Can You Have A Personal Loan And A Mortgage

You can use a personal loan to pay off your mortgage but this may not.

Can you have a personal loan and a mortgage. Personal loans are not typically used to pay for a house. If you re planning to buy a home in the next few years applying for a personal loan could potentially reduce how much you can borrow for a home and could also affect your credit depending on how you manage the debt. A mortgage is the largest debt many people have and failing to pay your mortgage can cause your home to go into foreclosure.

In theory you could get a personal loan put the cash in a high yielding savings account and later use it to pay for the down payment on a mortgage. However there may be some exceptions in certain situations where it s not only possible but it may be a better option than a mortgage loan. A personal loan is unsecured whereas a mortgage uses your house as collateral if you default on a mortgage you could lose your home.

Buying a house with a personal loan if you re buying a standard single family home getting a mortgage is your best bet. There are two major differences between personal loans and mortgages. Conventional and fha mortgages prohibit the use of personal loans as a source for down payments.

Even if you can find a lender that will allow you to use a personal loan it is unlikely to be your best option for a down payment.