From the answers to these frequently asked questions, learn more about how personal loans and mortgages can mix.
Can a personal loan help me get a mortgage?
A personal loan can negatively or positively affect your credit score and therefore impact mortgage loan approval. If you manage your repayment well and make on-time payments or even pay off your loan early, you could improve your credit score and make it easier to secure a mortgage loan.
Does having a car loan affect buying a house?
If you’re wondering whether buying a car will affect buying a house or refinancing, the answer is yes. Unless you’re paying all cash for your car, that new car loan will show up on your credit report. And when mortgage lenders check your back-end DTI, that new car loan will drive up your ratio and potentially impact your ability to get a new home loan or one with a better interest rate.
Does a personal loan affect my credit score?
A personal loan will affect your credit score. If you’re regularly making on-time monthly payments, that will have a positive impact on your credit score. But if you’re missing monthly payments or your current balance is near the maximum amount of your loan, that could hurt your overall credit score.
Can I use a personal loan instead of a mortgage?
Since personal loans have lower loan amount limits than mortgages, it will likely be difficult to finance the entire purchase of a home with this type of financing. You also probably won’t be able to use a personal loan for your down payment since most lenders prohibit this practice. However, you may be able to use a personal loan to fund a housing alternative, such as a camper van or school bus conversion.
