Will a personal loan hurt my chances of getting a mortgage?

DTI is the mortgage underwriter's primary tool for affordability. DTI = total monthly debt payments / gross monthly income. The personal loan payment gets added to your existing monthly obligations (car, student loans, credit card minimums) when calculating your mortgage DTI.

The math: If you earn $6,000/month and have $1,000 in existing debt payments plus a $300/month new personal loan, your DTI before the mortgage payment is already 21.7%. A lender limiting back-end DTI to 43% gives you $580/month for a mortgage. At 7%, that's roughly a $87,000 mortgage. Without the personal loan, you'd have $880 for mortgage payment, supporting about $132,000 more in loan.

Best practice: If you're planning to buy a home in the next 6-12 months, take the personal loan after the mortgage closes, not before. The mortgage application is a snapshot of your debt at that moment.

Hard inquiry timing: A personal loan application creates a hard inquiry. Multiple inquiries for different credit products are not rate-shopped together the way mortgage inquiries are. A recent personal loan inquiry can itself signal financial stress to a mortgage underwriter.