Make a large payment toward student loans before getting pre-approved?

[Ashley Sommer]

Hi,

My husband and I are looking to get pre-approved for our first home very soon (this weekend). Our only debts are his student loans. Our combined assets outweigh his total debt (not sure if this matters).

My husband has been making his minimum monthly payments but also likes to put larger payments toward the loans to help pay them down sooner. He has saved to put about 7k down for the next large installment. My question is: should he make the extra payment or should we wait until after we've received our pre-approval. If so, should we also wait until we actually find a home and secure a real loan?

By making a larger payment we'll have less debt but I've heard that you shouldn't make large payments right before getting approved.

Any advice is appreciated! Thank you.

[Oscar Perez]

Ashley Sommer In my experience, the lender places more weight on your total household income as well as your longevity with your employer. The debt to income ratio is key. I know I'm going to get a lot of hate mail from Dave Ramsey disciples, but as long as the interest rate is low on your student loans, don’t rush to pay them off. Your cash is better spent picking up investment properties to build up your real estate portfolio. I truly believe there is a small window of opportunity here to buy properties while the housing prices and interest rates are still low.

Just my 2 cents…