As the current economic situation is taking a toll on the US citizens, people are not getting the chance of repaying their home mortgage loan with their own funds. Most of them are looking for ways through which they can repay their loan without taking much stress on their present finances. When a homeowner is too much worried about his monthly obligations, he takes resort to his plastics in order to make life easier. However, this is not at all recommended by the financial experts it can heavily take a toll on your finances. This is the reason why it is said that a person must consider how much can I afford to pay for a house before taking out a home loan so that he doesn’t fall in danger. Though there are various credit card companies that have introduced programs that allow them to repay their home loan with their card, it is always better not to opt for this option.
Some important questions to consider before using your cards to make the mortgage payments Even though paying back your mortgage balance with your credit cards may seem to be an appealing process, you must still ask yourself some important questions.
1. Do I have the ability to repay my balances in full? The first and the most important question is whether you have the ability or rather the financial ability to repay your debts in full every month. On high-cost items like mortgage loans, the interest rates will always accumulate and this can make repayments costlier for you. Though the interest rates that you pay for your mortgage loans are tax-deductible, yet the credit card interest rates are not. Carrying a balance from one month to another will have a dear impact later on.
2. Will this entire process hit my credit score? Whenever you think of repaying your mortgage payments with credit cards, you must always consider the impact on your credit score. Only when your credit limit is not enough and after you add your mortgage payments to your credit card, it consumes half of your limit, which can hurt your credit score.
3. Am I timely while paying the credit card bills? You must always make sure that you repay all debt obligations on time so that you don’t incur late fees and penalties in the long run. On credit cards, a single late payment can cost you dearly.
Even after you get positive answers to the questions mentioned above, you must try your best to avoid repaying your mortgage with credit cards. It is always better to consider ‘how much can I afford to pay for a house’ before taking out a loan so that such a situation does not arise when you need to take the help of your credit card. You must also manage your personal finances and make payments on time.
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