Can You Pay Your Mortgage with a Credit Card?

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Can You Pay Your Mortgage with a Credit Card?

Don’t try this at home! 

There should be a fair warning before you get cracking. Of course, who wouldn’t be excited about this — a couple and their family went on a cruise, partially paid by the credit card points collected from paying off their house. 

That’s right. They paid off the balance of their home with their MasterCard. By doing so, they collected plenty of points which were more or less equivalent to $2,000 USD, which they used for their cruise. 

Here’s what they did. 

Instead of funneling cash via paper checks or online banking, they charged their mortgage payments to a credit card. What’s more? They neither paid for fees nor interest on their card as well. 

What they did was they made use of the benefits from the credit card. And not only that, they now own their home free and clear. Now, not everyone can pull something like this off. Remember the caveat at the beginning of this article — Don’t try this at home. It would have been easier if you could just copy and paste what they did and Presto! But, that is not the case.

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The couple was able to find a hack. But it’s not that simple. Some third-party services allow credit card users to put their huge purchases on their card for a 2.5% charge. The lenders let the customers use their credit cards to pay the mortgage. Some of these services relinquish that 2.5% charge on every purchase worth a thousand bucks if you refer a person to their service. 

Since the couple had a financial blog, they were able to refer hundreds of people through their blog site. It worked perfectly well for them but not entirely easy for others. Even if you can circumvent the credit card terms and cancel out the fees, finding a credit card that gives points that go beyond the fees is as scarce as a hen’s teeth. 

Some people are savvy cash managers and know how to handle their cash flow and stretch their rewards. Aside from the example mentioned above, these people find another workaround here. But it also comes with a fair warning. It’s a royal pain in the head. 

Here’s how. 

Some cards give the user sign-up bonuses in points but require you to spend a huge amount of money within a given time frame. If you do the math, there is no way on earth you can make this happen. 

Then how do you make a huge purchase in one go? 

Perhaps, this may be the best time to use your credit card to pay your mortgage. If you do that, you can get your bonus way faster than using your card for grocery and gasoline expenses. 

Sounds good, right? But there’s a catch. Some mortgage lending institutions do not like credit card payments because most cards charge a 2% transaction fee for processing the payments. Now, that doesn’t sound right for mortgage lenders. And here’s another thing. If you don’t religiously pay your credit card every month, your credit card dues will shore up like mad. You wouldn’t want that to happen, would you?

Also, be wary of the fact that most of the time, mortgage payments are considered a cash advance and cash advances as you probably know come with a hefty 5% fee. Think about how your expenses will have an impact on your credit score. 

Sometimes, huge purchases can be tricky and troublesome as this might increase some rates on your credit card. 

One of the big reasons why it worked for some people is they made sure that they paid their balance in full so they never spent a nickel in interest. So, the key is disciplined consistency in paying off the credit card balance on or before its due date.

If you’re still bent on paying your mortgage with a credit card, you may opt to use this option. You may convert gift cards into money orders. Purchase a Visa gift card with your rewards, then use these gift cards to pay money orders. make sure these gift cards are pin-enabled. 

Normally, you get these gift cards from groceries and you can set your PIN and use these cards to buy money orders from banks or from other facilities that sell money orders. It’s also crucial to find a way on how to use these money orders to pay your mortgage. Some banks accept money orders as mortgage payments. Just make sure you hold on tight to those money orders — if you lose them, it will cost you more. 

In conclusion, make sure you know the fees and all the leg work that goes with it. If you’ve been reading well, then you should have understood that this hack only works well when you have enough cash to pay your credit card in full every month. Make sure also that the benefits you get should be higher than the fees you pay. 

Paying your mortgage with your credit card does make sense — however, explore and be more creative in earning rewards — like paying your college tuition, utility bills, or health insurance. Just one of those few. Also, it might help if you have a ton of friends or connections to refer to.

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