<prompt> Human: My fiancées parents were kind enough to allow us to live in their basement after the wedding to save money. We initially thought it would be the perfect opportunity for us to save for a down payment on a house. Now Im starting to think it may be better for us to put a dent in my federal loans. Here are the details:Her salary: 73000My salary: 102000 10,572.19 5.59 4,754.33 6.59 12,560.20 7.125 34,521.18 7.125 22,215.47 6.55Current Principal Balance: 84,623.37 Interest: 203.48Total Current Balance: 84,826.85There are no other loans or debt between us. We plan to live there for 10 months and save 4k every month. In addition to the 40k, my company offers 12k to first time homebuyers. My fiancée and her parents also have 20k set aside for us to use towards buying a home giving us a grand total of 72k with 62k going towards the down payment and closing costs and 10k towards our emergency fund.We live in an above average COL area where 1800sq. ft. townhouses range from 475000 to 575000 for 3bd, 3br. Q: In the long term, should we be using the 40k to pay almost half of my federal loans and just pay a smaller down payment on a house OR is it better to pay a larger down payment to lower the mortgage payments and make minimum payments on the loans?  <response>: Pay off the debt before buying a house. If you find youre wearing out your welcome at the in-laws place, find a place to rent until the debt is cleared. Then save a full 3 to 6 month emergency fund and a down payment on the house. 