The housing charity "Shelter" claims that over a million people have used a credit card to make a mortgage payment in the last 12 months.
Shelter go on to warn that people who have used credit cards to pay their mortgages risked losing their homes, as credit card companies have to recover their debts and are not subject to the same rules as mortgage lenders.
There are a number of anomalies in Shelter's analysis:
1 Credit cards cannot be used directly to pay mortgage companies. Credit card cheques could be used, or credit cards used on other purchases thereby freeing up cash to pay the mortgage.
2 Credit card companies have no charge over the property. They are unsecured, and as such would have to apply CCJ's and other debt recovery methods to recover their debt. The end result may be the loss of a home. However, the implication that the card companies have a charge over the home is alarmist.
Its also very hard for a credit card company to get a CCJ and a lien over the house and even then they don't always have the ability to call for the sale of the house. The mortgagee can refuse I believe.
ReplyDeleteAlthough the majority of mortgage lenders won't accept credit cards to make a mortgage payment, there are a small number who will .....
ReplyDelete