Auction Finance
Bought a property at auction? Completion date looming? Don't want to lose your deposit?
Free bridging loan quotes for commercial or residential properties bought at auction available here!
Only bridging loans can meet tight auction deadlines!
Buying from auctions is predominantly the domain of the private "buy-to-let" investor and property developers. One crucial aspect of this purchasing method is being able to access finance very quickly. In most cases having successfully bid for a property an immediate deposit of 10% is required on the day of purchase. Then the purchase must complete within 28 working days to avoid losing the deposit. Depending on the vendor the completion could be required in as little as 14 days. This is where a high-speed bridging loan can be needed.
Tight completion deadlines mean that even where long term finance has been pre-agreed, timescales may not be met. It is also possible to have pre-arranged bridging finance in place, subject to the usual property valuations, making the whole process even faster! A short term loan lender will also lend against the full "open market valuation" of the property and not just the purchase price.
Lenders who can bridge a property purchase can complete in as little as 48 hours, sometimes even quicker where all information is immediately available.
If you have a deal that may miss your dead-line then why not try our Bridging Loan Service!
Top Tips for Buying at Auction
- Fully research your target property or properties before the auction.
- Work out how much it will cost to refurbish / convert / build and how much the property will be worth once complete.
- From your research work out how much you can bid to make purchasing worthwhile.
- If you intend to sell post works, have a back-up exit strategy just in case. This means finding out the likely rent available and whether a mortgage based upon that rent can take out the short term finance.
- Don't forget to insure the property, remember it's your responsibility as soon as the hammer falls!
Pre Approved Auction Finance
Some investors / developers like the comfort of having a pre-approved bridging finance facility. We are happy to arrange this type of finance. However it should be noted that these facilities work by offering finance against properties already owned and not the target property. Any property subsequently purchased at auction can then form part of the security.