It depends on the type of debt and how it affects your qualification. Paying off high monthly payment obligations can improve your debt-to-income ratio and increase buying power. Paying down or paying off credit cards usually improves your credit score by the next billing cycle. But paying off low-interest debt just to reduce balances isn’t always necessary. The real goal isn’t “zero debt.” The goal is “smartly structured debt that supports approval.” Sometimes keeping liquidity is more valuable than wiping out every account.
Please consult your Mortgage Advisor for guidance specific to your situation before making changes.
