How to Pay Your Mortgage With a Credit Card

Although you can pay your mortgage with a credit card, you should think about why you want to. Some people use credit cards to earn reward points, but this is rarely a good option. Others use credit cards because they are in financial difficulty, which is never a good option. Find an online service or buy a money order if you want to pay your mortgage this way.

Method 1 Using an Online Provider

1. Determine online service providers. There are numerous websites where you can pay your mortgage. You pay with a credit card, and the company issues a check to your lender. Among the more well-known providers are:

Tip. This company was formerly known as ChargeSmart.

RadPad. Many people use this website to pay their rent, but you can also use it to pay your mortgage.


2. Determine the cost. This type of online service is rarely offered for free. You will instead be charged a fee. RadPad, for example, currently charges a 2.99% fee on all credit card payments. As a result, if your mortgage is $1,000, you will pay a fee of $29.90.

Fees are subject to change, so be sure to double-check before using the service.

3. Determine whether you should pay your mortgage in this manner. Just because you can afford to pay your mortgage in this manner does not mean you should. If you want to pay your mortgage with a credit card to get a benefit, make sure that benefit outweighs the fee and potential interest costs of doing so.

Some reward cards will reward new users with a large number of points (35,000+) if they spend a certain amount of money in a short period of time.

[2] In this limited situation, making a mortgage payment with your credit card may be a good idea. For instance, your bonus could be $500, which is greater than the fee you pay to use a credit card.

Most credit cards only provide 1-2 percent cash back rewards. The online service provider fee will eat up any rewards, so paying your mortgage with a credit card is rarely a good idea.

It is never a good idea to use a credit card to pay off a mortgage because you are in financial difficulty. Instead, talk to your lender about other options.

4. Examine online reviews. Before using any online service provider, conduct extensive research. Check with your Better Business Bureau and pay attention to complaints that the company fails to deliver mortgage payments on time to lenders.

New businesses spring up all the time. Before entrusting a company to pay your mortgage, you must conduct extensive, independent research.

5. Make your mortgage payment. Some providers require you to register by providing your name and email address. Others do not necessitate registration. Remember to make your mortgage payment with the correct credit card.

Check to see if your mortgage payment was received on time by your lender. If not, contact the online company to find out why.

If you believe you have been duped, contact your local consumer protection office.

6. Make a payment on your credit card balance. Pay off the card in full before the grace period expires. If you don’t, you’ll owe interest on the balance, which will deplete any rewards you’ve earned. Because your mortgage payment includes interest, you’ll be paying interest on interest, which is never a good financial decision.

Method 2 Paying with a Money Order

1. Purchase a PIN-enabled gift card. A money order cannot be purchased with a credit card. Instead, you’ll need to use your credit card to purchase a PIN-enabled gift card. Visa provides a PIN-enabled gift card that can be used for this method.

You can’t just go out and buy any old gift card. Instead, the card must bear the word “debit” on it.

2. Put money on the card. There is usually a limit to how much you can load. For example, you can only load the card with up to $1,000 per day. These cards also have a monthly limit of $5,000.

3. Purchase a money order with the gift card. Many banks, grocery stores, and large retailers sell money orders. You’ll need to locate one that accepts debit cards. However, not all of them do. CVS, for example, has refused to sell money orders to customers who use debit cards.

However, the United States Postal Service accepts debit cards for money orders, which is a viable option.

When paying, don’t wave your gift card around or tell the cashier that you’re using a “gift card.” Pretend it’s a regular debit card linked to a bank account and use it to purchase your money order.

4. Use the money order to pay your mortgage. The money order should be sent to your mortgage servicer. You can hand deliver your payment to the nearest branch of a large bank if the servicer is a large bank.

Check to see if it has been received and the payment has been credited to your account.

5. Pay down your credit card balance. You now owe $1,000 on your credit card because you loaded $1,000 onto your debit card. If you do not pay it off before the grace period expires, you will owe more money. Each month, pay off your credit card in full.

Method 3 Getting Help with Your Mortgage

1. Determine why you’ve fallen behind. The reason for your financial difficulties will help you decide which path to take. Consider the following, which are common causes of financial difficulty:

Loss of employment. A job loss could be only temporary. If this is the case, you have more options for making up for missed mortgage payments.

Illness or incapacity. If your illness or disability is permanent, you may need to sell your home. If your disability is only temporary, you may be able to work with your lender. You can also file for bankruptcy to get rid of your medical debt.

A spouse has died. Unless your spouse had life insurance, your income will most likely be reduced for the foreseeable future. Rethink whether you can afford the house.

Mismanagement of funds. You may be living above your means. If this is the case, you should consider filing for bankruptcy to get rid of your credit card debt. In some cases, you may be able to keep your home.

2. Consult with a housing counsellor about your options. Contact your local Housing and Urban Development (HUD) office to find a qualified counsellor. You can also call 1-888-995-HOPE. Counseling is provided at no cost.

Discuss your options. For example, you may be eligible for help from the Hardest Hit Fund, which can assist homeowners in catching up on their mortgages or modifying their loans.

Be wary if you are unable to meet with a HUD-approved counsellor. There are many scammers out there posing as counsellors and trying to swindle you out of your home. Avoid anyone who wants you to pay a fee or sign over the deed to your home to them.

3. Make contact with your lender. Explain your situation to their loss mitigation department. Many lenders will work with you to keep you in your home, but you will need to go through some hoops.

You will be required to provide supporting documentation and fill out numerous forms. Your lender will want to ensure that you have a valid reason for your financial difficulties.

Always keep a copy of any documents you give your lender. Keep detailed notes on any phone conversations as well. Make a note of who you spoke with, the date, and the topic of the conversation.

4. Re-establish your loan. You pay off all past-due mortgage payments, as well as any late fees or penalties, with a reinstatement. If you had temporary financial difficulties but are now able to make payments, this is a good option.

Check with your lender to see if you can pay off overdue amounts in instalments.

5. Request forbearance. A lender may temporarily reduce or suspend your mortgage payments. Following the forbearance payment, you resume making regular payments and catch up on any missed payments.

6. Check to see if the loan can be modified. Your lender may be willing to modify the loan terms. If this is the case, you may be able to reduce your monthly mortgage payment, allowing you to remain in your home. Your lender may modify the loan in a variety of ways:

Lower the interest rate. This will result in smaller monthly payments and a lower overall payment.

Extend the loan’s terms. A 15-year mortgage can be extended to 30 years, and a 30-year mortgage can be extended to 40 years. You will have a lower monthly payment but will end up paying more over the life of the loan.

Overdue payments should be added to the balance. This is a great way to catch up because overdue payments are spread out over a longer period of time.

Reduce the amount of money you owe.

7. Consider the possibility of bankruptcy. If your bills are out of control, consult with a bankruptcy attorney. They can assess your situation and provide tailored advice. You may not have to lose your home if you file for bankruptcy.

7th Chapter A Chapter 7 bankruptcy can be used to discharge unsecured debt (such as credit card debt). However, you may lose your home in the process unless it has no equity or if the equity can be exempted. Your bankruptcy attorney can help you with this.

In Chapter 13, you create a payment plan that lasts three to five years.

Any missed mortgage payments are added to your payment schedule. You can stay in your home as long as you pay your mortgage on time.

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