When a lender pre-approves you for a mortgage, they evaluate your creditworthiness based on your credit score, debt-to-income ratio, and other financial factors. If you pay off all of your debt after being pre-approved, it could impact your credit score, as paying off debt can cause a temporary dip in your credit score.
Furthermore, paying off your debt could also impact your debt-to-income ratio, which is a critical factor in the mortgage approval process. If your debt-to-income ratio changes significantly after being pre-approved, your lender may need to re-evaluate your application, which could lead to a delay or even a denial of the mortgage.
In general, it’s best to avoid making significant changes to your financial situation during the mortgage application process. If you have concerns about your debt or credit score, it’s advisable to discuss them with your lender before making any major financial moves.