Making mortgage payments via a credit card has for a long time been riled as ill advised and something that banks and credit card issuers alike were completely unwilling to accept. Even where processes have been put in place to allow for mortgage payment using credit cards, the process has often been tedious and impractical.
This has started to change recently though and using credit cards for to pay your mortgage is no longer outlandish. Where you have a mortgage company that discourages or resists the use of this form of payment, there are a number of legal loopholes you can use.
But what are the advantages of paying using a credit card? There is one major one. The first is that making the payment through your credit card ensures you pay the mortgage on time and are left with a credit card balance that is not due until the next month. In a sense, this means that you have taken a ‘loan’ to pay your mortgage installment on virtually zero interest rate (over the grace period) that leaves you with sufficient ‘float’ for use in other investments over the grace period.
There are three avenues that you can pursue when it come to making mortgage payments via your credit card. You can either pay using the credit cards cash advance option, by using convenience checks or using the credit card company’s online bill pay program. With the first payment option you simply ask the credit card company to issue you a cash advance, then ask for a cashier’s check made out to your lender.
Convenience checks on the other hand are similar to those you’d use for your checking account with the only difference being that they don’t draw from your available bank funds but rather from your credit card account. Most credit card companies regularly send out these checks – if yours doesn’t do so, you could always call and ask them for a few. Once you have your convenience check, write the amount due and to whom the funds are made out to, sign it and then mail it to the mortgage company.
Using the online bill payment is the third method. The credit card company allows you to make your mortgage payments to a particular lender online. Withdrawals are made from your pool of available credit and paid to your lender like a check. Below are the steps you would follow with the online bill payment option for your credit card.
1. Firstly you need to be sure that you can afford to utilize your credit card to finance your debt. If your card is able to absorb the roughly one month debt that you will incur through your mortgage then you can move on to the following step.
2. Select which credit card you are going to use to make the payments. There are some credit card companies that do not currently support this feature.
3. Do your research and gather all applicable information on the mortgage company and your mortgage. This should include details such as the lender’s mailing address, your payment’s due date and your account number.
4. The next step is to go to the credit card company’s website and click on the online bill payment feature selecting the option to make a mortgage payment.
5. Select the name of your lender from the provided drop down list and type in all the required data on the payment sheet before you verify your payment amount. The transaction should be completed after you click on the proceed button.
Unfortunately like with any good plan there are a few pitfalls you must be aware of. One of these is the fees that the credit card company will charge you for using these options. When you make use of the cash advance option or convenience checks, the credit card company may charge advance fees to your account.
In the case of the online bill payment feature the company will charge you a standard fee accompanied with a certain percentage of the transaction amount. These fees are particular to each credit card company thus it is always advised to check with your card company before you actually make the payment.
About the Author: Mirsad Hasic is the webmaster and editor of best credit card deals, a site where you will learn how to pick a credit card that suits your current needs while learning how to reach credit card debt relief.