Paying Mortgage on the Credit Card (loan, interest rate, annual fee, mortgage companies)

[callsnap]

Congratulations, you can finance your home through unsecured debt. All you need is a prime loan, an American Express Card, and your lender to partner with Amex.

I'm in. I'm a disciplined spender. I do not carry personal credit card debt. I travel heavily on business and rack up significant points, which I use regularly for personal travel. (This Dec I'm taking myself and mom to South Africa first class, all on points). I think I'd be able to benefit from this program.

There are "cash back" rewards options as well, where one could apply the cash as an additional principal payment on the mortgage or contribute to a Roth.

That said, the ability to pay a mortgage on time is no indication of responsible management of unsecured debt and overall spending behavior. Undisciplined spenders could unnecessarily put their homes at further risk. A 6% mortgage interest rate could become a 27% rate if the individual fails to pay off outstanding credit card debt.

It's only a matter of time before other lenders/ card companies follow suit. The door is officially open to put the house on plastic. In your opinion, what are the implications?

Here's a link to the article: "American Express - Don't Pay for Home without it"

American Express to let cardholders charge mortgage payments - May. 23, 2007

[cdelena]

Originally Posted by callsnap

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It's only a matter of time before other lenders/ card companies follow suit. The door is officially open to put the house on plastic. In your opinion, what are the implications?
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Some people will get in trouble with it and other won't. I would think the requirement for a prime loan with AMEX connections will narrow those eligible to a pretty responsible group.

I put anything I can on the credit card and let them draft the full balance from me every month for the convenience and points. My wife and I have traveled the world on points.

[jco]

Several mortgage companies already accept credit card. I'm for it. I don't have debt, and I'd rack up my cc points!

[Oregold]

Who wants more cedit card debt? No I would not want to do it. I think some people would get into trouble using credit cards to pay a mortgage. I know you can pay it that way but it's best not to.

[AussieMale]

Buying a house or getting your house loan tied to your CC like that is going to get many people in trouble , i hate to think of 27% if you make a late payment or if something goes wrong.

CC's = BIGBROTHER knowning every move you make , including the amount of time you spend in the little boys / girls room just about.

Im moving to the USA very soon , im leaving all my cards behind no more amex,visa or master for this boy anymore , its back to CASH for me from here on in , if only that was the truth , as you cant hire a car here without a CC so i guess it would be the same there.

Im gonna have to have one sooner or later after i move over there , so i will look a very basic one............. any opinions on a friendly CC would be a nice start.

Im sure the USA is just as bad as here , the more cards you have the more people know about you , after all the CC these days is an ID card i reckon.

[chaos]

Wow, welcome to the next explosion for middle class Americans. Ten years from now, most of those people- and I do say most, not all- will wonder what happened, it sounded like such a good deal.... I refuse to keep the credit card companies in business. Good luck to those of you who do.

[Scooby]

Certainly nothing I would ever consider. As a matter of fact, now that we have sold this home, another mortage is not something I will even consider. Obviously there are a few that could gain a benefit and maintain themselves doing this but I would bet the majority couldn't. I can see it now. Well, we did just take that trip to Hawaii and made the boat and Harley payment so lets just put the house payment on the credit card this month. This allows and encourages for people to make bad decisions. These bad decisions are exactly why 1 in 3 or 4 (I can't remember now) homes in my area on the market are a short sale.

[Humanoid]

I would bet most the people that use this are flippers trying to buy a few more months thinking that the market will improve and they'll be able to sell their overpriced junk.

[John23]

Originally Posted by callsnap

It's only a matter of time before other lenders/ card companies follow suit. The door is officially open to put the house on plastic. In your opinion, what are the implications?

Here's a link to the article: "American Express - Don't Pay for Home without it"

American Express to let cardholders charge mortgage payments - May. 23, 2007

People need to learn about CASH! Stuff you put in your wallet. Cash in your bank account.

There's plenty of responsible people out there, but CC's tend to blur what money really is. The way chips disguish money at a casino. For some reason it doesn't seem quite as "real" when its on a CC.

It amazes me how CC's have taken over peoples lives. What a trade off!!

The CEO's of Capital One, AMEX, etc make tens of millions, hundreds of millions and ride around in Gulfstream jets.

On the other side of the trade are millions of people juggling payments, carrying cards with obscene fees and penalty rates, with one slip up and you're paying 27%. You get a little bit of a reward...but CC companies haven't been built on rewards points.

What a game!

[bande1102]

Something just seems really fishy about this. How exactly are the credit card companies benefiting from this? I thought that merchants who accept credit cards pay a fee to the cc company and the people who use cc pay interest for unpaid balances and/or annual fees. So why would a lender want to accept credit cards for mortgages? It looks like the only way for credit cards to make money is hope people are late and then maybe split some of that fee with the lender?

The other thing is that I would guess you can only use that credit card for the mortgage. Because what happens if you have other charges on the card in addition to the mortgage and you don't pay off the credit card in full at the end of the month. How does the credit card decide how the payment is credited? To me that is a very scary scenario and one that encourages you get to get another card to use for other credit card purchases.

Also, how many days per billing cycle? For example, my mortgage is due on the first day of each month, but some of my credit cards have billing cycles of fewer than 30 days. Are you charged interest on those few days?

There are just too many unanswered questions. IMHO, credit card biz is way too unregulated anyway. With credit card companies, you're basically taking out a loan in which the lender is able to change the terms on a whim and you really can't do anything about it. To me, that's the truly scariest part. Because what if you're late on another payment? How will that affect the credit card to which you're charging your mortgage.

Nah, I'll pass on this one.