 TITLE: How a Personal Loan Can Affect Getting a Mortgage CONTENT: Can a Personal Loan Impact My Mortgage Application?\n---------------------------------------------------\nAny debt you have listed on your credit reports can affect your ability to get a mortgage loan. There are two primary things lenders will look for with personal loans: how you've managed the debt and how it affects your debt-to-income ratio.\n### How You've Managed the Debt\nMaking on-time monthly payments is crucial with any type of debt, especially if you're planning to apply for a mortgage loan. A mortgage is a long-term commitment for both you and the financial institution, so if you've missed any payments on your personal loan, you may qualify at a higher rate or not at all.\nIf you've managed to pay all your bills on time, however, this may have improved your credit score over time, as well as your chances to get approved for a mortgage.\n### Your Debt-to-Income Ratio\nWhen determining how much you qualify to borrow, mortgage lenders will look at your back-end debt-to-income ratio (DTI), which is your total monthly debt payments divided by your monthly gross income.\nFor reference, your front-end DTI is how much of your gross income goes toward housing costs only. If your back-end DTI ratio is very low, the personal loan payment may not make much of a difference. However, most lenders prefer a back-end DTI below 36%, and if yours is higher than that with the personal loan payment, you may not qualify for as much as you want or need. END