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Paying off balance of student loan and its effect on credit score and mortgage pre-approval

New Visitor

Paying off balance of student loan and its effect on credit score and mortgage pre-approval

I’m prepping to be preapproved for a mortgage and am getting all of my information together. Besides my normal monthly bills (no car payment or rent), I pay about $450/month in student loans.

 

My parents would like to help me with my home purchase and offered to pay off the balance of my student loans (yes, I’m very lucky!) which is about $29K. My question is, how much of an effect would this have on my mortgage preapproval? I’m assuming it would boost my credit score, which is already solid, but how significant of a difference would it make? I have no other debts.

 

I’m sure more information would help this forum provide a more accurate answer, but was just hoping to see how beneficial the elimination of student loans would be.

 

Thanks in advance for your help.

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Valued Contributor

Re: Paying off balance of student loan and its effect on credit score and mortgage pre-approval

Since you dont have any other installment loans, paying these off might actually lower your score.

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