Looking into the future, my situation may be somewhat unique and I hope I could get opinions on what to do.
I recently quit my job and started a 2 year associate’s program. I have plenty of money saved, and my credit score is nearing 800, however I accepted $4,500 in subsidized loans. Rather than paying out $, I would rather take the free money, pay all my bills and put the rest in the bank to accrue interest. I plan to accept another $4,500 next year, making the total $9,000 in student loans.
After I graduate, I plan to purcahse a home within 6-9 months so here’s the question: Should I pay back the loans in full, so my approved mortgage amount will be higher, or should I pay back the loan in increments, therefore possibly being better for my credit score?
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My thought process is that if I pay the $9k, I will have less for a downpayment, and may not have the 20% down. However, there are so many first time homebuyer programs that require 3 – 5% down that not having 20% down is a non issue. Let me know what you think and if you have any experience with this, thanks!