A mortgage lender will look at your entire financial picture, including credit score, current debts, credit utilization ratio and debt-to-income ratio.
Lenders place limits on overall debt-to-income ratio. Too much existing debt might not leave room in your budget for a mortgage and other home-related expenses.
Paying off debt, or consolidating or transferring balances, could help you get a bigger mortgage.
However, a substantial down payment could get you a low mortgage interest rate and help you avoid private mortgage insurance.
Consider your current interest rates. If they’re high, pay off existing debts. If you have low interest rates, make a large down payment on a house.