Paying the Mortgage with Your Credit Card?

As you’ve probably heard, the mortgage crisis has made it increasingly difficult to obtain a decent rate on a home loan, let alone any financing (or refinancing) at all for some unlucky borrowers.

Many homeowners who obtained financing when subprime mortgages were still being offered have found their options run dry as banks and lenders continue to tighten guidelines and reduce high-risk offerings.

And now the ongoing credit crunch has spread to the consumer credit fold, forcing credit card limits down and APR higher.

Some believe the mortgage crisis will create a second wave of consumer defaults, forcing many borrowers to rack up credit card debt as they turn to plastic to make monthly mortgage payments.

Most borrowers who are having trouble making mortgage payments are simply charging it, in the hopes that they can delay major problems and wait for things to improve.

Unfortunately, it doesn’t make a lot of sense to pay your mortgage payment with your credit card, especially when the interest rate on a mortgage is typically much lower than a standard credit card interest rate.

But the general sentiment seems to be, make sure the mortgage is paid, and worry about the credit card debt later.

While it is more important to pay your mortgage than your credit card bill, neglecting to make timely payments on your credit card will ding your credit score and result in related fees and even universal credit default.

And after just a few monthly mortgage payments, you’ll find that your credit card limits will be reached, resulting in steep minimum payments and nowhere else to turn for the next month’s payment.

Maxing out those credit cards will also drop your credit score, and send a huge red flag to future potential creditors.

Remember, if you’re using credit cards to make your mortgage payment, you’re simply delaying the inevitable, especially as financing options will likely be limited for a good time to come.

If you’re behind on mortgage payments and contemplating plastic as a solution, consider seeking help immediately with your lender or a certified government counselor.

The longer you wait, the more severe the problem will become, and the result could be catastrophic.

Related Topics:

1. Loads of Brits Paying Mortgage with Credit Cards
2. Consumers Pay Credit Card Before Mortgage
3. Shed Those Holiday Credit Card Pounds
4. Best Borrowers Defaulting on Mortgage Over Credit Card
5. Order a Free Credit Report Long Before Searching for a Mortgage