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Both apartments and condominiums share quite a number of traits but differ in ownership. Apartments are often found in large residential complexes owned by a company. These complexes are often operated by professional property managers. Condos are also usually located in large residential complexes, but each condo unit is typically owned by an individual owner.

If you’re browsing the market for a rental, you’ve likely encountered a dazzling array of condos and apartments, and you might rent either type of property. The question of condo vs. apartment gets more complex if you’re debating whether to buy a condo or rent an apartment.

What Is a Condo?

A condo is a residential unit within a collective living community, where each individual condo is owned by a private owner, but the cost of maintaining communal areas is shared by all owners. While condos are often located in high-rise buildings, they can also take the form of a collection of standalone properties, each designated a “condo unit.”

One benefit to renting a condo is that you can deal directly with your landlord rather than a management office, which may mean more personalized attention for your needs.

For buyers, the purchase price for a condo can be significantly lower than the cost of most single-family homes.


💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.

What Is an Apartment?

An apartment is a rental unit within a building, complex, or community. Often, an apartment complex is managed by a property management company, which serves as both landlord and leasing agent for all of the units on the premises. In big cities, “apartment” is sometimes used as shorthand for a condo or co-op unit. If you’re choosing between a co-op and a condo to rent or buy, you’ll want to know how they differ, and whether you’re ready to buy an apartment.

Rental apartments may be located in high-rises but can also be found in larger homes that have been subdivided into separate units.

Renting an apartment offers greater mobility than buying a property, which makes it a flexible option if you’re only planning on staying in an area for a couple of years. A full-time management office or private landlord takes care of leasing, rent payments, and repairs.

Where They Differ

Now that we’ve covered the condo vs. apartment basics, let’s dive deeper into some key dimensions in where they differ.

Ownership

Each unit in a condo development is usually owned by a private homeowner. Unless the condo owner retains the services of a property manager, prospective renters can expect to deal with the condo owner directly when it comes to rental applications, monthly rent payments, and any maintenance issues that arise over the course of their lease.

Apartments are often managed by a property management company that may also own the apartment complex. Effectively, this makes the company the landlord for the entire property. Prospective apartment tenants will usually submit their application and rent payments through the apartment leasing office, while full-time maintenance staffers are on call to deal with any repairs. Of course, some apartments are in smaller buildings owned by individuals. In that case, a renter might deal directly with the property owner just as a renter in a condo does.

In either case, landlords may be amenable to your desire to negotiate rent in order to take you on or keep you. Paring the rent is the main goal in such a negotiation, but you can always ask for other benefits in lieu of a rent reduction.

Property Taxes

Renters aren’t responsible for paying property taxes, making them a non-issue in the apartment vs. condo choice. However, if you’re deciding whether to purchase a condo, understand that you’re responsible for paying property taxes for your unit every year. If you decide to rent your condo out, you should also expect to be taxed on any rental income you collect.

Design

Regardless of structure type, condo owners retain the right to make cosmetic adjustments to the interior of their properties. So if you’re interested in renting in a particular condo complex and you don’t like the design choices an owner has made, consider looking at other units that are available for rent — you may find a very different look and feel in another unit. Apartments within a rental complex, in contrast, typically share similar, if not identical, layouts and designs regardless of which unit you choose.

Amenities

The amenities of both apartments and condos vary widely and often depend on when and how they were built. Generally speaking, condos are more likely to offer customized amenities, like state-of-the-art appliances and granite countertops, that reflect the tastes and habits of their owners.

Fees

Apartments and condos of similar quality and in the same area should rent for around the same cost. Both condos and apartments often charge the following fees:

•   Application fee

•   First and last month’s rent

•   Security deposit

•   Credit and background check fee

•   Pet fees and deposit

•   Parking fee

Renters may find that condo owners are more willing to negotiate on things like fees than apartment management teams, as these are private owners trying to keep their units rented out for income purposes.

Buying a condo will mean paying monthly maintenance fees that cover insurance for and upkeep of common areas, water and sewer charges, garbage and recycling collection, condo management services, and contributions to a reserve account.

Community

Condos usually have a greater sense of community than apartment complexes, given that their residents are likely to stay around longer. In many cases, residents consist of the condo owners themselves.

By contrast, renters living in apartments often intend to stay for only a couple of years. While that’s not to say that there aren’t occasional resident get-togethers at some apartment complexes, you’re less likely to encounter the same faces over several months.

If you’re renting a condo, expect to abide by rules set by the homeowners association. These can sometimes be fairly strict. Apartments have their own set of rules that may be less stringent.

Renting and Financing

Renting an apartment involves one monthly rent payment, in addition to any utilities you’re responsible for. Of course, when you leave the apartment, you leave with just your security deposit, assuming all payments have been made and no damage has been done.

Financing a condo and purchasing the property allows you to lock in your monthly mortgage payments at a steady long-term rate and gives you the chance to start building equity. In exchange, you’ll be required to make a down payment and be responsible for any taxes, insurance, and maintenance fees, among other costs.

Deciding whether it’s better to buy a condo or to rent — or to get a house or condo — is a complicated decision that depends on your personal finances and your lifestyle. If you’re thinking about settling down, have a stable job with steady income, and have enough saved up for a down payment with an emergency fund to spare, buying a condo or house may be the right choice for you. However, if you’re still exploring the area or have variable income with limited savings, it may be best to continue renting. For those trying to decide between renting an apartment and financing a condo or house, a mortgage help center can help provide answers.


💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.

Maintenance

Most apartment complexes have an on-site building supervisor who can address maintenance issues. Given that the owner of a large apartment complex oversees all of the units, they’re incentivized to employ someone full time to attend to the day-to-day affairs. This often means that apartment owners can react faster than condo owners, who sometimes don’t even live on the premises.

By contrast, condo units are usually owned by landlords, and most of them hire a third-party contractor to come in and make repairs as necessary. In some cases, condo owners may be handy and handle the repairs on their own.

If you buy a condo, you’ll have a regular maintenance fee that covers the shared parts of the property, but because condo owners typically own just the interior of their unit, any repairs in the condo unit will be separate. (It’s a good idea to pore over the covenants, conditions, and restrictions to see exactly what is part of your unit or part of the common elements.)

Condominium vs Apartment: A Side-by-Side Comparison

To help sum it all up, here’s a quick guide to the condo and apartment traits discussed above.

	Condo	Apartment
Ownership	Private owner	Property management company, if a large complex; private owner if a smaller building
Property taxes	Paid by condo owner	Paid by building owner
Design	Customized by owner	Uniform across all units
Fees	First and last month’s rent Security deposit Credit and background check	Application fee First and last month’s rent Security deposit Pet fees
Community	Typically condo owners and long-term residents	Typically shorter-term renters
Renting & Financing	Condo renters: Monthly rent Utilities Condo owners: Mortgage payment Utilities Property taxes Maintenance fees Property insurance	Monthly rent Utilities Renter’s insurance
Maintenance	Private owner hires third-party contractors for repairs and maintenance	On-site maintenance staff

Condo vs Apartment: Which One May Be Right for You?

Whether a condo or apartment is right for you depends on your preferred rental experience. If you’re looking for something that feels a little more akin to home and don’t mind dealing directly with your landlord when discussing repairs and rent payments, a condo (or an apartment in a small privately owned apartment building) may be the better option for you.

On the other hand, if you prefer dealing with a full-time staff of property managers, want something more structured, and don’t mind cookie-cutter corporate apartments, an apartment may be the better rental option for you.

Prospective condo buyers will want to keep their finances and monthly budget in mind when deciding if they want to rent or buy. While the idea of building equity is appealing, settling down and committing to a mortgage isn’t for everyone. You’ll want to thoughtfully evaluate your ability to make monthly payments and whether you want to stick around an area.

The Takeaway

In the condo vs. apartment comparison, you’ll pay similar costs when renting properties of similar quality. Things get more complex if you’re debating whether to buy a condo or rent an apartment, as there are myriad added costs for condo owners in exchange for the chance to build equity.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Why are condos more expensive than apartments?

In general, condos and apartments of comparable quality cost around the same amount to rent. A condo owner, however, will likely face higher monthly costs than an apartment renter, thanks to the added costs that come with owning a property, including mortgage payments, taxes, insurance, and maintenance fees. Over time, the added expense may be offset by the equity built through mortgage payments.

Which retains more value, condos or apartments?

Over the long run, both a condo and an apartment in a co-op building can lose or gain value. Whether your specific property appreciates will depend on local market factors and on upkeep of your unit as well as of the larger complex.

Can I get a loan to buy a condo or co-op apartment?

A qualified buyer can finance a condo with a government-backed or conventional mortgage loan. Getting a loan for buying into a housing cooperative can be more difficult. The buyer is purchasing shares that give them the right to live in the unit — personal property, not real property. That’s one reason that some lenders do not offer financing for co-ops.

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Photo credit: iStock/Michael Vi

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Saving up enough money for a down payment on your first home is a major life goal. But sometimes it feels like the goalpost is always moving. How much do you need to save for a down payment, exactly? Friends say they put down 10%. Your parents talk about a 20% benchmark. And some programs allow borrowers to put down just 3%.

Bottom line: There are traditional numbers that many people stand by, but these days, the old guidelines don’t always apply. And that’s a good thing, given that at the end of 2023, the median home listing price in the U.S. was $384,683, according to Zillow. Twenty percent of that —almost $70,000 — is a substantial chunk of change for most people.

This article will demystify how different down payment amounts can impact your mortgage choices and help you better identify the home mortgage loan that bests fit your financial scenario to put you on the road to owning your own home.

Why Does a 20% Down Payment Seem like the Magic Number?

If you’re thinking about buying your first home, you’ve likely heard that a 20% down payment has traditionally been the standard. Generally speaking, putting down this much on your new home helps lenders view you as a less risky borrower, which may ultimately help you get a better deal on your loan terms.

In addition, having this significant chunk of equity in the home allows for value fluctuations and the borrower is less likely to find themselves underwater or upside down on their mortgage in a declining market.

Plus, with a 20% down payment, you won’t have to buy private mortgage insurance (PMI). PMI protects the lender in case of loan default but it can cost anywhere from 0.140% to 2.33% of your total loan amount annually depending upon many factors. (Don’t confuse PMI with MIP, which is the Mortgage Insurance Premium required by the Federal Housing Administration on its FHA loans.)

And then there’s the most obvious perk of a 20% down payment: Putting more money down up front means that you’ll owe less, which normally equates to lower monthly mortgage payments and less interest charged over the life of the loan.

But let’s face it: Even if you’re making a decent — heck, a pretty awesome — salary, saving up 20% of the total cost of a home can be difficult, especially if you’re paying rent, juggling student loans, and trying to reach other long-term goals, including saving for retirement. That’s likely why many buyers put down less than 20%. In the 2023 National Association of Realtors® Profile of Home Buyers and Sellers report, first-time homebuyers financed an average of 92% of their home’s cost and repeat buyers financed 81% of the purchase price.

There may be some very valid reasons why it would be beneficial for you to put down less than 20% on your dream house. Again, it will depend on your exact financial circumstances and long term goals, but it could be worth considering the following:


💡 Quick Tip: SoFi’s Lock and Look ⁺ feature allows you to lock in a low mortgage financing rate for 90 days while you search for the perfect place to call home.

Preserving Your Nest Egg

Putting 20% down on a home might force you to rely heavily on funds you’ve worked hard to save, and liquidating these funds, even for an investment like a home, may not always be in your best interest.

Allocating a big chunk of change to a house before you’ve covered your other important life expenses — such as an emergency fund equal to at least three months of expenses — may not be the most prudent option for you in the long run. (You’ll also want to make sure you keep in reserve funds for closing costs and any moving expenses and furnishing expenses associated with purchasing a home.)

And then there’s retirement savings: You may be able to borrow money to pay for school, to buy a new car, and to buy a home, but you definitely can’t borrow money to pay for your retirement. So you may want to consider alternatives before you dip too deeply into your retirement savings.

While you can withdraw qualified funds up to $10,000 from a traditional or Roth IRA without penalty to buy your first home, there are still taxes to consider. With a traditional IRA, you have to pay taxes on the amount you withdraw, but with a Roth IRA, no taxes will be due if you’ve had the account for at least five years. Taking the $10,000 could help you in the long run, especially if you expect income boosts as you make strides in your career.

If you are considering putting other financial goals on hold in order to buy your home, it might make sense to take a step back and look at your overall financial profile. This could help you see what makes the most sense for your circumstances. Our in-depth first-time homebuyer guide extensively covers such topics.

Protecting Your Other Big Financial Goals

By putting less money down on your home, you’ll likely be able to make more headway on other short-term financial goals, such as paying off student loans and credit cards, as well as your long-term goals, such as saving up for retirement.

You may also be able to invest more, which could help you grow your hard-earned cash. If you have other important financial goals that need achieving, you may want to consider waiting until you’ve reached them before buying a home, or you could choose to put less money down so that you don’t have to abandon your other financial objectives.

Exploring Your Down Payment Options

If you’re considering putting down less than 20%, it is a good idea to try plugging different down payment amounts into a home affordability calculator to see how they affect your monthly payments. Also take a look at your monthly income vs. your ongoing monthly expenses — which could include car payments, insurance premiums, credit card bills, and any other debts.

Mortgage lenders, whether banks or mortgage brokers, are required to figure out a borrower’s ability to repay the loan before making it. So you can also get prequalified for a home loan in order to see what type of interest rate and borrowing power a lender might feel you qualify for based on your income, expenses, and estimated down payment.


💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as low as 3.5%.1

The Right Down Payment Percentage is Personal

Everyone’s financial picture looks different, so if you find yourself in a situation where you can’t afford to put down a full 20% but still want to purchase a home, there are numerous options. If you’ve done your homework and gotten prequalified, you know how your down payment might affect your loan terms. You can also look into whether or not you are eligible for a VA loan, backed by the U.S. Department of Veterans Affairs, which allows for 100% financing? Or perhaps you qualify as a first-time homebuyer, which may allow for as little as 3% down? (You might be surprised to learn that if you haven’t owned a primary residence in the last three years, you are considered a first-time homebuyer.)

An FHA loan could also be an option. Borrowers with FICO® credit scores of 580 or more may qualify for a down payment of 3.5%. You will have to pay the FHA mortgage insurance premium (MIP), mentioned above, but it could be worth it, especially if putting down a smaller down payment allows you to get in the housing market instead of paying high rent, or own in a place where home prices seem to be on an upward trajectory.

The Takeaway

When searching for the perfect home, you’ll want to shop around in order to find your best fit — there’s no one size fits all. The same is true of your down payment percentage. But rest assured, although a 20% down payment might be tradition, it’s hardly a loan requirement, and there are many home loans that will allow you to put down less than 20% — and many financial circumstances in which a lower down payment amount is the right choice.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

⁺Lock and Look program: Terms and conditions apply. Applies to conventional purchase loans only. Rate will lock for 91 calendar days at the time of preapproval. An executed purchase contract is required within 60 days of your initial rate lock. If current market pricing improves by 0.25 percentage points or more from the original locked rate, you may request your loan officer to review your loan application to determine if you qualify for a one-time float down. SoFi reserves the right to change or terminate this offer at any time with or without notice to you.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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When you apply for a mortgage, any outstanding debts you have — including personal loans, credit cards, and auto loans — can impact how much of a mortgage you can get, and whether you even qualify in the first place.

If you’re planning to buy a home in the next couple of years, applying for a personal loan could potentially reduce how much you can borrow. A personal loan can also affect your credit — this impact could be positive or negative depending on how you manage the loan.

Whether you’re thinking about getting a personal loan or currently paying one off, here’s what you need to know about how personal loans interact with mortgages.

How Do Personal Loans Work?

A personal loan is a lump sum of money borrowed from a bank, credit union, or online lender that you pay back in fixed monthly payments, or installments. Unlike mortgages and auto loans, personal loans are typically unsecured, meaning there’s no collateral (an asset that a borrower pledges as security for a loan) required.

Lenders typically offer loans from $1,000 to $50,000, and this money can be used for virtually any purpose. Common uses for personal loans include:

•   Debt consolidation

•   Home improvement projects

•   Emergencies

•   Medical bills

•   Refinancing an existing loan

•   Weddings

•   Vacations

Personal loans usually have fixed interest rates, so the monthly payment is the same for the term of the loan, which can range from two to seven years. On-time loan payments can help build your credit score, but missed payments can hurt it.


💡 Quick Tip: Some lenders can release funds as quickly as the same day your loan is approved. SoFi personal loans offer same-day funding for qualified borrowers.

Can Personal Loans Affect Mortgage Applications?

Yes, getting a personal loan could impact a future mortgage application. When you apply for a mortgage, the lender will look at your full financial picture. That picture includes your credit history (how well you’ve managed debt in the past), how much debt you currently have (including personal loans, credit cards, and other debt), your income, and credit score.

Depending on your financial situation, getting a personal before you buy a house could have a positive or negative impact on a mortgage application. Here’s a closer look.

Negative Effects

A personal loan could have a negative impact on your mortgage application if the loan payments are high in relation to your income. A lender may worry that you don’t have enough wiggle room to cover your current expenses and debts, plus a mortgage payment.

A personal loan also impacts your credit score. If you’ve missed payments or paid late, this impact could be negative. A lower credit score can make it more difficult to get a mortgage, especially one with a competitive interest rate.

Positive Effects

If you have a personal loan that is a reasonable size (relative to your income), your personal loan payment history shows that you regularly pay on time, and you’re consistently paying down any other debts, a mortgage lender could see that as a positive indicator that you’d likely be a low-risk investment.

How Personal Loans Can Affect Getting a Mortgage

Here’s a closer look at the ways in which getting a personal loan can affect your ability to get a home mortgage.

Credit Score

Your credit score is one indication to a lender of how likely you are to be to repay a loan — or, in other words, how much risk your represent to the lender. A personal loan can affect your credit score in several different ways. These include:

Payment History

Your bill-paying track record has the most weight when it comes to your credit score. That means if you make regular, on-time payments on a personal loan, it could have a positive impact on your credit. That, in turn, could have a positive impact when applying for a mortgage.

Not making regular, on-time payments on your personal loan, on the other hand, can negatively impact your credit, leaving you with higher-rate interest rate options on a mortgage.

New Credit

When you apply for a personal loan, the lender will run a hard credit inquiry. This type of credit check can have a small negative impact on your credit for 12 to 24 months. As a result, applying for a personal loan (or any type of new credit) can negatively impact your credit score in the short term.

Credit Mix

Having a variety of different account types can be good for your credit. If your credit report only has revolving accounts, like credit cards, getting a personal loan (which is a type of installment credit) could diversify your credit mix and have a positive influence on your credit score.

Debt-to-Income Ratio

Your debt-to-income (DTI) ratio refers to the total amount of debt you carry each month compared to your total monthly income. Your DTI ratio doesn’t directly impact your credit score, but it’s an additional factor lenders may consider when deciding whether to approve you for a new credit account, such as a mortgage. Having a personal loan will increase your debt load and, in turn, your DTI ratio.

To calculate your DTI ratio, you add up all your monthly debt payments and divide them by your gross monthly income (that’s your income before taxes and other deductions are taken out). Next, convert your DTI ratio from a decimal to a percentage by multiplying it by 100.

In general, the highest DTI ratio you can have and still get qualified for a mortgage is 43% (including the mortgage payment). However, lenders prefer a DTI ratio lower than 36%, with no more than 28% of that debt going towards mortgage payments.

Recommended: First-Time Home Buyer Guide

Should You Pay Off Your Personal Loan Before Applying for a Mortgage?

If you already have a personal loan, are close to the end of your repayment term, and can afford to pay off the remainder before applying, eliminating the debt could improve your chances of getting the mortgage amount you’re looking for.

Another reason why you may want to pay off your personal loan before buying a home is that home ownership generally comes with a lot of additional expenses. Not having a personal loan payment to make each month can free up cash you may need for other things, like mortgage payments, homeowners insurance, and more.

That said, if paying off a personal loan will use up money you had earmarked for a downpayment on a home or leave you cash poor (with no emergency fund), it might be better to keep making your monthly payments, rather than pay off your personal loan early.


💡 Quick Tip: If you’ve got high-interest credit card debt, a personal loan is one way to get control of it. But you’ll want to make sure the loan’s interest rate is much lower than the credit cards’ rates — and that you can make the monthly payments.

Tips To Help Your Mortgage Application

Generally speaking, having a personal loan won’t make or break your odds of getting a mortgage. If you’re concerned about being approved, however, here are some steps that can help.

•   Review your credit report and correcting any errors or any discrepancies.

•   Consider paying down debt to lower your DTI ratio.

•   Avoid applying for new credit leading up to your mortgage application.

•   Consider taking some time to increase your down payment amount (the more you can put down, the less risk you pose to a lender).

•   Research and compare lenders and their products, rates, and terms before deciding who you’ll work with.

•   Lock in your interest rate when you get an offer that works for your financial situation.

Recommended: 5 Tips for Finding a Mortgage Lender

The Takeaway

A personal loan can have a negative or positive impact on your mortgage application. If you’re not planning to apply for a mortgage right away, and can comfortably manage the personal loan payments (and possibly even pay off the loan early), getting a personal could have a positive effect on your credit and make it easier to get a mortgage.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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Photo credit: iStock/kate_sept2004

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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