I Paid Off My Mortgage With a Credit Card — Here’s How (2024)

FAQs

Can I pay off my mortgage with a credit card? ›

Yes. Technically paying down your mortgage with a credit card is possible, but it is a complicated process. Mortgage lenders do not accept direct credit card payments, so you will need to find a workaround service like Plastiq to carry out the transaction.

Lenders don't typically accept mortgage payments by credit card because they would have to pay a credit card transaction fee, which can be as high as 3.5%. You'd also be paying a secured debt with an unsecured debt, possibly with a higher interest rate.

Paying down the loan can have a positive impact on your credit score, he said. In addition, if you don't have many other established credit accounts but have been making your mortgage payments on time, that helps establish a history of responsible credit management.

Use a third-party service.

While these are more commonly used for paying rent than mortgages, some companies (such as Plastiq) accept certain cards for mortgage payments. Plastiq charges a 2.85% transaction fee for each payment, and only accepts payment via Mastercard or Discover credit cards from select card issuers.

In general, mortgage companies and mortgage loan servicers do not accept credit cards as a form of payment. That's in large part because credit card companies charge merchants processing fees that mortgage companies aren't willing to pay.

First off, banks offering mortgage loans do not typically allow you to pay with a credit card directly, they usually only offer preauthorized debit, so you'll have to find a workaround.

Most banks don't accept credit cards for mortgage payments and you often can't pay your landlord directly with a card. You can still earn points on your rent and mortgage payments by utilizing a processing service. These platforms will let you pay with a credit card and send a bank transfer or check to your landlord.

Quick answer: Yes, you can through a cash-out refinance and it's a great option for some people.

Let your interest rates guide you when deciding in which order to pay down debt. That usually means sending any extra money toward credit card debt first, then personal loans, student loans, car loans and, lastly, your mortgage.

How many Americans have an 850 credit score? Only 1.31% of Americans with a FICO® Score have a perfect 850 credit score. While a score this high is rare among any demographic, older generations are more likely to have perfect credit. Baby boomers make up a whopping 59.4% of the people with an 850 credit score.

Why did my credit score drop 40 points after paying off debt? ›

If you take out a loan to consolidate debt, you could see a temporary drop because of the hard inquiry for the new loan. Your credit score can take 30 to 60 days to improve after paying off revolving debt. Your score could also drop because of changes to your credit mix and the age of accounts you leave open.

It could lower the average age of your accounts

If you paid off a car loan, mortgage or other loan and closed it out, that could reduce your age of accounts in VantageScore's calculations. That's also true if you paid off a credit card account and closed it.

Key Takeaways. Mortgage lenders don't accept credit card payments directly. Because of the fee, paying your mortgage with a credit card will not be worth it most of the time for most people.

You could potentially withdraw funds from your credit card using a cash advance, and use the money to make a home loan repayment. This strategy relies on cash advances being available on your credit card and not all cards allow cash advances. This is a costly option that is not typically recommended.

If your lender allows it and you are given enough of a credit limit, you may be able to pay a portion of your entire balance of your home, car or student loans with a credit card. Federal student loan issuers, however, are restricted by the Department of Treasury from accepting credit card payments.

Although it may be possible to buy an inexpensive house with a credit card, you won't be able to do the same with a down payment on a mortgage loan. That's because the primary purpose behind a down payment is to demonstrate your investment in the home to your lender.