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Pocahontaz84

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Would it hurt my chance of mortgage approval if i applied for a separate down-payment loan

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YES

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That type of thing caused the 2006-2009 housing crash!  The banks will look very closely at your finances for the past 6 months to a year, and if they see any major loan in that time will dig into exactly what it was for, if they feel it was for the down payment then it will exclude you from any/most loans due to new borrowing laws to prevent another crash, as far as I know.  About the only way to avoid a down payment now is with a VA loan, or a gift from family (max 13k). FHA loans can require very little down with some of their assistence programs.

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Nomadre

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It still might be done, but you would have to have excelent credit rating, and debt to income ratio.  As it applies against both of those things and in most cases a 20k loan really kills both D/I and credit utililization thereby your credit score for a home loan.

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Yes. Do not apply for anything, or make changes to accounts within 4 to 6 monthsbefore applying for any type of mortgage loan. Preferably 6 months.

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