Banks will not consider an offer without a pre approval and a proof of funds for your down payment. Often the bank who is approving the short sale will require you to get a pre approved with them so they know you are credit worthy.
it won't change your score, not right away anyway.
Consult your mortgage loan officer on how to improve your score - dispute erroneous info on each of the credit agencies reports, and do it within 5-6 monthly cycles. Keep your balance to limit ratio below 30% on all cards, possibly add your name to someone else's (family) cards to improve your score.
Some short sale lenders ask for the pre-approval, and some do not.
Some would want to see your Desktop Underwriter print out (DU).
Highly unlikely that you'll be able to get through DU right now - you got to be higher than 620 points.
It is also the job of the listing agent to check if you really qualify.
This is because the success of the whole deal is based on your ability to timely get a mortgage.
Often, short sale approval give too little time to go through financing - that means you truly have to do everything quickly (paperwork) and push the file through the underwriting quickly.
I'd suggest to first fix the credit issue, truly prepare for financing, and only then get involved in the purchase transaction. If you start now - it will be a risk for you and the seller both. Your risk is that you'll be doing an inspection (paying for it), appraisal (paying for it) etc. Seller's risk is that you may not get financing at all - and he won't sell the property.
Hope this helps,
Beachfront Realty, Inc.
A seller would be poorly advised to take their home off the market in hopes that the purchaser can obtain a preapproval letter. More to the point, why would a purchaser run the risk of losing a home to another purchaser who came prepared?
Is the 560 a mortgage credit score or a consumer credit score?
Your best option is to contact several lenders and discuss your financial situation. A good lender will advise you as to what you need to do to raise your credit score.
The interest rates are great right now, but due to your low credit score most/all lenders will charge you higher interest rate. This is why it is in YOUR best interest to raise your credit score to at least 650.
You can qualify for FHA loan with 3.5% downpayment (0% down for VA loan, if you qualify). Perhaps paying off your other debt and taking FHA loan is a better financial decision. Also, there are lenders who might approve you for a conventional loan with 10% down IF your credit is closer to 700.
Coldwell Banker Residential Brokerage
Lee Newcomb, Realtor
Long and Foster Real Estate
Envision Real Estate, LC
If I can assist you in any way, please let me know as I have a lot of experience with short sales & distressed properties.