It depends. Paying off debt can dramatically improve your credit score and debt-to-income ratio, both of which help you qualify for a better mortgage. But using all your savings to pay off debt could leave you without enough for closing costs or an emergency fund.
Here’s a good guideline in the Omaha market:
✔ Pay off small, high-interest debts
Especially credit cards that increase your DTI.
✔ Keep some savings available
You’ll want a financial cushion after closing.
✔ Avoid paying off large student loans right before buying
This can actually hurt your credit temporarily.
A trusted lender can run scenarios to show whether paying off debt will help or hinder your approval.
God gives us wisdom for decisions just like this.
If you’d like a personalized debt review before buying, we would be honored to help you take the next step confidently.
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