Revolving debt, preparing for mortgage loan

[Anonymous]

All glory to god for this forum as it has educated me so much in this home-buying process. I have a few credit cards, a car loan and a student loan. I am in the process of purchasing a new construction build with my husband and anticipate on closing in about 6-8 months. We were pre-approved with a 5/1 arm bank statement only program. Here's where I would like some advice & guidance. I have some revolving credit cards, a car loan & student loan. Husband has two car loans, and two credit cards. I thought that it would be beneficial to our loan if I paid off all my credit cards by the time it was closing, however by doing my research, it determines the complete opposite. So I am hoping to ask, if you recommend that I should slow down on paying my credit cards (since I'm making higher than minimum payments now) to avoid my credit score from dropping or what would you do in our situation? (Please keep in mind, we probably cannot budge when it comes to our car loan & student loan -- would rather put the difference in our reserve for mortgage) 

My current debt: (Credit score: 743)

Citi: $2,541 (51% uti)

Chase: $1950 (12% uti)

Discover: $1,209 (13% uti)

Capitol One; $1150 (21% uti) 

Car Loan (I am co-signer) $505 monthly, $26,702 remaining

Student loan: $196 payments, $27,028 remaining

Husband's debt: (Credit score: 732)

Chase: $10,920 (52% uti)

Car loan: $1,299 monthly, $67,263 remaining

Car loan 2: $550 monthly, $17,564 remaining

[ShanetheMortgageMan]

It may not make a difference to your loan if you pay off debt or not.  Since you have been pre-approved, please ask your loan officer if there is anything you can do to improve the terms you'd qualify for (meaning a lower rate).  The rates will likely be based on the credit score & down payment percentage (increments of 5%).  Paying off revolving debt would potentially improve scores, but would reduce the amount of money you could bring in at closing.  If you have enough of a down payment to get the lowest rates, and an increase in your credit score wouldn't lower the rates either, then I'd recommend you start paying off the highest interest rate debt first and go from there.

[Anonymous]

Thank you for your response and advice! I'm not too worried about locking in the interest rate -- I'm more concerned that since LO will be pulling our credit scores again in 6-8 months before closing that they will see that my credit score has gone down and will give me a hard time about it. 

[DollyLama]

To ease your mind, shoot for no credit card ever reporting over 28.9% of its' individual credit limit, both applicants, since the "middle mortgage" score they will use, will be the lesser of the two applicants. You are probably aware, but also no applying for any new credit until the closing and has been funded. 

However, I also as Shane stated, inquire if you were to increase your lowest middle mortgage score to say 760, will you indeed also get a better rate?