American Express will now be able to take advantage of a special program that has never been offered to credit card holders before – they will be able to make mortgage payments with their credit card.
The new program is the result of an agreement between American Express and American Home Mortgage Corporation. American Express representatives are excited about the agreement, having referred to it as “a significant first for the credit card industry” in a press release earlier this week. American Home Mortgage Corp is equally as pleased, having said “[the] American Express card member represents a very attractive customer segment for American Home Mortgage as we continue to grow our direct-to-consumer business channel.”
From American Home Mortgage Corporation’s perspective, the move should help to make them better capable of reaching the segment of the market that is highly affluent, targeting those looking for the convenience a credit card offers rather than those trying to float by without making their mortgage payments. In fact, in order to participate in the program, cardholders will have to pay an initial fee of $395 to American Home Mortgage during closing. New loans as well as refinanced prime loans are both eligible for the program.
The hope is that cardholders will recognize this service as one that is both convenient and secure as it will mean homeowners will not have to write a check to pay their house payment. In addition, homeowners won’t have to worry about remembering the due date of their payment.
Cardholders enjoy additional benefits with the new agreement as well. For example, they can earn reward points when paying their mortgage. These points can then be redeemed for travel, consumer products, and housewares.
American Express is currently working on developing similar programs with other lending institutions. In fact, IndyMac BankCorp in Pasadena, California is slated to launch a similar program with American Express later this year.
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