen.

For some, using a credit card to make a mortgage payment is one way to avoid making a late payment. With a credit card, you get a short-term, interest-free loan. But this is only appropriate if your cash flow problem is temporary and when you can make full payment of the credit card balance due to it.

For a month, it may be worth avoiding a negative item on your credit report and paying a fee to hit your score. But if this continues, you will be caught in a growing cycle of debt. It’s basically the way payday lenders Makes you in debt.

sometimes, Shortage of cash can land you on the verge of foreclosure. You may think that the possibility of losing your home is worth using a credit card again and again. But since most credit cards are high annual percentage rate, Your finances will deteriorate over time.

If you are having trouble making mortgage payments without resorting to your credit card, do not be tempted to get a cash advance. Cash advances typically have very high APRs and a transaction fee. To make matters worse, there is no grace period. You will start paying interest immediately. If you are desperate for cash, check other relief options.

Most homeowners have the right to request a refusal, which means a break in your payments. If you are trying to use a credit card as a solution to your financial woes then you should consider this option.

The Coronavirus relief bill was passed to help Americans survive financially during the epidemic. The law applies to federally backed or federally sponsored loans such as Veteran Affairs, Fannie Mae and the Federal Housing Administration. But even if your mortgage does not fall under the federal umbrella, talk to your lender about refusal and other options. Consumer Financial Protection Bureau Hostage prohibition regulations have been observed during the COVID-19 epidemic. Some of the current relief options may expire soon, so don’t stop asking for help.

Hopefully, a new relief bill will come into effect soon. But for now, you need to take quick action to protect your credit.

Putting a large amount on your credit card affects you Credit utilization ratio, Which is the amount of credit you have used compared to the amount of credit available to you. Your ratio should be less than 30%, but to maintain a high score, keep it below 10%.

For example, if you have a $ 3,000 limit and use your card for $ 2,057 (remember, there is a $ 57 fee) mortgage payment, your usage ratio for that card is around 69% (2,057 / 3,000) . If you plan to pay your credit card bill quickly, your score may still be a hit, but if your ratio stays low, it will bounce back.

If you have a high score and you are financially in a solid position, it may be worth using your credit card to pay off your mortgage and then to earn a sign-up bonus. Just make sure that you do not take the balance in the next month.

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