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    • LookinForaBargain
    • By LookinForaBargain 9th Jan 18, 12:44 PM
    • 125Posts
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    LookinForaBargain
    Paying mortgage with credit card?
    • #1
    • 9th Jan 18, 12:44 PM
    Paying mortgage with credit card? 9th Jan 18 at 12:44 PM
    Hi guys,

    I need some advice.

    Does anyone know how you can pay your mortgage off with a credit card?

    I assume bank don't allow mortgage payments using a credit card but I saw a video on 'The YouTube' where a lady explained how you could pay off your mortgage in half the time using the credit card. You pay double the mortgage balance using the card and then pay off the card balance each month using your wages thus avoiding any interest charge.

    I know it seems too good to be true but thought I'd ask.

    Thanks
Page 1
    • amnblog
    • By amnblog 9th Jan 18, 12:48 PM
    • 10,148 Posts
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    amnblog
    • #2
    • 9th Jan 18, 12:48 PM
    • #2
    • 9th Jan 18, 12:48 PM
    You should not be involving credit cards in paying your mortgage.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • TadleyBaggie
    • By TadleyBaggie 9th Jan 18, 12:50 PM
    • 2,547 Posts
    • 1,876 Thanks
    TadleyBaggie
    • #3
    • 9th Jan 18, 12:50 PM
    • #3
    • 9th Jan 18, 12:50 PM
    You pay double the mortgage balance
    Originally posted by LookinForaBargain
    Can't be right, did you mean pay double the monthly payment?
    • LookinForaBargain
    • By LookinForaBargain 9th Jan 18, 1:29 PM
    • 125 Posts
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    LookinForaBargain
    • #4
    • 9th Jan 18, 1:29 PM
    • #4
    • 9th Jan 18, 1:29 PM
    Yes. Correct.

    My wife and I have a fairly good income so we're not worried about debt because we can pay that amount off each month but I want to know if it was possible.

    The lady is based in the US so I don't know what the rules are there.

    It seems very clever but I'm sure there's a reason why it isn't that easy.

    Here is the video for reference: https://www.youtube.com/watch?v=4GonTct2WMk
    • zx81
    • By zx81 9th Jan 18, 1:32 PM
    • 14,872 Posts
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    zx81
    • #5
    • 9th Jan 18, 1:32 PM
    • #5
    • 9th Jan 18, 1:32 PM
    Most lenders only accept credit card payments if you're in arrears.
    • LookinForaBargain
    • By LookinForaBargain 9th Jan 18, 1:32 PM
    • 125 Posts
    • 4,660 Thanks
    LookinForaBargain
    • #6
    • 9th Jan 18, 1:32 PM
    • #6
    • 9th Jan 18, 1:32 PM
    I've just read a comment about banks not accepting credit cards as payment. Her reply was:

    Link your credit card as overdraft protection to your checking account.

    Is that clever or not feasible?
    • pinklady21
    • By pinklady21 9th Jan 18, 1:34 PM
    • 353 Posts
    • 227 Thanks
    pinklady21
    • #7
    • 9th Jan 18, 1:34 PM
    • #7
    • 9th Jan 18, 1:34 PM
    Well have not watched the video - but I assume you are asking if you can use your available credit on a cheaper credit card to pay off a more expensive mortgage rate?
    In theory, you could withdraw cash from your credit card, use that to pay off a chunk of your mortgage, and then pay back the credit card every month. There will be a charge for the cash withdrawal, and you need to check what rate of interest would be charged by the CC co.
    I assume you would then try to transfer the remaining balance on the credit card to another credit card with a lower or zero percentage rate?
    While I would not do it.... it seems possible in theory.
    If your concern is a high mortgage rate, then why not remortgage to a lower one? If you have spare cash each month, then why not just overpay on your existing mortgage and pay it off quicker that way?
    I assume you are aware of any annual limits on the amount of your mortgage that you can repay?
    Last edited by pinklady21; 09-01-2018 at 1:41 PM.
    • TrickyDicky101
    • By TrickyDicky101 9th Jan 18, 1:35 PM
    • 2,888 Posts
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    TrickyDicky101
    • #8
    • 9th Jan 18, 1:35 PM
    • #8
    • 9th Jan 18, 1:35 PM
    I haven't watched the video so don't really know the ins-and-outs of what is being proposed but you cannot avoid all the interest on your mortgage if you still owe the bank money! You will get charged interest on what you owe.
    • zx81
    • By zx81 9th Jan 18, 1:36 PM
    • 14,872 Posts
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    zx81
    • #9
    • 9th Jan 18, 1:36 PM
    • #9
    • 9th Jan 18, 1:36 PM
    I've just read a comment about banks not accepting credit cards as payment. Her reply was:

    Link your credit card as overdraft protection to your checking account.

    Is that clever or not feasible?
    Originally posted by LookinForaBargain
    Neither. More like gibberish.
    • ViolaLass
    • By ViolaLass 9th Jan 18, 1:37 PM
    • 5,210 Posts
    • 7,224 Thanks
    ViolaLass
    I've just read a comment about banks not accepting credit cards as payment. Her reply was:

    Link your credit card as overdraft protection to your checking account.

    Is that clever or not feasible?
    Originally posted by LookinForaBargain
    That must be a US thing. It's not an option here (as far as I know).
    • LookinForaBargain
    • By LookinForaBargain 9th Jan 18, 1:41 PM
    • 125 Posts
    • 4,660 Thanks
    LookinForaBargain
    I can afford to over-pay but I can't afford to over-pay double each month.

    She is saying that, if you over-pay using the credit card then pay off the credit card each month so you wouldn't be liable for interest because you pay off the full balance.

    I appreciate there will be cash withdrawal charges but I'm trying to work out, over the long run, whether they will be worth it.

    FYI - My mortgage interest payments are £600 a month (ouch). If I can pay off the mortgage in half the time (15 years) then I'd save £115k in interest.

    If I had to pay cash withdrawal charges of say £50 a month, that's £9k over 15 years.

    Is there something I'm missing here??? I swear it sounds too good to be true. :-)
    • zx81
    • By zx81 9th Jan 18, 1:44 PM
    • 14,872 Posts
    • 15,699 Thanks
    zx81
    If you're paying cash withdrawal charges, it's definitely not worth it. It means you're paying 3% on an amount rather than one twelfth of your mortgage rate.

    It would only work if your mortgage rate was somewhere in the region of 40%.

    If it is, look at remortgaging.
    • CommitedToChange
    • By CommitedToChange 9th Jan 18, 1:49 PM
    • 1,181 Posts
    • 3,798 Thanks
    CommitedToChange
    "She is saying that, if you over-pay using the credit card then pay off the credit card each month so you wouldn't be liable for interest because you pay off the full balance."

    But why use the card if you pay it off in full every month - just pay that directly off the mortgage. Is it some weird deal to get points or cashback on the credit card - because otherwise you're just moving money around for no reason.
    Attempting to buy a house
    • ViolaLass
    • By ViolaLass 9th Jan 18, 2:05 PM
    • 5,210 Posts
    • 7,224 Thanks
    ViolaLass
    "She is saying that, if you over-pay using the credit card then pay off the credit card each month so you wouldn't be liable for interest because you pay off the full balance."

    But why use the card if you pay it off in full every month - just pay that directly off the mortgage. Is it some weird deal to get points or cashback on the credit card - because otherwise you're just moving money around for no reason.
    Originally posted by CommitedToChange
    Presumably because you could may a chunk off the mortgage at the beginning of the month but not have to pay the credit card until your pay arrived at the end of the month.
    • Mortgage_Adviser
    • By Mortgage_Adviser 9th Jan 18, 2:13 PM
    • 76 Posts
    • 33 Thanks
    Mortgage_Adviser
    From the jargons used such as checking account it sound it is not a UK thing for sure. It would be lovely if it was possible to pay mortgage with credit card without the fees.

    I just imagine paying offset mortgage with cashback credit card, moving the same money rounds and rounds every day. I could probably live of the cashback earned that way ;-)
    • pinklady21
    • By pinklady21 9th Jan 18, 2:14 PM
    • 353 Posts
    • 227 Thanks
    pinklady21
    But this would not mean paying off double the mortgage payment every month would it, as the credit card bill would also have to be repaid each month. So there might be a reduced debt for the first month, but after that all that is happening is that the mortgage debt is reducing about 2 weeks quicker, but is being replaced with a credit card debt that needs to be paid a few weeks later. Still not making sense to me....sorry.
    • ACG
    • By ACG 9th Jan 18, 2:23 PM
    • 16,100 Posts
    • 8,278 Thanks
    ACG
    The lady is based in the US so I don't know what the rules are there.
    Originally posted by LookinForaBargain
    That was going to be my first question.

    On your credit report, it would basically show as a late payment every other month.

    Have a look at your credit report, there will be loads of zeros (assuming you pay everything on time) which would then go to a 1 if paid late.

    So your payment record on your Mortgage would be 0 1 0 1 0 1 0 1 which would hammer your credit file and prevent you getting a normal mortgage again.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • davidmcn
    • By davidmcn 9th Jan 18, 2:29 PM
    • 6,513 Posts
    • 6,411 Thanks
    davidmcn
    It may be a load of nonsense even in the US, though you may be able to pay off your mortgage by getting lots of hits on a "this is too good to be true" video.
    • clairebeth
    • By clairebeth 9th Jan 18, 2:33 PM
    • 152 Posts
    • 58 Thanks
    clairebeth
    If, as you say, you can't afford to pay double the payment each month by overpaying, then how can you afford to pay that same amount on the credit card and pay the credit card in full? What's the difference?

    Overpaying is absolutely a valid possibility. Have a look at the calculators on here to see how much you could save by overpaying what you can afford. But if you can't pay the credit card, then all you're doing is going into credit card debt to pay off montage debt, not wise, I think.
    • Thrugelmir
    • By Thrugelmir 9th Jan 18, 6:12 PM
    • 56,700 Posts
    • 50,065 Thanks
    Thrugelmir
    FYI - My mortgage interest payments are £600 a month (ouch). If I can pay off the mortgage in half the time (15 years) then I'd save £115k in interest.
    Originally posted by LookinForaBargain
    Then overpay now by whatever you can afford and within the limits allowed by your lender. Compounding is your ally.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
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