Property Auction Finance
Having concerns about financing property bought at auction is natural, and it is one of the main reasons why people stay away. Aside from worries about arranging property auction finance there are a number of other reasons people are put off attending auctions. These are:
- Fear of making a mistake and loosing money
- Uncertainty about how the system works
- Doubts about whether all the good properties have been taken.
You can over come your concerns by researching the property auction process, browsing through auction catalogues and attending a few practice auctions to put your mind at rest. Arranging property auction finance for a property purchase is quite straight forward, and really there are only three important things to be aware of:
- Most property auction houses will require you to pay a 10% deposit on the day
- You will be bound by contract to complete within 28 days (or sometimes less)
- The winning bid is a binding contract.
So having your property auction finance arranged prior to the auction
is a major advantage and can save you time and money. The property auction
finance we arrange is
usually based on the market value of the property and not the
purchase price, meaning that if you "snap up" a bargain then 100%
funding is possible. Remember that you must be able to pay the
10% deposit on the day of the auction, and that you are committing
yourself to completing the purchase within a set timeframe.
Property auction finance can be arranged for residential, semi-commercial and commercial properties. The condition of the property being purchased at auction and your intended use of it will dictate the type of auction finance you need, for example:
- Refurbishment Finance is used when the property is not habitable and needs more than just cosmetic improvements or if you intend to change the layout of the property.
- Buy to Let Mortgages for property bought at auction can sometimes be arranged within the timeframe, but it is advisable to have a back-up plan in case of last minute hitches.
- Bridging Finance is the usual way to complete an auction purchase and using an auction property bridging loan is far less expensive than it used to be.
How to Finance a Property Auction Purchase.
Property auction finance involves arranging auction mortgages within the time constraints laid down by the auction house. Normally you will be required to pay a 10% deposit on the day of the auction, and complete the purchase within 28 days. We are able to help you with funding for residential and commercial property including properties in need of refurbishment.
After discussing your plans with you we will agree a course of action ensuring that the right auction funding is put in place along with the most appropriate long term solution. As part of that process a professionally prepared valuation report is required. We can arrange this on your behalf and liaise with your legal advisers enabling a speedy completion.
At Spectrum Business Finance we are able to work with a large selection of property lenders who understand auction finance and are able to approve applications quickly. Arranging property auction finance need not be a stressful process.
