Hi Ryan Her
For FHA, you credit score is fine. Unlike Conventional, it will also afford you the best current rate without having to pay any discount pts. Concerning paying off debt, if not to increase your score, the only other reason to pay off (not down but off) debt is to increase the loan amount you can qualify for. What is the price range your looking to get approved for? What is your current monthly income gross? Do you have more than 2 years on the job? Are you looking to include overtime or bonus? If so, you'll need to receipt of both over the past 2 years as well. All these are common and key questions a loan officer will ask you in the qualifying process.
With regards to your DTI, FHA requires that it does not exceed 43% w/o strong compensating factors. For Conventional its now 45%.
With regards to your installment loan, you are correct, paying it down won't decrease your number of remaining payments.
Finally, its always more advantageous to show and keep as much cash reserves as possible. I'm a local lender, and if I can be of any further assistance in getting you approved, you may contact me at your earliest convenience.
Rudy R. McDowell / Senior Loan Officer
770 S Adams Birmingham, MI. 48009
o: 800-678-6663 Ext 5154 / f:248-594-6156 /d: 313-410-1344
"Referrals are the Best Indicators of My Service and Your Satisfaction"