Will we get pre-approved for a home mortgage?

My husband and I have a combined income of 40,000. He works part-time and is in grad school and I work full-time. We want to purchase a home in Hampton Roads Virginia for no more than 170,000. Our debts a month is one 370 car payment and 421 for my consolidated student loans. His car is payed off already. My... show more My husband and I have a combined income of 40,000. He works part-time and is in grad school and I work full-time. We want to purchase a home in Hampton Roads Virginia for no more than 170,000. Our debts a month is one 370 car payment and 421 for my consolidated student loans. His car is payed off already. My question is how hard would it be for us to get pre-approved. Our credit cards will have $1000 combined once we go for approval in December. The one thing I am concerned is I have undergrad student loans in my name but my parents are paying off my undergrad loans. How will this affect pre-approval and is there something i could do to show the lender that the loans are being paid for by my parents. I'm worried about the debt-to-income ratio aspect of pre-approval. We also will have $7000 in savings by December when we go for pre-approval.
Update: Both our credit scores are in the 700s.
Update 2: Also, we are using a VA loan. Husband is in the Reserves, we already have certificate of eligibility
Update 3: Thanks for all your advice. I wanted to clarify that I wasn't particularly going for 170,000 I wanted to stay in the 140s or 150s but was told that you try to get approve for a higher amount that what you really want to buy.
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