All, My new wife and I are looking to buy our first home sometime soon and we could use some advice on how to proceed. We've already taken a first time home-buyers class, so we're familiar with the terms and we know generally how the banks will determine how much you can afford. We plan on ordering credit reports on ourselves before getting pre-approved so that there are no surprises. We don't have much saved for a downpayment, and the recent wedding has left us with some debts that we would like to eliminate. However, I'm going to have a somewhat substantial holiday bonus coming my way soon, and this has brought up a bit of a dilemma. There seem to be two ways that we can go about things: 1. Use any holiday bonus money to pay down debts and then begin saving for a downpayment. Pros: This would presumably allow us to qualify for a larger loan since we'd have less monthly bills/debt. It's going to be winter soon, and we're under the impression that there's not going to be much out there to buy before spring. Cons: Increases the time it takes to buy a house, possibly by a significant period of time depending on how fast we're able to save for a downpayment. We run the risk of interest rates going back up, but I'm thinking they're going to stay low for the foreseeable future (hopefully until at least next summer). We'd be paying rent (throwing away money) for a longer period of time. -or- 2. Pay down what we can, but use the holiday bonus and whatever we manage to save ourselves as a downpayment. Pros: Get us into a house sooner. Allows us to be able to maybe buy something over the winter, when prices are (hopefully) lower due to it being the slow season. Takes advantage of current low interest rates. Cons: Might not qualify for a large enough loan for the size house we want because of debt. Move into a house with a higher than anticipated debt load and not be able to do as much as we'd wanted to upon moving in. (not a huge deal, but paint, carpet, etc. can get expensive quick) So, any "experts" (or seasoned amateurs!) out there care to offer advice? If I've left anything out, let me know and I can post more detail. Thanks, -Brett.