Generally, you cannot use unsecured borrowed funds — like personal loans or credit cards — for your down payment. Why? Because that increases your debt obligations and affects your ability to repay the mortgage. Some structured assistance programs or secured loans may be acceptable depending on guidelines, but they must be disclosed and properly evaluated. One of the fastest ways to derail an approval is taking out new debt during the process without discussing it first. Before borrowing anything, have a conversation. Small decisions can have large consequences in underwriting.
That being said, if you have an asset, like a car, boat or even another home, borrowing against an asset is acceptable in most cases and you could use those funds to buy a home. Always discuss this with your loan officer first.
Please consult your Mortgage Advisor for guidance specific to your situation before making changes.
