Can You Pay a PennyMac Mortgage With Credit Card?

PennyMac is one of the largest mortgage lenders and servicers in the United States. With their wide range of mortgage loan products, competitive interest rates, and online account access, they have become a popular option for homeowners across the country.

When your monthly mortgage payment comes due, you have several options on how to pay your bill. Some homeowners may wonder if they can simply charge their PennyMac monthly payment to a credit card. Paying large recurring bills like a mortgage with a credit card can seem appealing, especially if your card offers generous rewards or cash back.

Can you pay a PennyMac mortgage with a credit card?

No, PennyMac does not accept direct credit card payments for mortgage loans. However, homeowners can use third-party services like Plastiq to pay their mortgage with a credit card indirectly. Plastiq charges a 2.5% processing fee and only accepts Visa, Mastercard, or Discover cards, excluding American Express.

Most large lenders and servicers do not allow direct credit card payments for mortgage loans. While this may be disappointing to credit card rewards enthusiasts, there are good reasons behind this policy. There are also alternatives that allow you to pay your mortgage with a credit card indirectly.

If you want to find out how to handle paying the mortgage with credit cards and what are your other options for making payments, keep reading.

Can You Pay Your PennyMac Mortgage With a Credit Card?

The short answer is no. PennyMac does not accept credit card payments directly for mortgage loans they service. This is standard policy among large mortgage lenders and servicers.

When you agree to the terms of your mortgage loan, the lender agrees to provide you financing at a certain interest rate and term length. That interest rate factors in certain costs and risks assumed by the lender.

If lenders allowed borrowers to pay mortgages directly with a credit card, they would have to pay transaction fees of 2-3% to the credit card networks. This would cut significantly into their profit margins on mortgages.

Lenders also want to avoid borrowers getting into deeper debt. Mortgages typically have much lower interest rates than credit cards. Allowing credit card payments would make it easier for borrowers to swap low interest debt for higher interest debt. This increases risks for lenders.

PennyMac does not allow credit card payments directly for your mortgage in order to protect their own interests as a lender while also encouraging responsible borrowing behavior.

How Do I Make a PennyMac Mortgage Payment With a Credit Card?

While you cannot pay PennyMac directly with a credit card, there are third-party services that will process mortgage payments on credit cards – for a fee.

The most popular service used for this purpose is called Plastiq. With Plastiq, you can pay any bill with a credit card – including mortgages. However, Plastiq charges a processing fee of 2.5% on all payments.

Here is how Plastiq works:

• You set up a secure account and link credit cards or bank accounts
• Add the mortgage payment as a payee, including details like your loan number
• Submit the payment to Plastiq, choosing which card to charge
• Plastiq bills that card, collects their fee, then sends the payment to PennyMac

One thing to note is that Plastiq does not allow payments from American Express cards. You are limited to using Visa, Mastercard, or Discover cards to pay PennyMac through their system.

So in summary – yes, you can effectively pay your PennyMac mortgage with a credit card by using a third-party bill pay service like Plastiq. But the convenience will cost you an extra 2.5% fee on top of your payment amount.

What Are the Fees Associated With Making a PennyMac Mortgage Payment With a Credit Card?

As mentioned above, services like Plastiq charge a 2.5% processing fee to pay bills through their system on a credit card.

This means if your monthly mortgage payment to PennyMac is $2,000, you would pay:

• $2,000 mortgage payment
• $50 processing fee to Plastiq
• $2,050 total charge on your credit card

You should also consider that by putting your mortgage payment on a credit card, you are paying interest on that purchase to your credit card company. This is in addition to the interest you pay on your mortgage loan itself.

The average credit card interest rate is around 15% – much higher than most mortgage rates. So you are essentially paying more interest in order to earn credit card rewards. Depending on your mortgage balance and credit card APR, that additional interest could add up quickly and outweigh any rewards you earn.

Finally, some credit card networks like American Express charge higher transaction fees. Those fees may be passed down by Plastiq resulting in an even higher processing fee. The exact fee depends on the card you use.

What Are the Pros of Paying Your Mortgage With a Credit Card?

While it requires paying processing fees, there are some potential advantages to paying a PennyMac mortgage with a credit card:

Earn rewards & bonuses – Many credit cards offer generous sign-up bonuses and rewards points or cashback on purchases. Paying a large recurring bill like a mortgage with a card can help you earn rewards faster.

Avoid late fees – If you are in a tight spot some months and don’t have the cash to pay your mortgage, charging it allows you to avoid potential late fees or hits to your credit score.

Improve credit utilization – Putting your mortgage on a credit card and immediately paying off the balance can help decrease your overall credit utilization, which can boost your scores.

More time to pay – You don’t have to pay your credit card bill in full for up to 30 days depending on your billing cycle. This gives you a bit more float time vs paying the mortgage directly.

Convenience – For frequent travelers or those juggling multiple bills, charging the mortgage monthly may be more convenient than remembering to log in and pay directly.

What Are the Cons of Paying Your Mortgage With a Credit Card?

While the pros above may seem enticing, there are also some significant drawbacks and risks to consider with paying PennyMac via credit card:

High fees – The 2.5% processing fee from Plastiq really cuts into any rewards earned, since it applies to the entire mortgage payment.

Credit card interest – Unless you pay off the balance immediately, credit card interest rates of ~15% APR or higher quickly outweigh any rewards.

Credit limit – Most mortgages exceed the credit limit on a single card, so you’d have to divide the payment across multiple cards.

Rewards limitations – Certain cards limit the rewards earned on third-party processed payments like Plastiq.

Balance complications – If paying your mortgage via credit card routinely pushes your cards to their limit, it can negatively impact your credit scores.

Limited grace period – Avoiding mortgage late fees comes with paying higher credit card interest.

Tax deductibility – Mortgage interest is tax deductible in some cases, but credit card interest is not.

Why Won’t Lenders Accept a Direct Credit Card Payment?

If your mortgage lender were to accept direct credit card payments, they would expose themselves to various transaction fees from the credit card company. Obviously, this doesn’t make sense to them. Plus, this would mean that the lender is letting the customer swap a low-interest debt for another that’s high-interest and isn’t tax-deductible (while the mortgage is tax-deductible).

How to Decide If You Should Pay Your Mortgage with a Credit Card?

As we all know, credit cards come with certain benefits and rewards, but there are some disadvantages to them as well. If you’re in a bit of trouble and you went as far as to wonder if a mortgage could expire, paying with a credit card can be the way to solve your problems.

Instead of considering whether you can mortgage a foreclosure, don’t forget that the mortgage is a lien, so you can lose your house if you don’t make payments. Credit card payments have both pros and cons in this situation, so here’s what you need to know.

What Are Some Alternatives to Paying Your Mortgage With a Credit Card?

Given the high fees and risks involved, what are some better options for paying your PennyMac mortgage each month?

1. Direct Debit

The easiest and most popular option is to set up automatic monthly payments directly from your bank account via ACH direct debit. PennyMac offers this option through their AutoPay system. It withdraws your payment on the same date each month.

2. Bank Transfer

You can manually make one-off mortgage payments via your bank’s online bill pay system or by directly transferring from your bank account to PennyMac. Transfers typically arrive within a few business days.

3. Check Payment

Mail a physical check payable to PennyMac each month. Be sure to include your loan number and send it a few days before your due date to ensure on-time arrival.

4. Money Order

Money orders allow you to pay with guaranteed funds if you don’t have a bank account. Take a personal check to the post office or other outlet to purchase a money order made out to PennyMac.

5. Cash Payment

PennyMac allows cash payments at select retail partners like CVS, Walmart, 7-Eleven, etc. You will need a payment code from PennyMac to provide along with the cash. This ensures it is credited properly.

How to Decide if You Should Pay Your Mortgage With a Credit Card

Here are some key questions to consider when deciding if it makes sense to pay your PennyMac mortgage with a credit card:

• How much are the credit card processing fees relative to my payment amount?
• What is the interest rate on my mortgage versus potential credit cards used?
• How much available credit do I have to cover the mortgage payment?
• Will charging the payment cause me to exceed 30% overall credit utilization?
• Will I earn enough rewards to offset the additional fees and interest incurred?
• Can I pay off the credit card statement balance in full each month to avoid interest charges?
• Would charging the mortgage interfere with any card signup bonuses I’m trying to earn?

For most homeowners, the fees, risks, and complications outweigh the benefits of paying a PennyMac mortgage with a credit card. But in certain situations where you can fully pay off the credit card charge each month, need extra time to make a payment, or valueSUB rewards highly, it can make sense as an occasional option. Just be sure to run the numbers in your specific situation.

Is Pennymac Legit?

PennyMac is a publicly listed direct mortgage company that provides a variety of lending choices, including loans with minimal down payments and refinancing. They are among the largest lenders in the country, providing a large variety of different home loans to people in all states, except New York.

Although this lender has physical sales offices, loan applications can only be submitted by phone or online. The moment you are approved, you will be teamed up with a loan officer that will be your single contact all the way through underwriting and the closing process. This process can take up to 45 to 60 days. However, it can take less, if you are using PennyMac’s Mortgage Access Center, which is their online portal.

But does PennyMac accept credit card payments? Although you are not able to make a PennyMac mortgage payment with your card, there are other benefits to using their services. This lender periodically makes special offers, and these offers are aimed to help borrowers who are in need of a loan modification or facing hardship in any other way.

Conclusion

Paying mortgage installments with credit cards can sometimes be helpful, but we’ve established that it isn’t the go-to solution for making payments. Still, if you find yourself in a situation where you have to use third-party processors to pay your mortgage, it’s best if you know something about them. Do your research – the more you know, the better.

And don’t give up on considering PennyMac as your lender – although it’s not possible to make a PennyMac payment using your credit card, there are still many benefits to take into account.

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