Are you both a business owner looking for financial support and also trying to get a mortgage? If so, will a business loan affect getting a mortgage? 

If you are both in need of a business loan and a mortgage, you have come to the right place.

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833-432-6968

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Loans can be difficult to understand. Yet, it is even more difficult to get approved for a loan; especially in the case of a home loan, or a mortgage. Loans typically require you to have a stable financial status and good credit score. This is to ensure lenders that you will pay your debts on time. 

This article will discuss how a business loan may or may not have an affect on your ability to get a mortgage.

Will A Business Loan Affect Getting A Mortgage?

A business loan may have an effect on applying for a home loan. It depends on your situation. We will discuss the important factors below.

First, it depends on what type of business you have. In particular, if your business is a limited company, your mortgage lender will want to know if you can handle your current essential financial commitments. 

If your home loan lender discovers that you are unable to, or have difficulties, this may adversely affect your mortgage application.

How does a Business Loan Affect a Mortgage?

Let’s explore how a business loan could affect a home loan application. It is crucial to understand some important factors first. 

First, traditional loan lenders always do a “hard inquiry” on your FICO score regardless if it is a home loan, auto loan, business loan, or any other loan. A hard inquiry occurs when a lender or company makes a request to review your credit reports as part of the loan application process.

Additionally, this process may have an impact on your score. This is because every hard inquiry is recorded in a credit report. If you are applying for both a business loan and a home loan simultaneously, it may decrease your credit score slightly. 

Fortunately it is not likely to drop significantly. To obtain approval for a mortgage application with a business loan, it is best to keep your credit score high. 

Tips on How to Keep Your Credit Score High

The bottom line is you must pay your bills and debts on time. You need to show your home loan and business loan lenders that you are not a high-risk borrower. Trust and dependability are crucial in this relationship.

They may charge you a small interest rate. And the smaller the interest, the less you pay. 

Additionally, you can apply for multiple different lenders for a home loan during a 1-week period and it will be treated as one total credit pull. This means that your credit score will drop the same amount for multiple applications as it would for one single application.

In summary, your business loan will only minimally affect your home loan application as long as you have a good credit score and that you can prove that you are not a risk for your lenders.

Call Now For A Free Reverse Mortgage Quote

833-432-6968

9am-9pm EST, Mon-Fri

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