Pay down Credit Card debt, to Increase Loan amount ..........

[Michael Dunn]

Good Evening

I need some help in figuring out what to do with paying off 2 credit cards, and by doing so.... Increasing the amount that I can borrow for the purchase of a property, by another $10,000  ( I came up with $10,000 , because I have heard that for each $25 that you have in monthly debt... credit card debt in my case ) , that you can borrow an extra $5,000 for each $25 monthly debt that you pay off

I have 2 cards, with fairly low amounts.... one has around $550 and the other as around $650

So with $1,200 , I could pay both of these cards off completely , which would then leave me with 2 credit cards left ( minimum payments per month on the two, total about $110 per month )

My dilemma is..... due to my income over the past few years ( via my tax returns ), and added with it ..... the Max DTI ratio for an FHA loan ( 50% max I think ? )

I need as much " House " as I can get ( qualify for ), as to get a nice enough house that is in a desirable and nice neighborhood in my area ( Memphis,TN )

Right now I got a Monthly payment " Itemized Worksheet " from my Lender, showing me, that on a $65,000 loan.... my Monthly payment ( PITI ) would be $520

I am wanting to get it, to where I can qualify for a house in the $80,000 - $85,000 price range..... using the Itemized Worksheet on a $65,000 loan and the monthly PITI being $520 ..... I'm assuming that an $85,000 loan ( house ) would put my note at right around $650 ( and $580 on a $75,000 loan )

I am basing these umbers on the fact that.... for every $10,000 that I add to the loan, that the monthly note increases by about $60

To me.... the  " cheapest " and most logical way to achieve this, seems to be for me to spend the $1,200 and pay off these 2 credit cards ?

Thank you to any and everyone for their insight, recommendation and help,

I really appreciate it