Getting pre-qualified before looking for a home has always been a good idea. With competition and short supply now, it’s imperative.

Sellers often receive multiple offers and those who are not pre-qualified are probably not going to be considered. It’s difficult enough to buy a home, without that letter telling the buyer that you can actually go to closing, they may not accept your offer. The other sad truth is that there are so many people refinancing their homes along with buyers buying, the credit system is overworked.

There is a shortage of experienced loan processors, escrow officers, title company processors, etc. There are simply too many requests for loans and two few people processing them. No buyer wants to go down the road to closing without knowing that the buyer will be able to complete the process.

Even when people get pre-qualified, some do not make it through the process. During the way which used to be about 30 days, people will fall by the wayside. Lots of issues that buyers forgot about in the past or they just bought a new car after they started the process etc. Some sellers need to close fast or at least in a reasonable time. If the deal falls through they have to start over. If you are a seller and want to move, you need to coordinate the sale and closing of your home with the purchase of another.

The pre-qualification letter is just that, “pre” before they start tearing into your lives. If you have unpaid bills, people chasing you for money, credit cards are charged to the max. This will all come out in the process and may throw you out. That initial credit report and credit score just let you in the door.

Before you start to look, make sure your credit is in good shape. Lots of people can buy a home with credit scores in the low 600’s but it’s not smart to buy a home with a score of less than 720 if you can repair your score before applying. Why? The interest rate can be drastically different between the low 600’s and 720 and above. This means a higher monthly payment for the life of the loan.

You can contact a loan broker at any time before you start looking for a home and work with that loan broker to help improve your score. There may be some good reasons why it is low and they may be able to help you do what is necessary to get it up. When your score is high enough to apply for a loan then start looking. Your pre-qualification letter will put you in the running with everyone else except perhaps for cash buyers.

Thank you for reading our blog article. If you would like to understand more about credit read other articles on this site or try RetireCoast.Com for more information. Contact us when you are ready to consider buying a home.

Logan-Anderson, Gulf Coastal Realtors 228-215-0031. Select 1 for Sean or 2 for Bill.