Unless you plan on purchasing your new home with all cash, you should obtain a loan pre-qualification prior to bidding at auction. LPS Auctions does not require that you use any particular lender. You are free to seek out and obtain the best rates and terms from any bank, credit union, mortgage broker, mortgage banker, private money lender or other source. Please bring a copy of your loan pre-qualification letter to the auction and have it with you as you register. Remember that the purchase contract that you will enter into will not have a financing contingency. As such, failure to obtain a loan may result in the loss of your earnest money deposit. Before you decide on a particular lender, make sure that they are prepared, willing and able to have the loan completed and funded within 30 days of the auction.

A few things to consider when speaking with your loan officer...

How much can I afford?

• Make sure that you have a clear understanding of exactly how much you can afford prior to bidding. Remember to add the buyer's premium to the bid price when calculating the highest price you can qualify to bid. For instance, if you intend to purchase a $150,000 sale price home, you want to keep your bid to no more than around $142,500 because the 5% buyer premium will be added to the bid price when calculating the sale price. Determine in advance how the loan will fit into your monthly budget and do not bid beyond what you are comfortable with.

Can everything be completed in 30 days or less?

• Make sure that your loan officer does not have an overwhelming backlog of work or other constraints that would make the 30 day closing unfeasible.
  
  

Does the loan product being discussed match the particular property you are interested in?

• Keep in mind that some of the properties in the auction may have 2 or more units, have no home at all (raw land), or may not qualify for a particular type of loan program due to location or some other consideration. Be clear and upfront with your loan officer with the exact property or properties you are looking at so that he/she can help you determine what loan programs will or will not work.

Are you going to be an owner-occupant or an investor?

• Programs to buy investment properties are still available and abundant in the marketplace, however, they generally require a larger down payment and have a higher interest rate than loans for owner-occupied properties.

Can I bid on more than 1 property?

• If you plan on bidding on more than one property, make sure that the lender allows you to purchase two properties at about the same time.

What documentation will I need?

• Lenders require a certain degree of paperwork such as paystubs, tax returns, verification of bank balances and so forth. With only 30 days between the auction and closing, it makes sense to gather all documentation prior to the auction so that the lender will have adequate time to submit and gain underwriting approval of all required items.

Your loan officer will be able to provide you with other advice and information to ensure that your closing is a success.